Strategic Context
British Columbia is in the fortunate position of having abundant opportunities for energy, mineral and petroleum resource development. The Ministry is committed to working with communities, industry, First Nations and environmental organizations to ensure that the continued growth and development of these sectors is both competitive and environmentally responsible. At a time when the markets for these commodities are forecasting continued strength, British Columbians are witnessing increased jobs, business opportunities and government revenue from the production and sale of these publicly-owned commodities. At the same time, continued public ownership of BC’s transmission, distribution and generation assets and the BC Utilities Commission’s regulation of domestic rates under the heritage contract mean that electricity prices within British Columbia are among the lowest in North America.
Oil and gas activity levels remain robust in the British Columbia portion of the Western Canadian Sedimentary Basin, with many companies pursuing BC’s relatively unexplored oil and gas potential. Companies are still able to acquire substantial contiguous blocks of rights in BC, which is particularly valuable for those pursuing development of oil and gas resources.
The recent resurgence in the mining sector reflects both the fact that BC is one of the richest mineral regions in the world and that the Province has undertaken improvements in government policy, regulation and support for the mining industry. The significant international upturn in the mining industry, for all commodities, coupled with the growing economies of Asia, provide British Columbia with an opportunity to benefit from exploration investments and new and expanded mine developments.
British Columbia energy consumption continues to increase. The need to reduce the growth in demand, and manage the link between energy use, greenhouse gas emissions and air quality, will drive efforts toward conservation, greater energy efficiency and the development of additional clean sources of energy. Implementing policies such as “Energy Efficient Buildings: A Plan for BC” will help British Columbia achieve these objectives. The responsible development of the Province’s clean and renewable electricity resources is a key aspect of BC’s energy future. British Columbia is currently a net importer of electricity, and investments in generation within the Province will reduce exposure to price swings and security of supply issues associated with imports from neighbouring jurisdictions.
Technology plays an important role in reducing energy use per capita or per unit of Gross Domestic Product, without sacrificing economic growth. Considerable opportunities exist to develop and commercialize new energy technologies and renewable energy sources such as hydro, wind, geothermal, ocean energy, biomass, biofuels, and clean coal.
Annually, the Ministry of Energy, Mines and Petroleum Resources assesses its risks and opportunities as part of the strategic planning process. Once these risks/opportunities have been identified they are addressed through strategies that result in successful implementation of the Ministry’s goals and objectives for that given period. The following is comprehensive list of the aforementioned external and internal risks and opportunities.
External Risks
Financial — Financial markets have moderately tightened and this could impact the potential for the Province to see significant increases in spending and investment in some sectors in 2006–2007. In addition, while commodity prices impact investment levels, prices are completely beyond the control of the Ministry. Therefore, the Ministry is focused on identifying the opportunities created by the high commodity price environment to accelerate responsible and sustainable development in the near-term even though the financial markets may continue to experience volatility.
Competition — Investment dollars move readily around the globe to the jurisdictions that provide the highest net return for given levels of risk. The Ministry monitors changes in British Columbia’s competitiveness as compared to other jurisdictions and implements strategies to maintain our competitive position and investment attractiveness.
Environment — Current provincial efforts at reducing greenhouse gas emissions will continue. This pervasive issue remains difficult for governments to manage because, while perceived by many as an environmental issue, the implications in the near term are largely economic. The time frame for action, measured in decades, tends to challenge governments faced with more immediate demands for limited financial and public sector resources. British Columbians generally do not recognize the influence their energy-use decisions have on provincial resource development, infrastructure management and energy policy. The Ministry will, as part of the Energy Plan renewal, consider implementing awareness campaigns to ensure consumers are fully cognizant of their energy use choices and decisions and will determine a set of incentives to promote conservation of energy use.
Skilled Workers — With the growing demand throughout Canada for both skilled and unskilled workers in the transportation and construction sectors, as well as the energy and minerals sectors, the Ministry will continue to engage in new strategies for attracting, training and retaining workers.
External Opportunities
Global Supply/Demand — The emergence of China and India as major commodity consumers has increased demand and prices in a wide range of resource commodity markets. For example China’s growing steel demand has boosted world demand for and price of metallurgical coal. As a result, coal companies have taken a renewed interest in British Columbia’s major coal deposits. Additionally, China is emerging as a new source of investment funds that can be attracted to this Province. North American demand for oil and gas continues to increase while new supply opportunities are limited.
First Nations and Community Consultation — There is a need to build new relationships with First Nations’ communities so that they can share the benefits of energy, mineral and petroleum exploration, development and use. In addition, all of British Columbia’s communities in resource rich areas continue to seek earlier and more comprehensive information from government regarding resource development in their areas. Many First Nations and communities are actively looking at the opportunities open to them to engage in proactive energy planning — ranging from energy conservation programs to the economic development opportunities associated with resource development, and the opportunity to contribute to the development of sound public policy. The Ministry will be working to operationalize the New Relationship with First Nations as well as implementing a community engagement strategy to enhance public confidence, provide greater community benefits and increase investment certainty for industry.
Internal Opportunities
Collaborative Relationship with Stakeholders — The Ministry will continue to strive to build exemplary relationships with its key client groups and stakeholders. The Ministry recognizes the need to build strong relationships to advance new programs and strategies.
Technology — The Ministry is pushing forward a number of technological initiatives to enhance service and attractiveness to industry, such as an online permitting system for mineral exploration, BC’s state of the art mineral resource and geoscience databases, and interactive mapping websites.
Regulatory Streamlining — The Ministry has reduced regulation to facilitate development while ensuring the integrity of environmental, health and safety standards. The Ministry continues to support the government-wide Regulatory Reform initiative by meeting the goal of no net increase in regulation over the next three years.
