2003/04 – 2005/06 SERVICE PLAN Ministry of Energy and Mines

Resource Summary

Resource Linkage — Budget and FTE Allocation

This section provides information on the ministry’s budget and full-time equivalent staff (FTE) allocation, for each of the six core business areas.

Resource Development: This core business comprises four branches: New Ventures, External Relations, Titles, and Geological Survey Branch and has a budget of $14.3 million. The New Ventures Branch, responsible for facilitating oil and gas development, is the largest component of the Resource Development core business, with a budget of $7.8 million. This is comprised $2.8 million base budget, plus supplemental funding of $5 million in 2003/04. The additional funding, approved by Treasury Board in July 2002, is to enable the New Ventures Branch to act upon significant revenue generation and investment creation opportunities, over the next three fiscal years, with respect to 10 projects in the provincial energy and minerals industries. Expenditures over the next three years on the 10 projects (including road rehabilitation, coal-bed methane development, Core laboratory enhancements, and pre-tenure plan participation, amongst others) are expected to produce incremental revenues of $27.2 million, $40.2 million and $65.3 million respectively.

Other major components of Resource Development expenditures are: $2.8 million for the Titles Branch for title administration and land sales, including $0.5 million in 2003/04 for the development of the map selection system; and $2 million for Geological Survey Branch for administering the map place system and related databases, and developing targeted geo-science surveys using public-private partnerships.

Policy and Legislation: This core business is responsible for policy and legislation development for the following areas: Mineral, Oil and Gas, Alternative Energy, Aboriginal and Electricity and has a budget of $3.7 million in 2003/04. The largest single component of the budget is $1 million for implementing the government’s new energy policy. In addition, other policy units will facilitate energy policy implementation by developing a variety of policy changes and legislative amendments. For example, Electricity Policy will complete revisions to the Utilities Commission Act and BC Hydro and Power Authority Act amongst others; and Oil and Gas Policy will develop amendments to facilitate retail natural gas deregulation. Other initiatives include developing projects to increase First Nations opportunities in resource development, implementing a strategy for clean energy investment in BC, and developing policies to increase mineral development.

Mining: The Mining division’s core business is focused on three areas: Health and Safety, Environment, and Reclamation and Permitting. The division has a total budget of $4.5 million, which is equally divided between Health and Safety, and Environment, Reclamation and Permitting. The division is responsible for administering and regulating the mining industry through the full mining cycle — including exploration development, production, reclamation and closure. The Health and Safety budget is designed to allow for inspections and audits at mine sites in a frequency that is sufficient to ensure continuation of the excellent health and safety record of the industry. The program is designed to allow for more frequent inspections and audits at mines with higher accident rates and less frequent inspections and audits at mines that are performing well in these areas. The Environment, Reclamation and Permitting budget is designed to allow for site inspection at mines to ensure compliance with permit conditions and environmental standards. In addition, the budget allows for continuation of regional geological assistance and permitting of new mining operations.

Mining is also responsible administering the Mines Act to ensure responsible reclamation and closure of mine sites. In 2003/04, Mining will complete revisions to the Mineral Exploration Code and the Health, Safety Reclamation Code for Mines in BC to streamline the regulatory process, and work with industry to identify and implement key components of the mining strategy to stimulate exploration and development.

Executive and Support Services: This area supports the Minister’s Office and Deputy Minister’s Office, and through the Ministry of Competition, Science and Enterprise provides financial, personnel, information systems, records management, and information and privacy functions to the ministry. In addition, $5.6 million is provided for the Offshore Oil and Gas unit in 2003/04 for implementing the offshore work plan, including implementing a joint federal-provincial management regime for offshore development.

Contracts and Funding Arrangements: Approximately 40% of the ministry’s budget consists of fixed costs associated with the Columbia Basin Trust, Resource Revenue Sharing Agreements with First Nations, and the Vancouver Island Natural Gas Pipeline Agreement. These expenditures are made in accordance with statutory agreements or contractual arrangements that are largely outside the ministry’s control and influence and consequently do not have performance targets associated with them. For instance, in 2003/04, $2 million is paid in accordance with an agreement with the Columbia Basin Trust to assist it with expenditures. Resource Revenue Sharing payments of $2.5 million are made to First Nations to share revenue received from petroleum, natural gas and mineral extraction under a federal/provincial agreement and agreements with First Nations. Payments of $19.7 million for Vancouver Island Natural Gas Pipeline (VIGAS) are made to satisfy the requirements of the VIGAS agreement.

British Columbia Utilities Commission: The ministry provides a $1,000 vote for the operation of BCUC, which is responsible for the regulation of energy utilities under its jurisdiction to ensure rates charged are fair, and that utilities provide safe and reliable services. Costs of the commission are fully recovered from regulated utilities, and from other areas such as hearings and project applicants. BCUC expects to recover approximately $4.7 million in 2003/04.