BC Offshore oil

A seafarer’s perspective

Authored by: Martin Leduc

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I was fortunate to participate in the Vancouver Island Branch of the Canadian Institute of Marine Engineering’s Developing BC Offshore Oil and Gas, which took place in Victoria in early June 2002. The conference was well attended by more than 170 people. Coastal communities mayors, government officials, equipment suppliers, technology suppliers, seagoing engineers, scientist, students and so on. All these people in one room highlight the wide reaching impact of oil and gas exploration and production on British Columbia’s coast. A the heart of this gathering, really the first of it’s kind for the west coast, was experienced professionals from Canada’s east coast. The honorary chairman of the conference was the Honourable Mr. Brian Peckford. As former premier of Newfoundland he was instrumental in that province’s development of offshore oil and gas. Mr. Peckford brought with him much experience and insight which he willingly shared with the delegates, many who where there to get a feel for the situation and where are we along this “path”.

I am disappointed to say, but we are far from production. I don’t think we will see significant impact to the British Columbia marine industry for another seven to ten years. Not to say that there is no movement, we must keep in mind that several years ago, coastal exploration was a taboo subject in British Columbia. The Hon. Mr. Neulfeld, British Columbia’s Minister responsible for Energy, Mines and Resources, gave a brief speech about the provincial government’s progress. It was not impressive and illustrated the current government’s apprehensive approach. Patrick O’Rourke, responsible for BC’s offshore “file”, further explained the government’s plan during his presentation. The apparent big part of that plan, is to give the University of Northern British Columbia in Prince George, a 2 million dollar grant to be use for further research. One can assume this grant is to quiet critic that say the provincial government is not doing anything, but really not committing themselves to a drastic change in policy. Understandable, considering the problems they are faced with, such as the recently impose duties on Canadian lumber products and its affect on forestry dependant cities like Prince George. Do we really need another study on how offshore oil and gas will affect us? It is this author’s opinion, that “too cautious” of an attitude will lead nowhere except waste money.

The Canadian Institute of Marine Engineering has taken the first step in helping people to do their own research. I for one, did learn about different aspects of oil, gas, BC, and how it will affect sea going professionals. One of those lessons learned, was the differences between BC and Newfoundland. Before the conference, I felt a general sentiment that we can simply take the “blueprints” for development from Newfoundland an apply it here, therefore “easy to do”. Not so, it is not going to be “easy”, and BC’s journey into offshore oil & gas development will require a great deal of vision and investment on our part. Some of the differences are: our geography & environment, experience, native claims and one of the most glaring difference – the people of Newfoundland’s support of the idea.

The first difference is the environment and geography. They are technical challenges which have been met elsewhere in the world and can be adapted for this coast, although different, overall not really a problem. Secondly, in British Columbia, the Peace River region in north eastern part of the province, is a very active area for natural gas exploration, production and transmission. This experience is far more than Newfoundland had when they first consider exploring offshore and we can draw from our knowledge in the Peace River region. Thirdly, the Queen Charlotte Haida’s claim to sub-sea rights in Hecate Strait, and most likely the similar action from other native bands. This difference is a major stumbling block and must be satisfied before we can truly invite exploration. The usual British Columbia, “me first” attitude should give way to a co-operative and mutually respecting attitude, with risks and rewards divided equally. The most important difference between BC and the Maritimes is Newfoundlanders’ support for offshore development, they wanted offshore development. It is this author’s opinion that the majority of British Columbians are not sure what to do, and therefore have succumb to fear mongering by people who oppose development.

So who are these “scary” oil companies, and why have they been so “quiet”? The answer is another lesson I learned. From what I gather, the large corporate, unnamed  behemoth is no longer what it use to be. They are world wide and have a great deal of experience in negotiating with all sort of people from many different cultures. They do business where they have the best chance of return for their investor’s money. One can therefore deduce the answer to be; that the oil companies recognise that British Columbians are not ready for development and therefore a risky investment. The work of a modern oil company is the organisation, marketing and financing of a project, rather than the whole spectrum, which use to include survey and development - the technical aspect. From the information offered at the conference, it appears that oil companies have divested the technical aspect of development to many consultants and experts. These people, specialist in their fields, do not necessarily work for one said company, but offer their specific services to many different oil companies. With the best professionals doing one specific task, the investor – oil company, has some security. At 50 million US dollars per well and 1 of 10 exploratory well not being fruitful, it is not too hard to see why someone would want security.

As Canadian marine engineers and seafarers in general, how is the exploration and production of BC offshore oil and gas going to affect us? The most noticeable impact will be the exploration and development, which will be very similar to Newfoundland’s five year boom – bust cycle. A five year period which, at it’s peak, will tax the local engineering, construction, supplies, and transportation resources while the project gets underway.  Professional Canadian seafarers will most likely not be affected until the projects moves into a production stance. A “snap shot” of one project could have a timeline similar to the one below. We could see 2-4 project being developed.

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2002 – 2008 Regulatory framework set up – opening the door for business. bullet

2008 – 2010 Seismic survey. Specialised task, one, maybe two, vessels; foreign owned and crewed. bullet

2010 - 2015 Exploratory drilling / development. Two drill rigs, most likely foreign contracted, foreign crew. Support vessel: 1 AHST per rig, plus 1 supply/crew boat for both rigs – these could be Canadian owned, operated and crewed.  bullet

2012 - 2032 Production. Two production rigs. Support vessel: 1 AHST per rig, plus 1 supply/crew boat for both rigs – these could be all Canadian owned, operated and crewed. Transmission by tanker which could be Canadian owned, operated and crewed. The other option is laying a pipeline, which can be a Canadian venture. The laying of the line would  be most likely foreign but the maintenance could be Canadian content.   bullet

2032 – 2035 Decommissioning of the equipment and fields.

Although not easily quantifiable, one can expect the additional demand from the tow boat industry, Coast Guard and transportation activities on the seafaring community. This would present this coast with a great opportunity to join the Atlantic in reaffirming some of  Canada’s seafaring notions.

There is allot of work to be done, but British Columbia and Canada already has the resources and experience. We can develop gas and oil off the west coast but let’s not rush into easy answer and empty promises. If we really want it, we need to educate ourselves about what is at stake, then make sounds decisions based on facts. We need a champion(s) to lead us, and they must rally the people. Provincial and Federal governments need to be aware of this support and create a body of authority to handle the development and all things concerned. The government  needs to set fair, realistic goals for the authority to reach, and it must include the first nation people from the start. Judging by the amount of enthusiasm displayed at the Developing BC Offshore Oil & Gas conference at such an early stage, it feels very promising, just not in the very near future.

Martin Leduc, July 2002
Visit the Pacific Offshore Energy Group's website for further info.