Drill, Baby, Drill! Standing Up for Oil Development Offshore

Brianna Heinrichs, Canada, Commentary, Energy, Henry Lyatsky, Uncategorized

Offshore oil exploration has been banned in British Columbia since the early 1970s.  To this day, despite talk of making Canada an “energy superpower”, the federal government and provincial government have failed to lift the moratorium, treating the issue as a hot potato.

In the absence of a sustained effort by the oil industry to engage and encourage the BC public, polls at various times have shown that the public perception of the benefits of oil development in BC fluctuates. Anti-oil lobby groups have been persistent in their vilification of the practice without sufficient reasoning.

British Columbians and their government need to know that opening Canada’s Pacific waters to development would benefit them enormously, as it has in other regions.

A decade ago Newfoundland and Labrador was a “have-not” province.  It no longer qualifies for equalization payments thanks largely to offshore oil development, with daily oil production in the hundreds of thousands of barrels.  The Canadian Association of Petroleum Producers reports that offshore oil production paid an estimated $2.0 billion to the province in the 2012/2013 fiscal year, with 30 percent of total provincial revenues coming from oil royalties in 2011/2012.

Success stories like this should be proudly trumpeted by the oil industry if it wants more offshore regions to be opened for exploration.

Due to offshore oil, Norway has escaped many economic and social pressures that have caused a deep revision of the once-iconic “Swedish model” next door.  Norway is an enviable place to live, with over half a trillion dollars in a sovereign-wealth fund from the North Sea oil.

Scotland’s nationalists partly base their quest for independence, perhaps unwisely short-termist, on a desire to keep more of the North Sea oil revenues.  Israel’s offshore gas bonanza is widely expected to improve that country’s energy security and living standards.  If the national and regional political and security impediments can be resolved, Lebanon, Cyprus and Gaza likewise stand to benefit, and east Mediterranean gas could help reduce Europe’s uncomfortable energy dependence on Russia.  The list goes on, with Angola and Brazil becoming economically better off as a result of offshore oil discoveries.

Canada is fortunate to have oil and gas in all three of its oceans.  North of Labrador, offshore oil exploration is attracting new investment along the west coast of Greenland, which raises exploration interest in the adjoining Canadian waters east of the Arctic islands.

The Beaufort Sea on the west side of the Arctic islands is also still underexplored, but has experienced drilling.

A short drilling season in a cold climate complicates development in the Arctic, because a relief well may need to be drilled quickly in case of an oil spill.  Moreover, cold water, unlike the warm water in southern seas, might not permit easy dissipation of spilled oil.

Offshore BC, geological studies indicate considerable petroleum potential exists between the Queen Charlotte Islands, Vancouver Island, and the mainland.  Some of these studies suggest the conventional reserve estimate of 10 billion barrels is conservative.

British Columbians need to understand the environmental context and risks of offshore development in their province.  In BC’s offshore region there is not the pack ice or icebergs that complicate offshore operations elsewhere in Canada.

A number of Canadian and U.S. scientific studies, published over the last two decades in various research journals and book titles, suggest the risk from great earthquakes, while obviously appreciable, may be exaggerated.

Oil operations offshore are steadily becoming safer.  The 2010 Gulf of Mexico spill occurred in deep water, where the technologies and practices are relatively complex and recent.  This caveat does not apply in the shallow BC waters.

Shallow-water oil production relies on well-established and traditional technologies, and modern double-hulled tankers are much sturdier than older designs.  Loading oil from an offshore platform directly onto a tanker, without landing it onshore, is a common and safe practice.

Offshore and onshore oil development creates wealth and jobs, and it fills the government coffers to provide services Canadians use.  Oil gives us the fuel and plastics on which we all depend.

Sadly, a continuing government moratorium in BC on offshore exploration is depriving the people there of many opportunities.

Oil companies must explain the environmental factors and tangible benefits involved to British Columbians and all Canadians if they want them to rally behind offshore oil development.