By Monte Stewart

Offshore oil and gas industry insiders in B.C. are taking a wait-and-see approach to the potential lifting of a controversial exploration moratorium in the wake of a new Conservative government in Ottawa.

Prime Minister Stephen Harper's policy platform favours exploration and environmental assessment of offshore resources on both the Pacific and Atlantic coasts.

"We're hoping the (federal and provincial) governments will review where things are at and move the process forward," says Ted Spearing, manager of environment, safety and public affairs for Chevron Canada Resources, which along with Shell Canada has mineral rights for offshore B.C.

"(The first-term provincial government and former federal government) did communicate with each other, and we're hoping to see more communication between these current governments."

The federal moratorium on B.C. offshore exploration has been in place since the early 1970s. The B.C. government has also had a moratorium, but is widely expected to lift it if the feds scrap their ban.

Spearing and other offshore proponents have called for an end to the moratoriums in order to determine the size of the resource and the potential benefit to coastal communities.

"There is a lot of work that needs to be done," says Spearing. "There's a need (for the federal and B.C. government) to determine the regulatory regime that we actually could proceed under. There's a need to carry on with environmental protection measures that would need to be in place. And there's a need to address First Nations issues to the satisfaction of all the affected parties. That's a fair amount of work to get through."

The provincial government previously set a goal of launching offshore activity by 2010, but industry and government officials have acknowledged that deadline is unlikely to be met.

"(The Conservatives) certainly understand the issues that are confronting us," says B.C. Premier Gordon Campbell.

Former Liberal industry minister David Emerson - now a newly minted Conservative cabinet minister after his surprise leap to the winning team last week - "was a very positive proponent for offshore oil and gas," Campbell added.

"(And) I would certainly hope that we'll hear the same thing from the Conservative MPs that we have all along."

During a visit to Victoria in 2004, Harper told reporters that his party "always wants to be sensitive to environmental concerns. But I think absolute bans on development in British Columbia's offshore is just a disadvantage imposed on this province by Ottawa and something the province does not want."

Several Tory MPs have since spoken out in favour of offshore exploration in B.C. However, north coast and Vancouver Island Tory candidates who campaigned in favour of offshore exploration were defeated on federal election day. And, the Campbell government has rarely discussed the issue publicly since the NDP boosted its ranks to 33 MLAs from two in last May's provincial election.

When asked if his government will now push Ottawa to permit B.C. offshore oil and gas exploration, Campbell says: "It's not a question of pushing.

"It's a question of bringing the federal and provincial jurisdictions together so we're working simultaneously to develop the science," he says. "And if we do that, we move together, as opposed to separate processes. We'll shrink the timelines."

But, adds Campbell, both levels of government and industry still must do a lot more research before a decision can be made on offshore oil and gas in B.C.

"We still have a lot of work to do in terms of building the facts, the science that we need, the oceanography that we need, the seismic that we need," says Campbell. "All of that is work that's got to be done by the federal and the provincial governments together."

But Ian Thomson, president of the B.C. Biodiesel Association, says the provincial government should instead focus its resources and efforts on alternative fuels.

"With plenty of oil in Alberta, the B.C. coast is obviously not the best place to go for oil," says Thomson, also the CEO of North Vancouver-based Canadian Bioenergy Corp., Western Canada's largest distributor of biodiesel fuel. Biodiesel is a clean-burning fuel sourced from renewable products such as vegetable oils and oilseed crops.

B.C.'s pristine coast should be maintained, Thomson adds, noting there is "incredible concern" about the effects of offshore oil and gas development on oceans in general, and B.C. in particular, because of its large tourism industry and natural assets.

Thomson says it makes more sense to invest in conventional fuels in established exploration areas, such as the oilsands, or in alternative sources.

Canada's economy will be running on fossil fuels for the foreseeable future, Thomson admits, while renewables will occupy a small part of the fuel pool.

But he questions whether offshore exploration is safe and economical. "Investments in renewables will have a payback in perpetuity."

Karen Campbell, an oil and gas lawyer with Vancouver-based West Coast Environmental Law, believes the Conservatives will actively pursue offshore oil and gas development in B.C.

She is also concerned that the Tories will allow seismic testing before deciding whether to allow exploration. "Seismic in and of itself is going to have an impact on the offshore," says Campbell, adding it is known to have a negative effect on marine animals.

However, proponents of offshore development dispute such claims, contending seismic is necessary to determine whether drilling should or should not be conducted while possibly preventing environmental problems over the long term by minimizing future activity.

Karen Campbell is also concerned the new federal government will take steps to lift a separate ban on supertanker traffic along the West Coast, a moratorium that has also been in place since the early 1970s.

The supertanker moratorium is becoming more of an issue because Calgary-based Enbridge Inc., through wholly owned subsidiary Gateway Pipeline Inc., and Vancouver-based Terasen Inc., through Calgary-based subsidiary Terasen Pipelines, are proposing to build new pipeline terminals at the deepwater port of Kitimat.

The terminals would handle incoming and outgoing petroleum products between B.C. and overseas.

Meanwhile, Calgary-based Galveston LNG, through wholly owned subsidiary Kitimat LNG Inc., is proposing to build a liquefied natural gas terminal near Kitimat and Calgary-based Westpac Terminals Inc. is proposing to build a similar facility at nearby Prince Rupert.

Karen Campbell says extensive consultation and extensive scientific research should be done before any action is taken on possibly scrapping the supertanker ban. She adds West Coast Environmental Law will likely express its views soon to new Natural Resources Minister Gary Lunn, MP for the riding of Saanich and the Gulf Islands.

She notes recent polls conducted by West Coast Environmental Law and other groups show three out of four British Columbians oppose offshore exploration and supertanker traffic along the West Coast. Of those polled, Vancouver Island residents are even more opposed than Lower Mainlanders. "So I hope (Lunn) is going to reflect that (Vancouver Island) point of view," says Campbell.

Paul Cassidy, a lawyer with Blake, Cassels and Graydon LLP in Vancouver who acts for industry and government on offshore petroleum issues, does not expect the new Harper regime to make serious efforts to lift the federal moratorium.

"My estimate is you won't see a significant change in the federal position as long as there is a minority government," Cassidy predicts.

A day after being sworn in, Lunn told reporters the moratorium on offshore oil and gas drilling in B.C. is not a priority for the Conservatives. The government wants to focus on other issues first, he added, and while he wants scientific research to go forward, he will discuss the issue with the provincial government.

Although the 2010 deadline is not likely to be met, Premier Gordon Campbell says his government will continue to press on with its offshore oil and gas program.

"If you think of our oil and gas future in British Columbia, there's a major activity taking place in (the) Peace River (region) right now," he says. "We want to make sure that people know about the opportunities in the Nechako basin and the Bowser basin, and as we move through those opportunities, we'll be positioned so that we can move into the offshore - and all British Columbians and coastal communities will benefit from that. But it's got to be done in a way that protects the environment."