The University of Victoria Martlet, 6 Dec '01

B.C.'s off shore oil drilling: employment, environmental disaster or an illusive dream

From his desk in Prince Rupert on B.C.'s north coast, David McGuigan sees his city at the heart of an oil boom. There are new refineries, natural gas plants, chemical factories and a petroleum storage and shipping terminal where tankers ply the waters of North America's deepest port. Economic troubles are over because, like Newfoundland which is now making money off Hibernia, the local economy finally has something to rely on other than logs and fish.

But McGuigan is looking ten years into the future, and so far his vision is only a dream.

He heads the North Coast Oil and Gas Task Force, a group of Prince Rupert business people who have been pushing the provincial government since 1997 to reconsider its moratorium on offshore oil and gas.

"The population is down 20 per cent, fishing industry has been cut by 50 per cent," he said. "I’d like to see oil and gas development. I’d like to see people on the north coast employed."

Today, with fishing in decline and seasonal at the best of times, and the pulp mill, which was the city’s largest employer, shut down, the economic situation on the north coast looks as bleak as Prince Rupert’s rainy skies. And McGuigan isn’t the only one dreaming of oil.

Prince Rupert’s mayor, Don Scott, is ready to take some risks to revitalize the economy.

"Everybody’s interested in prosperity for their family and prosperity for the future," he said. "When you’ve got an opportunity staring you in the face, you should seize it. Why would you not? A boat is safe in the harbour but that’s not what it was built for. There’s a huge potential for revenue, job creation, and economic development."

Optimism is in the air. But oil won’t be flowing anytime soon. First, there has to be consensus on the coast. People like McGuigan and Scott have to find common ground with environmentalists, commercial fishers, and First Nations – those who are the least likely to benefit from offshore oil, but who would be the first to pay the price if oil spilled on the coast.

If there’s one thing that both sides can agree on now, besides the need to keep talking, it’s the need for strong local control over any resource development. Inviting big oil into B.C.’s front yard is a roll of the dice, and before opening the doors to global corporations like Chevron, which owns most of the coast’s oil and gas leases, people on the coast have to make sure that the local economy will benefit.

But if locals can wrest control over their resources away from industry, they may already have found the answer to their problems.

The coast of B.C. has been off-limits to oil companies for most of the past 50 years. The provincial and federal governments each have a moratorium that prevents exploration and development.

In 1984 the oil companies, local stakeholders and both governments came together and talked seriously about offshore oil and gas. Talks went on for two years and negotiations started on a "Pacific Accord" – a regulatory framework for oil development. But in 1989 when the Exxon Valdez tanker spilled 40 million litres of crude oil into Prince William Sound, Alaska, governments closed the book on oil exploration and left the moratoria in place.

Maybe someday, it was thought, better technology would make offshore oil environmentally safe for B.C.

Oil proponents believe that day has arrived. When the Liberal government came into power this year, they promised to "explore the enormous opportunities of offshore oil and gas," and gave people like David McGuigan cause for hope.

But this optimism may be unfounded.

Nobody knows if there really is oil offshore of B.C. The area in question is the Queen Charlotte Basin, north of Vancouver Island, between the Queen Charlotte Islands and the mainland. This area might contain 2.5 billion barrels of recoverable oil –the equivalent of four Hibernias – in addition to enormous amounts of natural gas. Or it might not. Until the drill strikes, oil is nothing but a dream.

And even if exploration went ahead and oil were found, there’s no guarantee that it would bring riches to the north coast. The last report prepared for the B.C. government concluded that "major benefits from offshore development tend to flow out of the province."

North coast locals want some guaranteed benefits before they agree to oil development. But the rules of international business might make this impossible. Locals will have to match the skills of non-resident labourers and local businesses will have to undercut foreign competitors for any contracts from oil.

On the east coast, oil contributes hundreds of millions of dollars to provincial economies, but it’s been hard to keep jobs local. Hibernia now employs only 700 people. Even industry admits that offshore oil is not a big employer after the initial construction phase.

According to Dale Marshall, resource policy analyst with the Canadian Centre for Policy Alternatives, the platforms themselves would not be built in B.C. but rather China or Korea.

