2004/05 - 2006/07 Service Plan -- Ministry of Energy and Mines

Goals, Objectives, Strategies, and Results — Continued

Goal 1: To maintain and increase investment in energy and mineral resource development in British Columbia.

Outcome/Key Indicator:: Active, growing energy and mining sectors.

This goal focuses on making British Columbia a more globally and regionally competitive location to increase direct investment and production in the energy and mining sectors. Strategies are designed to make investing in British Columbia's resource sectors more rewarding and certain.

Core Business Area:: Mining and Minerals.

Objective 1:: Increase mining exploration and development activity.

The Ministry's strategies for mining are aimed at attracting a 10 per cent per year increase in mineral exploration expenditure and at least $100 million in capital investment in new or existing mines by industry in each of the next three years.

Performance Measures	2003 Base	2004/05 Target	2005/06 Target	2006/07 Target
Annual dollar amount of mineral exploration expenditure.¹	$50 million	$55 million	$60.5 million	$66.6 million
Capital investment in new or existing mines.²	$100 million	$100 million	$100 million	$125 million


¹	Source: British Columbia Ministry of Energy and Mines, based on annual surveys conducted by the Ministry in collaboration with Natural Resources Canada and Statistics Canada. Note that these figures are measured by calendar year, which is the industry standard. Calendar year performance measures apply to the fiscal year with the first nine months in that calendar year. For example, investment in calendar year 2004 is used to measure performance in fiscal year 2004/05. Exploration expenditures for 2002 are estimated at $40 million, and for 2003 the preliminary estimate is between $45 and $55 million. The mid-point of that range, $50 million, is used as an estimate of the 2003 base level.
²	Source: British Columbia Ministry of Energy and Mines, based on annual surveys conducted in collaboration with Natural Resources Canada and Statistics Canada. This performance measure is also on a calendar year basis (see footnote 1, above).

Strategies:: 1. Market British Columbia's mining opportunities to the investment community.; 2. Work with exploration and mining companies, communities, and other provincial and federal agencies to enhance mine exploration and development.; 3. Facilitate infrastructure development to improve exploration and mine access.; 4. Enhance relationships between First Nations, industry and government to develop greater opportunities and certainty on the land base.; 5. Provide information to the public and industry on mineral deposits and potential.; 6. Develop alternative mechanisms to fund the further advancement of baseline minerals geoscience in British Columbia.; 7. Enhance mineral title administration by implementing a web-based map selection system.

Core Business Area:: Oil and Gas.

Objective 2:: Increase British Columbia's oil and gas production and activity, and expand into new basins.

The Ministry is implementing the Oil and Gas Development Strategy for the Heartlands and is anticipating achieving a 17 per cent increase in natural gas production and a 31 per cent increase in the number of wells drilled over the next three fiscal years.

Performance Measures¹	2003/04 Base	2004/05 Target	2005/06 Target	2006/07 Target
Raw Natural Gas Production — Trillions of cubic feet (Tcf).	1.068 Tcf	1.130 Tcf	1.194	1.254 Tcf
Crude Oil Production — Millions of barrels (Mbbls).²	14.44 Mbbls	14.14 Mbbls	13.77 Mbbls	13.52 Mbbls
Number of oil and gas wells drilled.	1 144 wells	1 328 wells	1 wells	1 496 wells


¹	Source: Ministry of Energy and Mines, Oil and Gas Division. Note that previous service plan targets were relative measures with no base level given. The new numeric measures are easier to understand and track.
²	British Columbia's portion of the Western Canadian Sedimentary Basin, the source of all current oil and gas production, does not contain large oil reserves. The declining target for crude oil production reflects a mature phase of oil resource development, characterized by declining reserves for each additional well. The Ministry is implementing programs to slow the rate of decline by encouraging companies to improve recovery efficiency of the remaining potential oil resources, such as the British Columbia heavy oil royalty.

Strategies:: 1. Develop and implement new royalty and other incentive programs to increase production and activity.; 2. Facilitate infrastructure development to improve access to oil and gas exploration and development opportunities.; 3. Develop improved knowledge and information base for petroleum geology to identify new energy development opportunities within British Columbia.; 4. Identify, stimulate and facilitate development opportunities for under-explored and unconventional resources, including coalbed gas, deep gas and tight gas, in both existing and new basins.; 5. Identify and implement measures to enhance British Columbia's oil and gas service sector.

Objective 3:: Increase investment in British Columbia's oil and gas sector.

