Highlights of the Year

The substantial growth experienced by British Columbia's energy and mineral sectors in 2003/04 was further accelerated in 2004/05, in part due to the policies and programs of the Ministry of Energy and Mines (MEM or the ministry). High commodity prices, and an improved investment climate created by improved policies and regulatory streamlining, resulted in increased levels of resource exploration and development activity. For the second straight year, energy and mineral resource revenues to the Provincial Treasury surpassed the $2 billion mark, providing funds for healthcare, education and social programs for all British Columbians. Highlights of the ministry's achievements, by core business area, in 2004/05 include:

Oil and Gas

Oil and Gas Development Strategy — The ministry launched the third phase of the Oil and Gas Development Strategy (OGDS) with four new programs, representing an investment of $34.4 million. This funding works to enhance infrastructure and expand training to support industry and communities in the northeast. Highlights include:

• Infrastructure — $30 million in road based royalty credits for 2005/06.
• Communities and Stakeholder Engagement — $2.5 million.
• Service Sector/Education and Training — $1.9 million.

Training and Education — As part of OGDS, government is investing in increased training and education opportunities to support the province's oil and gas service sector. In May, the Provincial Government announced that it will create 250 new student spaces at Northern Lights College by 2010 and a new Oil and Gas Education and Training Consortium. This is a partnership between the Province and industry to develop a comprehensive and coordinated approach to British Columbia's training strategy for the oil and gas sector. In addition, the Province and industry are jointly investing $1 million for oil and gas training programs this year.

Best Practices Working Group — Also as part of OGDS, the Best Practices Working Group (BPWG) was established to recommend regulatory efficiencies and policy improvements. While maintaining environmental, health and safety standards, nine recommendations were implemented worth an estimated $20 million to $36 million per year in cost savings for industry. The ongoing work of the BPWG could provide for an additional $30 million to $40 million per year in savings. The BPWG is a joint initiative between industry and government.

Regulatory Improvement — The ministry commenced the Oil and Gas Regulatory Improvement Initiative (OGRII) which will develop a streamlined results-based framework for more effective and efficient regulation of oil and gas activities in the Province.

Regional Funding — In February 2005, a new agreement with the Peace River Regional District (PRRD), was finalized that will see the province transfer $20 million to the PRRD. This amount will be adjusted annually to reflect changes in industrial property assessment in the region. In addition, one-time funding of $40 million was disbursed to communities in both the PRRD and Northern Rockies Regional District in March 2005, to address infrastructure issues in order to meet the needs of the booming oil and gas industry.

Offshore Oil and Gas — The ministry made two presentations to the federal public review process, setting out the Province's perspective on offshore development. The ministry concluded a protocol agreement with the Nisga'a Nation setting out proposed collaborative activities in relation to public information, science, and development of a regulatory regime. The ministry also led a delegation of some 20 British Columbian businesses to the Offshore Technology Conference in Houston, Texas.

Employment — There were 11,400 people directly employed by oil and gas activities in 2003. That's up 45 per cent since 2001. Approximately 6,800 people are engaged in exploration, production, development and related activities. Approximately 4,600 work downstream in areas such as pipeline transportation, natural gas distribution and petroleum and coal product manufacturing.

Industry Investment — Industry investment has more than doubled since 2001, and is expected to be over $4.5 billion in 2004/2005.

First Nations in Oil and Gas — In March 2004, Treaty 8 First Nations and British Columbia signed a Negotiation Protocol to seek agreement on revenue-sharing and a list of issues by March 2007. To date, the parties have entered into agreements on Treaty 8 First Nations negotiation costs and special projects. These include provision to Treaty 8 of a wildlife biologist, GIS capacity development, business development workshops, a cumulative effects workshop, economic opportunities research, research on participation models and culture and heritage planning. Negotiations with Treaty 8 First Nations are ongoing.

Revenues — Oil and gas revenues were $1.892 billion for 2004/05. Oil and gas contributes the largest proportion of resource revenue to the Provincial Treasury.

Wells Drilled — In 2004, oil and gas drilling activities in B.C. reached a record level - 1,270 wells were drilled, compared to 1,041 wells drilled in 2003.

Summer Drilling — Year round activity provides benefits for communities and government. The Summer Drilling Royalty Program, introduced in 2003, resulted in an increased number of wells drilled during the summer months. Summer drilling increased by more than 100 per cent compared to 2002, with 319 wells drilled from April 1 to November 30, 2004, as compared to only 152 in 2002.

Public Private Partnerships — The Oil and Gas Division accepted the Gold Award for Project Financing at the Canadian Council for Public Private Partnerships 2004 National Awards for Innovation and Excellence for the Sierra Yoyo Desan (SYD) Resource Road project. The award recognizes British Columbia as a leader in enhancing infrastructure through public-private partnerships, which lowers risks and costs to government. The SYD Resource Road project is a 188 km multi-user resource road located northeast of Fort Nelson, operating under a partnership between industry and government.

Petroleum Titles Online — The Ministry implemented Petroleum Titles Online, an internet-based system allowing electronic submission of requests for oil and gas tenures and providing readily accessible online tenure maps and data for industry and the public.

Mining and Minerals

British Columbia Mining Plan — In January 2005 the Provincial Government launched the British Columbia Mining Plan, which presents a vision for a strong, competitive and sustainable British Columbia mining industry for the next decade and beyond. The four cornerstones of the British Columbia Mining Plan are: (1) a focus on communities and First Nations including a made-in-British Columbia approach to sustainable exploration, mining, and relationship building with communities; (2) protecting workers and protecting the environment, including continued leadership by industry and government in worker safety and environmental stewardship; (3) global competitiveness, including actions to increase investment, streamline regulation and improve geoscience information; and (4) access to land, including enhanced integration of exploration and mining with other land uses.

