Appendix 1. Strategic Context

Vision, Mission and Values

Vision

Thriving, competitive, safe and environmentally responsible energy and mining sectors significantly benefiting all British Columbians.

Mission

The Ministry of Energy and Mines facilitates investment in the responsible development of British Columbia's energy and mineral resources to benefit British Columbians.

Values

The following values are the Ministry's fundamental beliefs. They define the Ministry's management style and rules of personal and organizational behaviour.

1. Advocacy — The Ministry represents the people of British Columbia, as owners of the energy and mineral resources, by advocating for the responsible development of those resources. The Ministry represents the interests of the energy and mining sectors to broader stakeholder groups and supports those sectors in responsible development of provincial resources. The Ministry informs the government, industry and citizens of the province of the benefits of responsible resource development.

2. Integrity — The Ministry is committed to respectful, honest and ethical behaviour in all its communications and actions.

3. Responsiveness — The Ministry is service-oriented and responds to the needs of its stakeholders and the public in a timely and effective manner.

4. Accountability — The Ministry is accountable to government and the public and strives to ensure that its actions deliver the results put forth in its Service Plan. The Ministry is effective and efficient in delivering timely services and implementing sound financial management.

5. Professionalism — The Ministry is committed to maintaining the highest levels of both technical competency and public service values, and encouraging innovation and creativity.

6. Partnership Building — The Ministry promotes teamwork, good working relationships and effective partnerships with others.

Planning Context

The planning context is an assessment of external and internal forces that can have a significant impact on the Ministry's ability to deliver results. In developing this service plan and making decisions on programs, the Ministry has considered the following context, strengths and challenges.

Strengths

• Natural Gas and Oil Resources: A growing North American demand for natural gas, combined with declining supply in the United States, will guarantee a continuing opportunity for growth in British Columbia natural gas production. Additional gas supply potential has been identified from enhanced exploration for conventional gas and preliminary exploration of unconventional sources.
• Coalbed Gas (CBG) Resources: British Columbia has a huge CBG resource endowment estimated at about 89 trillion cubic feet. To date, only small scale exploratory drilling has occurred. The degree to which this large potential energy resource is utilized will depend on natural gas prices and government implementing appropriate regulatory and competitive royalty regimes, while addressing issues raised by communities and First Nations. At this time, considerably more exploratory drilling and pilot production projects need to be implemented to determine which portions of the resource are economically recoverable.
• Offshore Oil and Gas Potential: The oil and gas resource potential off the west coast of British Columbia is estimated at approximately 9.8 billion barrels of oil and 43.4 trillion cubic feet of gas. Although these resources are unproven, the amounts are comparable to existing marketable and recoverable resources in the northeast portion of the Province. In the longer term, development of offshore oil and gas resources will produce substantial direct and indirect revenues to the province.
• Rich Mineral Endowment: The province has a wide variety of mineral and coal deposits and many more waiting to be discovered. These resources have played a major role in regional communities for more than a century and continue to perform a key role in the provincial economy.
• Improving Investment Climate for Mining Industry: Recently mining companies have been successful in raising greater funds for mineral exploration and mine development. British Columbia has created a more competitive climate to attract these investments, primarily by regulatory streamlining and implementing tax credits and flow-through share incentives for mineral exploration investment that make after-tax exploration dollars spent in the province among the lowest cost in Canada. The Province has the potential to attract industry back to British Columbia and capitalize on significant growth potential for the coal, industrial mineral and metal mining sectors. The Ministry continues to look for ways and means to enhance exploration and development of the provinces coal, mineral, industrial mineral and aggregate resources. The Mining Task Force has been established to provide recommendations to the Minister of Energy and Mines on how to revitalize the mining industry in British Columbia.
• Reliable Electricity System: British Columbia's large, flexible hydroelectric system on the Peace and Columbia Rivers supplies customers through an integrated large transmission network. Our transmission system is integrated with those in the US Pacific Northwest and Alberta, allowing for economic purchases and sales that optimize the British Columbia system. British Columbia is able to provide power at high demand times and provide load shaping for the region. British Columbia's large, undeveloped resource potential for electricity generation using natural gas and coal, and alternative energy resources provides an opportunity for increased exports.
• Clean and Alternative Energy Potential: The province has enormous potential to develop alternative energy resources and related applications. These encompass innovative technologies; advanced energy carriers; and progressive applications for conventional energy resources that reduce their relative environmental impacts, conserve a non-renewable resource, and/or improve overall efficiency of resource utilization. Examples include: small and micro-hydro power; biomass; bio-fuels; earth energy; hydrogen; fuel cells; wind; solar; tidal; wave; cogeneration; energy from landfill gas and municipal solid waste; advanced coal combustion technology; and carbon capture and sequestration processes.
• Leader in Energy Efficiency and Conservation: British Columbia is a leader in energy efficiency and conservation through government policies, energy utility programs and private sector activities. Additional investment opportunities exist for energy efficiency in buildings, equipment, industry and transportation.

