The B.C. Liberal government received a stern warning on offshore oil and gas development this week. Gwyn Morgan, Chief Executive Officer of ENCANA, one Canada’s largest oil and gas companies, stated that B.C. offshore oil and gas development was a “low priority” for his company. Morgan explained that offshore development is expensive and that the industry does not want to “push something that people don’t want.”
The reluctance of industry to pursue offshore oil and gas development is understandable. Offshore oil and gas is costly to develop compared to conventional reserves and risky from an environmental perspective. Image conscious companies do not aspire to bad publicity from oil spills and broad public opposition.
Unfortunately, the B.C. government is not so astute. The Premier has placed much of his credibility on the line by promising to develop offshore oil and gas in time for the 2010 Olympics. This promise is both impossible and foolish.
As most experts in the oil and gas industry recognize, the development of B.C.’s offshore oil and gas industry will take at least 15 years even if everything goes right. And by trying to fast-track development, the Premier will likely make sure everything goes wrong.
Two scientific panels, one by the federal government and one by the B.C. government outline the risks in offshore oil and gas development. Both studies identify significant gaps in knowledge that must be filled before development can proceed. And both studies conclude that negative impacts on the environment are inevitable. The provincial study, for example, warns that large-scale impacts may occur and “may be catastrophic in the short term and cause serious and possibly irreversible consequences in the long term.”
The study also warned that the regulatory system to manage oil and gas is deficient and the jurisdictional responsibilities confused. It recommends that all these issues including an agreement with First Nations, need to be resolved before proceeding with development.
Government advocates for offshore oil and gas development counter that the environmental impacts can be managed with new technology. They also maintain that they are working to fill knowledge gaps, negotiate agreements with First Nations and the federal government and improve the regulatory system. And they say that even if there are risks, the risks are more than compensated for by the economic benefits of offshore oil and gas development.
Those politicians who maintain that oil and gas development is without significant environmental risks should look at the U.S. National Research Council reports commissioned by former President Bush, which concluded that there were serious risks and uncertainty over impacts of offshore development. The risks are so severe that the President imposed a moratorium on all offshore oil and gas development on the east and west coast of the U.S. to 2011. The current President Bush has maintained the moratorium, in spite of his reputation as a friend of the oil and gas industry.
The Premier should also look at the recent U.S. government environmental report on offshore oil and gas development in the Alaska Cook Inlet which concluded that proposed developments similar to those contemplated for B.C. will result in 483 oil spills over the next several decades and a one in five chance of a major oil spill.
The Alaska report also shows that the proposed large scale offshore project will generate fewer than 200 permanent jobs. Offshore oil and gas development generates very few jobs and the jobs it does generate tend to be taken by outsiders who move into the region.
The attempts by B.C. Liberals to address the deficiencies in the regulatory system and forge agreements with First Nations are equally suspect. B.C. just weakened the regulatory system by gutting key provisions of the Environmental Assessment Act. There is not even any statutory requirement to undertake an environmental assessment before proceeding with oil and gas development. And the public consultation process is so deficient that First Nations have decided to boycott the process.
The government’s overall economic strategy is in tatters. Tax cuts have done little to stimulate our ailing economy. Desperate for some evidence of economic revival, the Premier is now relying on fantasies about economic mega-projects without proper planning or proper assessment.
The results are damaging for B.C. The projects are unlikely to ever go ahead and if they do, the hasty and chaotic planning will impose huge costs on us all.
The Premier and his government have a reputation for arrogance. They do not listen and they do not consult. As even the business community warns, investment in offshore oil and gas will not occur without the support of the local population.
If the Premier is interested in economic development he should start serious consultations with all British Columbians on how best to revive our economy. Ramming through unpopular and potentially damaging projects, such as offshore oil and gas, represents a plan doomed to failure.