"They’re going to build it somewhere else and bring it into B.C."

Marshall said that in addition to making it impossible to reinstate the moratoria on offshore development once they are lifted, the North American Free Trade Agreement (NAFTA) may make it more difficult to ensure that locals benefit.

David Luff, an oil industry spokesperson with the Canadian Association of Petroleum Producers, said that the first concern of the big oil companies is their return on investment. B.C. would be competing for the attention of global corporations that have a world of options.

"The companies who have the capability to develop in offshore B.C. will be evaluating those basins relative to all the other basins around the world within which they operate," said Luff.

The western province might have to bargain hard if it wants to develop offshore oil at all. Because there are so many unknowns, everything possible has to be done beforehand to make sure that risks will be minimized and local people benefit if oil exploration goes ahead. If the moratorium is lifted without a careful consultation process, said Marshall, "you’ve taken your last card and given it to the oil and gas companies."

Oil companies don’t claim to be in any rush to take that card.

Lynn Lehr, Chevron spokesperson, said that the company is waiting until B.C. settles First Nations land claims and develops a Pacific Accord. She estimates at least five to 10 years before oil exploration can begin.

"We own the rights, they’re not going anywhere. We don’t want to come into an area that has unresolved issues," Lehr said. "That’s a no-win situation for everybody."

While the oil companies take a wait-and-see approach to B.C. offshore, environmentalists hope to keep them waiting forever. For them, the issue extends far beyond the north coast. They say part of Canada’s commitment to preventing global warming should be to stop producing more oil.

"Somebody somewhere has to take global warming seriously and curtail the use of fossil fuels," said Paul George of the Western Canada Wilderness Committee. "We have to start developing wind, tidal and renewable energy sources."

Oonagh O’Connor of the Living Oceans Society, based on Malcolm Island near the proposed oil development, said B.C. should be looking at alternatives anyway, because it will take up to 20 years to see any benefit from oil and gas.

"We need to be looking at solutions that can be worked on right now that are based on sustainable industries," she said.
O’Connor is also worried about the local environment, starting at the first stage of exploration.

"Our concerns begin with the impact seismic testing has on fisheries, the impact it has on marine life and the impact it has on marine mammals," O’Connor said.

Seismic testing uses shock waves to survey the geology of the sea floor, determining the best places to drill for oil. These waves may disturb fish and whales.

With drilling comes some inevitable oil spillage. Marine life will be harmed if it’s exposed to too much oil, but the exact risks are unknown. Walter Cretney, a scientist with Fisheries and Oceans Canada, says that the environment can recover from a big oil spill. It’s just a matter of how long we’re willing to wait.

"In the grand scheme of things these are somewhat short events," he said. "Ultimately these things will self correct but one has to decide what the risks are and whether its acceptable to wait 10 or 15 years. Somewhere along the line someone has to make a value judgment."

An oil spill that wiped out marine life for a decade would be a disaster for commercial harvesters.

Joy Thorkelson, northern representative of the Union of Fishermen and Allied Workers (UFAW) speaks for salmon fishers in Prince Rupert. She says that commercial fishers have very little to gain and everything to lose from oil development.

"Our union’s stand is that the moratorium should not be lifted," she said. "There are always spills. Fish and oil just don’t mix."

Thorkelson said that if past history is any indication, lots of tax dollars will be spent on offshore oil. The Canadian government spent $3.6 billion on Hibernia. Thorkelson believes that on the west coast, government money would be better spent on alternatives. Buying a crane for the port in Prince Rupert would allow it to take container ships, Thorekelson said. The port is on the shortest route between the American Midwest and Asia. If beef shipments came through Prince Rupert, they could afford to operate a cold storage facility all year. Instead of being shipped out by September, some fish could be kept around for local processing year-round.

Prefabricated post-and-beam home building is another value-added industry that could be started with a bit of capital and local control. Big companies won’t sell small numbers of logs to locals at a reasonable price, Thorkelson said.

"Houses are imported from back east because our people don’t have access to the lumber. People here want community forests," she said.