Challenges

• Investment Promotion: British Columbia has some of the most abundant natural resource opportunities in the world, but these alone will not attract investment even in a strong economy. Information about government initiatives to make British Columbia a more competitive investment location needs to be aggressively marketed to the investment community.
• Labour Shortages: In certain occupations and geographic locations in the province, employers in the energy and mineral sectors are finding it difficult to attract skilled workers such as heavy-duty mechanics and high-pressure welders. In the oil and gas industry an increase in the number of drilling rigs has not been met by an increase in skilled labour needed to operate the rigs. As the industry grows, including northern pipeline development, there is a growing need to ensure that an appropriately trained workforce is available.
• Land Access and Security of Tenure: Regardless of the Province's land-use planning process and two-zone system, there remains a high level of uncertainty with regard to access to resources that inhibits business planning activities and investment. Project proponents also need to factor in addressing First Nation concerns and government's role in undertaking consultations with regard to proposed activity permits and tenures.
• Consolidation in the Oil and Gas Industry: In 1998, four of the top 10 British Columbia producers were American subsidiaries/affiliates and accounted for 23 per cent of all production in that year. By 2001, six of the top 10 were American subsidiaries/affiliates and accounted for 35 per cent of BC production. Although investors continue to be interested in exploration and development opportunities in Western Canada, British Columbia must strive to ensure visibility in American corporate head-offices to sustain interest in provincial resources.
• International Policy and Regulatory Influences: Energy legislation being contemplated by the United States may accelerate the construction of the Alaska Highway pipeline, and through a price support mechanism may also exert downward pressure on the value of existing British Columbia gas supplies. Because of the integrated nature of the electricity transmission system, regulatory developments in the United States regarding reliability and market design are of interest to British Columbia. These include the potential creation of a Regional Transmission Organization (RTO) for the Pacific Northwest and possible United States federal legislation on reliability.

Internal to government challenges

• Reduced Resources: In order to deliver core business functions with reduced resources, it will be necessary for the Ministry to change how business is done. One of the implications is that through initiatives such as results-based regulations the onus will be on industry to comply with standards.
• Attracting and Retaining a Skilled Workforce: The Ministry operates in areas where a highly-skilled technical workforce is essential to fulfill core functions. However, the Ministry is facing the double challenges of losing skills and expertise as its work force retires, and difficulty in attracting and retaining young professionals to public service.

Enterprise-wide Risk Management

By March 31, 2004, all executive members, directors and managers in the Ministry will have been provided training in Enterprise Risk Management.

Risk assessment addresses both the upside and the downside risks the Ministry might face over the next three years in attempting to meet its objectives. The following factors, including external factors, will influence the degree to which the Ministry achieves its objectives:

• Commodity price volatility;
• World economic growth, especially the growth of the United States economy;
• Economic fundamentals such as interest rates, exchange rates, etc.;
• First Nation issues;
• Land access restrictions;
• Concerns regarding the implementation of the Kyoto Protocol; and
• Geological and technical risks in resource development projects.

Highlights of Shifts and Changes from the Previous Plan

This plan is the Ministry's third three-year rolling plan.

The Ministry has added a new goal to the previous three goals, specifically, "To be an exemplary organization and a Ministry of choice as an employer in the British Columbia Public Service".

The Ministry's objectives are for the most part a continuation of the previous year's objectives with the exception that the objective of stimulating investor interest in British Columbia's clean energy sectors has been broadened and redefined to that of stimulating investor interest in British Columbia's electricity, clean and alternative energy and energy efficiency sectors. Under most objectives, new or re-focused strategies have been developed to address emerging opportunities and challenges.

Ministry performance measures and targets have been more clearly defined and in almost all cases are quantified in absolute rather than relative magnitudes. These changes are to provide more immediate and clear evidence of whether or not Ministry objectives are being met.

The Ministry's Mission, Vision and Core Values are revised to better reflect these fundamental aspects of the organization.

Finally, the Planning Context has been updated, as has the description of the consistency of the Ministry's new strategies with the updated Government Strategic Plan.

Consistency with Government's Strategic Plan

The Ministry of Energy and Mines Service Plan is in support of the Government's Strategic Plan. The Ministry's four goals are subsumed by the Government's first and third goals of:

• A Strong and Vibrant Provincial Economy; and
• Healthy Communities and a Sustainable Environment.

The following table describes how the Government-wide strategies and the Ministry's strategies are aligned to achieve these goals.