New Opportunities Explored — The Ministry is undertaking a comprehensive review of the 2002 “Energy for our Future: A Plan for British Columbia” in order to present a contemporary blueprint for the people of the Province. The Ministry is anticipating the release of three significant initiatives in the near future in addition to the November 2005 BC Progress Board report on the energy sector. These are the Alternative Energy and Power Technology Task Force report, BC Competition Council reports on mining and oil and gas, and BC Hydro’s Integrated Electricity Plan. The Ministry will be implementing a community engagement strategy that will focus on working with local governments, communities and non-governmental organizations to seek advice on key policy matters and to provide information on the benefits and opportunities of resource development.
The Ministry is also looking to mitigate some of the negative effects of the Mountain Pine Beetle epidemic by enhancing opportunities to develop oil and gas basins and mineral deposits in impacted areas. We will also encourage First Nations’ and community employment and other forms of participation in the energy, mineral and petroleum resources sectors.
Core Business Areas
Oil and Gas
The Crown owns the vast majority of the Province’s petroleum and natural gas resources. The Ministry of Energy, Mines and Petroleum Resources is responsible for the management of these resources and is mandated to ensure protection of the environment in oil and gas development as well as ensure that benefits from these resources are maximized for all British Columbians. In 2005/06, Provincial government revenue generated directly from the production of oil and gas in BC is expected to be approximately $2.8 billion, or about eight per cent of total provincial revenues. With abundant oil and gas deposits throughout the province, oil and gas revenue will continue to play an important role in the provincial economy.
The Oil and Gas Division is planning now for the future as it reviews its policies and programs to enhance the oil and gas regulatory regime in order to protect human health and the environment. The Division also strives to maximize the benefits from the Province’s oil and gas resources, including increasing revenue and private sector business opportunities, implementing innovative oil and gas infrastructure and royalty programs, developing the Interior Basins, promoting geological potential, and enhancing the competitive business climate for oil and gas service companies.
The Titles Division issues and administers tenures for Crown-owned petroleum and natural gas, geothermal and underground gas storage rights, and collects associated revenues. The monthly disposition process for oil and gas rights generates over $400 million in revenue annually, while the administration of tenure provides a further $60 million each year.
Offshore Oil and Gas
The Offshore Oil and Gas Division was established to enable offshore oil and gas development to occur in British Columbia in a scientifically sound and environmentally responsible manner. The Province of British Columbia believes that the potential opportunities provided by offshore oil and gas development are of significant public value. The Province is taking a principled approach to researching management and regulatory regimes in other jurisdictions in order to identify best practices for west coast offshore development. Moving forward, the Division will continue to work with communities, First Nations, the federal government and key stakeholders. The focus will be to work with the Ministry of Environment, consult with First Nations, environmental organizations and coastal communities to develop a comprehensive regulatory regime and advance the knowledge of offshore energy development.
Mining and Minerals
Mining has fueled economic development throughout the province since the first Gold Rush nearly 150 years ago. British Columbia is rich in mineralization and is ranked high by companies with respect to mineral resource potential including coal, aggregate, industrial minerals and metal resources. Mining revenues and jobs are increasing as government policies and commodity prices fuel investor confidence and attract the mining industry to develop these rich resources. The provincial government is committed to attracting exploration investment and building the mining industry in order to ensure benefits for all British Columbians.
The Mining and Minerals Division develops and implements policies and programs to enhance British Columbia’s competitiveness world-wide in order to attract new investment in mineral exploration and mining. The Division is responsible for health, safety and environmental regulation at mine sites, which is part of the framework that establishes British Columbia’s mines among the most environmentally responsible and high tech, and the safest in the world. It manages the exploration and development of mineral resources to ensure the involvement of communities, environmental organizations and First Nations, and is responsible for the development and implementation of the BC Mining Plan.
The Titles Division issues and administers tenures for Crown-owned mineral, placer and coal rights. In January 2005, the Division enhanced service delivery to clients through implementation of the award-winning “Mineral Titles Online.” Mineral Titles Online is a state-of-the-art, internet-based mineral tenure acquisition and maintenance system.
Electricity and Alternative Energy
The Electricity and Alternative Energy Division develops and implements policies and programs to support all forms of electrical power generation, alternative energy sources, energy efficiency measures, leading edge and evolving technologies. Energy, economic and environmental policies are intertwined. As British Columbia’s economy strengthens and diversifies, it continues to rely on secure, reliable, low-cost electricity. At the same time, British Columbians are committed to environmentally responsible energy development and energy efficiency. The government is dedicated to striking a balance between the development of conventional sources of electricity in a responsible manner, and developing policies that will lead to the use of new and alternative sources. The Division is responsible for implementing the electricity and alternative energy policy actions in “Energy for Our Future: A Plan for BC,” for developing and implementing provincial policy with respect to BC Hydro and the BC Transmission Corporation, and for ensuring that British Columbia’s energy interests in inter-jurisdictional issues are met. The provincial government has received the final report of the Alternative Energy and Power Technology Task Force. The Division will work with other ministries and agencies to implement those recommendations approved by Cabinet.
Marketing, Aboriginal and Community Relations
The Marketing, Aboriginal and Community Relations Division provides a corporate service to the other divisions by leading the Ministry’s First Nations and community engagement strategy, corporate policy, strategic planning, intergovernmental relations and legislation. The Division is responsible for the Ministry’s objective of advancing the New Relationship with First Nations and working with communities in the development of energy, mineral and petroleum resources throughout the province. The Ministry aims to increase First Nations participation in these resource sectors through consultation and accommodation initiatives. The Division is also responsible for the administration of the Mediation and Arbitration Board.
Executive and Support Services
Financial and administrative support services, payroll, human resources and budgeting, are provided by the Management Services Division as a shared service with the Ministry of Economic Development.