Mineral Titles Online — In January 2005, the ministry launched the innovative and cutting-edge, Mineral Titles Online program that allows prospectors and the mineral exploration industry to acquire and manage their mining claims with more certainty and time savings than ever. Over 2.5 million hits on the website, and more new mineral claim area than all of 2004, were registered in the first two weeks of operation.

Mineral Claims — Nearly 1.1 million hectares of mineral claims were staked in 2004, the most in 13 years. The 2004 activity level was up 80 per cent from 2001.

Mining Exploration — More than 470 exploration projects were underway in 2004, an increase of more than 60 per cent since 2003. New and previously operating mines are also back in operation. To name a few:

• Gibraltar mine near Williams Lake, with 240 family supporting jobs, re-opened in the fall of 2004.
• Pine Valley Mining Corporation's Willow Creek mine, the first new metallurgical coal mine in British Columbia in almost 20 years made its inaugural shipment in September 2004.
• The Dillon coal mine near Chetwynd began production in December 2004.

Mineral Exploration Investment — Investment in mineral exploration in British Columbia topped $130 million in 2004 and is expected to reach $150–$200 million in 2005, five times the total of 2001. This will be the highest level of exploration spending in British Columbia in over 13 years.

New Mineral Potential — There are currently over 20 significant mineral and coal projects in the advanced exploration and development stage including 14 proposed mining projects now in the Provincial environmental assessment process.

First Nations Funding — The Provincial Government provided $990,000 for First Nation Mining Initiatives, including First Nations business and educational opportunities, prospector training for First Nations and communities and funding to northeast First Nations for the appointment of a community coal co-ordinator to assist in the provision of information about the coal industry.

Geoscience BC — The Province provided a one time grant of $25 million to the British Columbia and Yukon Chamber of Mines to establish Geoscience BC. This program will provide the geoscience that identifies opportunities for new resource investments in British Columbia and ultimately, new mining and oil and gas projects.

Geoscience Partnership — The ministry supported an innovative geoscience program in partnership with industry and other levels of government which resulted in the publication of new geoscience information leading to increased claim staking and exploration activity.

Electricity and Alternative Energy

Alternative Energy Strategy and Alternative Energy and Power Technology Task Force — The Province released an Alternative Energy Strategy and announced the formation of an Alternative Energy and Power Technology Task Force to provide recommendations that will unleash the environmental, economic and job creation potential of the alternative energy and power technology industry in British Columbia. The Task Force will consult with stakeholders and interested parties to identify solutions to today's energy challenges and options that showcase British Columbia's leadership potential in world markets. According to a 2005 report prepared for the Premier's Technology Council, British Columbia's power technology sector already includes more than 60 companies providing 3,000 jobs and generating $700 million in annual revenues.

Solar Energy in Schools — The Province is bringing clean, affordable solar energy to schools in Fort Nelson and Vernon in the Solar for Schools pilot program, through $300,000 in Provincial funding.

Tidal Energy — The Lester B. Pearson College of the Pacific, Clean Current Power Systems and Encana Corporation are partnering to install and test a tidal energy demonstration turbine at Race Rocks. MEM provided a $189,500 grant to Pearson College to upgrade and expand infrastructure for environmental monitoring, telemetry and operational support of the project. Developing alternative energy resources and advanced energy technologies supports the British Columbia Energy Plan goal to reduce the environmental impact of energy production and use.

Alternative Energy — The Province is providing property tax relief for environmentally friendly hydro projects, and exploring similar exemptions for other alternative energy sources, such as wind and geothermal. Government is eliminating the PST for two years on a range of energy efficient furnaces, boilers and heat pumps. In addition, British Columbia is doubling the existing PST benefit for cleaner running hybrid passenger vehicles, those with both an electric motor and an internal combustion engine. Buyers will save up to $2,000 in PST or twice the tax savings possible today. In total, these tax measures represent savings to consumers and industry of $14 million over three years and an investment that will help to protect our environment, meet our growing energy needs and stimulate further economic diversification.

Fuel Cell Vehicles — Ford Motor Company, the Federal Government, Fuel Cells Canada and the Province have established a three year test program for five Ford Focus hybrid fuel cell vehicles to be used in Vancouver and Victoria. Vehicle users include the City of Vancouver, Ballard Power Systems, BC Transit, BC Hydro, Fuel Cells Canada, the Federal Government and the Province of British Columbia.

Hydrogen and Fuel Cell Strategy — The Province provided $2 million in funding to Fuel Cells Canada to begin implementing British Columbia's Hydrogen and Fuel Cell Strategy. Hydrogen and fuel cell development is driving new private sector investment in British Columbia, providing both jobs and technology for a healthier and more prosperous future.

The Energy Plan Update — In November 2004, MEM released a report card highlighting the progress of Energy For Our Future: A Plan For BC. The Report Card On Progress demonstrates significant achievements in four key areas of the Energy Plan, including: (1) Low electricity rates and public ownership of BC Hydro; (2) secure, reliable supply of electricity; (3) more private sector opportunities; and (4) environmental responsibility. The Energy Plan, released in November 2002, lays out plans to increase investment in the energy sector, maintain low-cost electricity and public ownership of BC Hydro and create jobs in an environmentally responsible and sustainable way.

Independent Power Projects — In 2004/05, six new independent power projects generating 460 GW.h per year began commercial operation: Pingston hydro expansion (38 GW.h), Weyerhaeuser wood residue (155 GW.h), Rutherford Creek hydro (172 GW.h), Furry Creek hydro (39.5 GW.h), McNair hydro (38 GW.H) and Marion hydro (17 GW.h).