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Posted November 29, 2006
Backers of offshore development take wait and see view
Vancouver Sun, November 28, 2006
by Don Cayo
Oil and gas were discovered off Newfoundland in the 1960s, but it was well into the 1990s before anybody started pumping it to the surface.
In the decades between, periodic bursts of optimism used to spout from premier after premier, often at election time. The hype always came to naught. The "industry" came to be regarded as a joke, as was the credibility of those who still believed.
The believers were ultimately right, of course, even if their time-tables weren't.
But why did it take so long? I asked Newfoundland Premier Danny Williams, who came to Vancouver on Monday to sing paeans to what the industry has done for his province.
Williams didn't cite market conditions, which were both up and down during that period, or any of the many technical hurdles that faced the then-fledgling industry. His answer boiled down to partisan federal politics.
Essentially, as Williams tells it, offshore development moved ahead under federal Conservatives -- the short-lived Joe Clark government, and the Mulroney administration -- and it stalled under the Liberals.
Which should sound like good news to backers of B.C.'s offshore development, especially anyone who listened to what was said about the new Conservative government's stance on the issue when Stephen Harper and crew took office last January. Certainly, Premier Gordon Campbell sounded like he thought so when he opined in China last week that the federal moratorium on exploration off our coasts could be lifted within two or three years.
But when Williams, who spoke to a B.C. Chamber of Commerce luncheon, talked about present-day events, you get a hint that maybe it's not so simple -- even if today's federal Tories, unlike Clark's, can hang onto power long enough to get something done. The Newfoundland premier has little good to say about Stephen Harper.
Williams has two main beefs with the Prime Minister. One is Harper's refusal to back Newfoundland's quest for a 4.9-per-cent ownership stake in the as-yet-undeveloped Hebron field off Labrador, as well as a "super royalty" that would kick in if oil prices soar. The other is that he won't pass "fallow field" legislation -- a use-it-or-lose-it provision most oil-producing jurisdictions use to pressure oil companies to act on their offshore rights or risk losing them to someone else.
Hebron, Williams told me after his speech, was discovered 25 years ago, and "if we don't get this legislation, [the oil companies] can sit on it forever."
Nor have the federal Tories done anything, aside from offering lip service to the idea, to advance the industry on our coast. Indeed, early this month Natural Resources Minister Gary Lunn was quoted as saying that, at this point, nothing is even being considered.
I don't think this can be taken to mean that the Conservative government is at odds with its namesake predecessors and is hostile to offshore oil and gas. But I'm not surprised if, as a minority government facing an election soon, they're timid about triggering what they know will be a battle royal if or when the moratorium is lifted. And they're also practical about impediments standing in the way.
Developments off Canada's East Coast faced a piddling environmental opposition compared with B.C. Groups opposed were far fewer in number, in skills and in militancy.
Nor did the East Coast have the delicate and sure-to-be-costly issues of native rights to be sorted out. And, as Lunn noted, that absolutely has to come first.
The province is spending more than $4 million a year on this file, and no priority is more urgent than winning first nations support. So maybe Premier Campbell made his optimistic statement because he knows something that we don't.
Or maybe not.
Williams notes the timing for development of B.C. oil and gas couldn't be better. Prices are high.
There's worldwide thirst -- and in the U.S. in particular -- for secure energy from stable suppliers. Canada's alternative -- oil from the Alberta tar sands -- is frightfully expensive.
And B.C.'s shores offer the prospect of a light, easy-to-handle product.
I take his point. But, having been burned by so many premature announcements during my years reporting on Canada's East Coast, I'm not holding my breath about the premier's timetable.
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