2002/03 Annual Service Plan Report Ministry of Energy and Mines

Year-at-a-Glance Highlights

A weak US economy and lower energy and commodity prices made for a challenging economic environment in the energy and mining sectors in fiscal 2002/03, and curtailed anticipated exploration and production activity. However, 2002/03 also saw the implementation of some significant Government initiatives that will lay the foundation for more private sector opportunities in the future, including the release of the Government's new energy plan, and legislation to resolve coalbed methane ownership. The Ministry's achievements in 2002/03 include:

• Energy Plan — the Government released its energy plan in November 2002, Energy for our Future: A Plan for BC. The plan is designed to increase investment in the energy sector and maintain low-cost electricity and public ownership of BC Hydro.
• Offshore Oil and Gas — Cabinet approved up to $8.2 million to the end of fiscal 2004 ($2.4 million in fiscal 2002/03; and $5.8 million in fiscal 2003/04) to establish and resource a dedicated offshore oil and gas team.
• Revenues — revenues from oil, natural gas, electricity and mineral resources were $1.51 billion for 2002/03, 4 per cent higher than revenue estimates and 16 per cent higher over last fiscal.
• Oil and Gas Rights Sales — dispositions of British Columbia's oil and gas rights brought in over $280 million for 2002/03.
• Coalbed Methane (CBM) — British Columbia has a huge coalbed methane endowment of approximately 89 trillion cubic feet. In order to provide certainty of CBM ownership to enable development of a CBM industry in British Columbia, the Ministry developed the Coalbed Gas Act. The Act will be brought into force in 2003/04.
• Revenue Initiatives — the Ministry received Cabinet approval and $5 million funding (for 2002/03) to enable it to act upon significant revenue generation and investment creation opportunities over the next three fiscal years with respect to ten projects in the energy and minerals industries, including: road rehabilitation, coalbed methane development, core laboratory enhancements, and pre-tenure plan participation, amongst others.
• Mining Two Zone Land Use System — to increase investor confidence, a new "two zone" land use system for mineral exploration and mining was created to clearly define lands as either open or closed for exploration and mining.
• Health, Safety and Reclamation Code (HSRC) — is the primary regulatory mechanism for mines in British Columbia, from exploration to mine closure and reclamation. The Ministry completed a review of the HSRC, which resulted in eliminating over 900 requirements and the replacement of prescriptive by performance based regulations.
• Deregulation — the Ministry reduced unnecessary regulations by approximately 15 per cent (or 2,657 regulations). This was largely achieved by adjustments made by the Oil and Gas Commission, and revising the Health, Safety and Reclamation Code for Mines in British Columbia.
• First Nations — Treaty Negotiations Office announced the establishment of the First Nations Economic Measures Fund to support economic development projects involving First Nations. $1.9 million has been set aside for oil and gas projects. Several projects were given notional approval in 2002, with a strong focus on Treaty 8 First Nations communities.
• Community Information Forums — the Ministry completed a series of six community information sessions in various locations around the Province to provide communities with information on resource development opportunities, including safe coalbed methane development.
• Investment Promotion — the Ministry promoted investment opportunities in British Columbia's mining and oil and gas sectors, which included participating in major North American oil and gas, and mining shows.
• Mineral Exploration — spending increased to $40 million in 2002.
• Mineral Claims — have increased 34 per cent over last year due in part to an increase in metal prices and a more favourable mining regime in the Province.