Ministry 2003/04 -- 2005/06 Service Plan -- Ministry of Energy and Mines

Performance Reporting — Continued

Goal 1: To increase Investment in Energy and Mining Resource Development in British Columbia

Core Business: New Ventures/Energy and Minerals
Objective	Performance Measure	2002/03 Target	2002/03 Actual	Variance (see notes below)
Double oil and gas production in British Columbia by 2011.	Achieve a 33 per cent increase in oil and gas production by the end of 2004/05.	Achieve a 10 per cent increase in oil and gas production over 2001/02 levels.	Target Not Achieved: 1 per cent increase in 2002 gas production.	The volume of gas increased by 1 per cent.
			8 per cent decline in 2002 crude oil production.	Crude oil declined 8 per cent.
	Achieve a 20 per cent increase in oil and gas exploration (drilling) activity annually for the next three years.	Achieve a 20 per cent increase in oil and gas exploration (drilling) activity over 2001/02 levels.	Target Not Achieved: 14.5 per cent increase in oil and gas exploration (drilling).	5.5 per cent variance.

Variances

The oil and gas sectors did not achieve a 10 per cent increase in oil and gas production due to higher than expected declines in the Ladyfern field. Also, the National Energy Board deferred approval for the Grizzly Valley extension and Kwoen gas plant.

Oil and gas exploration did not meet anticipated targets due to one of the shortest drilling seasons on record as a result of unseasonably warm winter weather.

Drilling activity was affected as a result of very high drilling activity in the previous year, along with low gas prices and uncertainty in corporate finances (e.g. Enron), which, in turn, lead to lower that anticipated cash flow availability for companies to conduct new drilling activities.

Core Business: Energy and Minerals/Resource Development

Objective

Performance Measure

2002/03 Target

2002/03 Actual

Variance

Generate $20 billion worth of cumulative investment in the oil and gas sector by 2008.

Increase investment in the oil and gas sector.

Generate $3.3 billion worth of investment in oil and gas.

Target Achieved:

$3.6 billion worth of capital investment in British Columbia's oil and gas sector.

9 per cent increase; achieved $0.3 billion more investment than the targetted $3.3 billion.

Core Business: Energy and Minerals
Objective	Performance Measure	2002/03 Target	2002/03 Actual	Variance
Stimulate and facilitate coalbed methane production.	Have industry evaluate specific coalfields.	Commence drilling exploratory CBM wells.	Target Achieved: 3 test holes and 3 wells drilled.
	Commence commercial CBM production.		Ongoing testing of CBM production characteristics.
Increase mining exploration and development activity.	Increase British Columbia's share of national exploration expenditures from its current level of 8 per cent to 10 per cent by 2004/2005.	Maintain British Columbia's 8 per cent share of national exploration expenditures.	Preliminary figures indicate that exploration expenditures in British Columbia reached 8 per cent of the national total.
	Realize $300 million in capital investment in new or existing mines in British Columbia by 2004/05.	Achieve $50 million in capital investment.	Target Achieved: Preliminary figures indicate capital investments of $87 million.	$37 million.
Stimulate investor interest in British Columbia's alternative energy sectors.	Increase investment in British Columbia alternative energy sector.	Develop a baseline measure of investment in British Columbia's alternative energy sector.	Target Achieved: British Columbia Alternative Energy Investment Baseline developed.
Implement components of Government's energy policy pertaining to electricity.	To be determined.	To be determined.	Energy for our Future: A Plan for BC was released in November 2002. Outcomes as of March 31, 2003: BC Hydro entered into an agreement with Accenture to outsource the delivery of services. The current rate freeze for BC Hydro was not extended. BC Hydro submitted an application for the Vancouver Island Generation Project. Final emission guidelines for coal-fired power plants are in place. Electricity and natural gas energy removal certificates are exempted from regulation.