 Pumping crude oil at a test site in northern BC, 1983. Ralph Bower/Vancouver Sun
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During the past two years, the oil and natural gas industry has emerged as the provincial government's largest source of royalty revenues from the natural resource sector. In 2000, royalty revenues from the industry totalled $1.3 billion, surpassing forestry revenues for the first time in BC's history.
The oil and gas boom is centred in the Peace River district, the province's traditional production centre, and is being fuelled primarily by the development of new natural gas fields. In 2000, BC wells produced 940 billion cubic ft of natural gas, 55% of which was exported to the US, making BC the second largest producer of gas in Canada after Alberta. Leading the way in this surge was the Ladyfern discovery, a huge natural gas field about 100 km northeast of Fort St John near the Alberta border. Ladyfern has turned out to be the biggest Canadian gas discovery in 15 years; it is estimated to contain between 500 billion and a trillion cubic ft of gas.
As well as extracting gas from traditional sources, BC also promises to become a future source of coal-bed methane. Similar to natural gas, coal-bed methane is produced from underground coal formations. Exploration and development has been going on at sites in the Elk River Valley in southeastern BC and also on Vancouver Island, where 4 wells near Courtenay are going to start producing coal-bed methane this summer.
Offshore Development
A more controversial source of oil and gas are the reserves lying beneath the sea floor off the coast between the north end of Vancouver Island and Prince Rupert. The Geological Survey of Canada has estimated these untapped reserves at a possible 9.8 billion barrels of oil and 734 million cubic m of natural gas. Since 1972 there has been a moratorium on the development of the offshore resource because of environmental concerns. But the Liberal government of Premier Gordon Campbell has served notice that it intends to lift the moratorium. The government established a Scientific Review Panel, which has concluded that there is no scientific reason why offshore development should not go forward.
Offshore development would be expected to bring great economic benefits to the province, and to northern coastal communities in particular, in terms of jobs and eventually oil and gas revenues. Opposition to offshore development comes mainly from environmentalists and from First Nations groups, who argue that seismic testing will harm fish and marine mammals, and who point out the high risk of oil spills and earthquake-induced accidents. The debate is in its early stages, since development of the resource will require a resolution of aboriginal land claims and a great deal more scientific study. It is by no means clear that in the end oil companies will even find it economical to begin production.
Harbour Publishing Co. Ltd and Harbour Interactive Inc. All rights reserved. © 2002.
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