Performance Measure	2003/04 Service Plan Target	2004/05 Target	2005/06 Target	2006/07 Target
Annual dollar amount of oil and gas industry investment in British Columbia.¹	$3.3 billion	$4 billion	$4 billion	$4 billion

Source: Canadian Association of Petroleum Producers. Note that these figures are measured by calendar year, which is the industry standard. Calendar year performance measures apply to the fiscal year with the first nine months in that calendar year. For example, investment in calendar year 2004 is used to measure performance in fiscal year 2004/05. Investment includes industry expenditures on geological and geophysical studies, acquisition of petroleum and natural gas rights, exploration and development drilling, production wells and flow lines, field equipment, processing plants, pipeline and compression facilities and enhanced oil recovery, but does not include royalty payments to the Province.

Strategies:: 1. Position British Columbia as a fiscally competitive jurisdiction for resource development opportunities.; 2. Implement an investment attraction strategy to promote and market opportunities in British Columbia's energy resources.; 3. Enhance relationships between First Nations, industry and government to develop greater opportunities and certainty on the land base.; 4. Undertake community information programs on proposed oil and gas projects.; 5. Clarify freehold mineral title to facilitate access to both energy and mineral resources.

Objective 4:: Facilitate the development of British Columbia's offshore oil and gas resources in an environmentally sound manner.

Performance Measure

2003/04
Service Plan
Target

2004/05
Target

2005/06
Target

2006/07
Target

Components of the offshore work plan implemented.

Develop work plan.

This target has been met.

Complete joint federal-provincial management regime to fully regulate offshore oil and gas development.

Permits issued for a seismic exploration of British Columbia's offshore.

Seismic exploration program underway.

Strategies:: 1. Complete further scientific work to define the scope of potential offshore exploration areas.; 2. Establish mechanisms to include First Nations and coastal communities in offshore development plans.; 3. Pursue "agreement in principle" negotiations with Canada, First Nations and tenure holders to finalize a regulatory and fiscal regime for exploration, development and production.

Core Business Area:: Electricity and Alternative Energy.

Objective 5:: Stimulate investor interest in British Columbia's electricity, clean and alternative energy and energy efficiency sectors.

Performance Measure	2003/04 Service Plan Target	2004/05 Target	2005/06 Target	2006/07 Target
Annual dollar amount of investment in British Columbia's electricity, energy efficiency and alternative energy sectors.	Achieve a 10 per cent increase in the clean energy sector. This target has been met.¹	Establish new investment baseline for the electricity, clean and alternative energy and energy efficiency sector; achieve 10 per cent increase over the baseline level.	Additional 10 per cent increase.	Additional 10 per cent increase.


¹	The clean energy sector includes all forms of energy production and technology that minimize environmental impacts relative to conventional hydrocarbon resources and technology, including wind, solar, biomass, geothermal, biomass and ocean (wave and tidal) energy sources and technologies.

Strategies:: 1. Promote, develop and implement policies to increase investment in the following priority areas: alternative energy (specifically hydrogen and fuel cells); wind power; biomass; small hydro; community energy planning; alternative energy solutions for remote communities; and energy efficiency and conservation.; 2. Establish a mechanism to monitor investment levels in electricity and alternative energy and update the current investment baseline.; 3. Pursue financial and cooperative partnerships with the federal government for priority activities in areas of common interest.; 4. Be an advocate for electricity, alternative energy and energy efficiency and conservation investments in British Columbia.; 5. Develop and implement strategies and targets to improve energy efficiency in new and existing buildings.; 6. As part of the Province's efforts to address the issues associated with greenhouse gases and climate change, implement all related initiatives that are under the responsibility of the Ministry, as listed in Appendix 1, Consistency with Government's Strategic Plan.

Objective 6:: Implement and/or oversee the implementation of the Policy Actions in the provincial Energy Plan by the end of 2004/05.

Performance Measure	2003/04 Base	2004/05 Target	2005/06 Target	2006/07 Target
Implementation of the Policy Actions in the provincial Energy Plan and improvements to the Plan.	Implement legislation for the Heritage contract, changes to the BCUC Act, and a new Transmission Corporation Act.	Update/distribute a "report card" on Energy Plan implementation, including recommendations for improvements to the Plan.	Update/distribute a "report card" on Energy Plan implementation, including recommendations for improvements to the Plan.	Update/distribute a "report card" on Energy Plan implementation, including recommendations for improvements to the Plan.

Strategies:: 1. Facilitate the full implementation of the publicly owned, independent transmission operator through implementing appropriate regulations/orders under the Transmission Corporation Act.; 2. Develop and implement a legislated heritage contract, stepped rates and transmission access.; 3. Participate in regulatory review processes, for example, environmental assessment and British Columbia Utilities Commission reviews.; 4. Participate actively with utilities and others in the development of Regional Transmission Organization West and monitor regulatory issues in other jurisdictions to ensure access for Independent Power Producers and BC Hydro to regional markets.