Commercial fishing in B.C. only brings in 200 million dollars a year. Offshore oil and gas could be worth ten times that, making it the second largest contributor to the B.C. economy after tourism. There would be more government money to fund northern initiatives even if local jobs weren’t created directly.

But Thorkelson doesn’t think it’s worth the risk. She’s worried that the government has already decided to develop oil.

"Because of their political policies they’re going to put our coasts at risk," Thorkelson said.

People on the coast say the two-year public review process back in the 1980s was a good one. This time, however, the provincial government has opted for a fast-track review that will allow it to make a decision about offshore oil by Jan. 31.

After receiving a report on the issue from a private consulting firm in October, minister of energy and mines Richard Neufeld sent five northern MLAs out to gather public input from coastal communities. Also, he charged a three-personscientific panel with the task of advising government. He gave both groups a deadline of Jan. 15.

The scientific panel is chaired by the former president of UVic, David Strong, who is a professor in the School of Earth and Ocean Sciences. Strong said the panel will tell government whether there is enough information to make a decision.

"We really don’t have anything together yet," he said. "We expect it to come together in early January. We’re trying hard to really hustle. We’re not really doing science. We’re just having a look at what’s available, what’s understood, what’s known. Even if they did lift the moratorium, the real understanding of the B.C. offshore would have to come afterwards with lots of site specific research."

On Jan. 31 the provincial government may shelve offshore oil and gas for another decade. The alternative will be more research, more consultation.

The importance of more consultation is nowhere more evident than in First Nations communities. Carole Perrault, general manager of the Musgamagw Tsawataineuk Tribal Council in Alert Bay, is just beginning to think about the implications of oil.

"We’ve got no information at all about impacts on us," she said. "And
that’s kind of scary."

When the five MLAs arrived in Bella Bella on Nov. 29 to speak with leaders of the Heiltsuk Nation about offshore oil and gas, Philip Hogan told them the Heiltsuk aren’t interested.

"This is the first time we’ve talked to them," said Hogan. "They’ve never come here before. We’re not in favour of this but if they are intending to pursue this they need to come here and talk to us on a more meaningful basis. Two hours in the hall for something that’s going to effect our very existence. That’s not adequate. I think that they recognize that."

Hogan said First Nations aren’t in a rush to jump on the oil bandwagon, even though they have economic problems of their own. When money is scarce, he said, the Heiltsuk look to the ocean for food, not oil. Plus, they just invested millions of dollars into a new fish plant, so they aren’t going to support any development that might harm fish.

"Given the stakes we’re quite concerned," he said. "We’re not in favour of lifting the moratorium at this time. There really isn’t a need for it. There’s plenty of oil in the world right now."

Guujaaw, President of the Haida Nation, isn’t saying no to offshore oil. "[But] there’s a lot of issues to be resolved. First of all there’s the environmental issues. Secondly there’s the jurisdictional issues."

His vision is dramatically different from McGuigan’s. "Our whole culture is our relationship to the land and we’re not going to sell that out for jobs and revenue," he said. "Our culture is about digging clams and catching fish and being out on the water. Right now we could eat as good as any rich people without being rich. Money in itself doesn’t answer all the troubles. There’ll be more troubles. They’ve spent 50 years trying to turn us into shoppers already."

Chasing after big money, inviting in globalization and industry, is the root of the existing economic problems, according to Guujaaw.

"Why is there an economic problem? It’s because they mismanaged the timber, they mismananged the fish, they basically took everything from the small communities and put it in the hands of big money. That’s the problem."

The most that could happen after January is a the beginning of negotiations on a Pacific Accord. Until that’s complete, it won’t even be known which government owns the oil in the Queen Charlotte Basin. Negotiations will be the most important part of the process – an opportunity for the people of B.C. to set their terms before they open the door to multinational oil corporations, international trade rules, and the vagaries of the marketplace. But if locals can get control of their renewable resources – fish and logs – they may not need oil at all.

McGuigan says Prince Rupert has to join the new global economy, whether people like it or not. But from his home in Skidegate, Guujaaw is suspicious of the industrial vision of the coast.

"We live off the land…. [McGuigan] has probably never dug clams in his life," Guujaaw said.

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