UNBC COMMUNITY-COLLABORATIVE STUDIES ON BRITISH COLUMBIA OFFSHORE OIL AND GAS 5 UNDERSTANDING THE EFFECTS OF OFFSHORE OIL AND GAS ON QUEEN CHARLOTTE BASIN COMMUNITIES A project of the University of Northern British Columbia’s Northern Land Use Institute, Northern Coastal Information and Research Program 3333 University Way Prince George BC V2N 4Z9 www.unbc.ca/nlui February 2005 Funding for the Northern Coastal Information and Research Program was provided by the Ministry of Energy and Mines, Province of British Columbia. This financial support has enabled the publication of the UNBC Community-Collaborative Studies series, and has allowed communities in the Queen Charlotte Basin to be engaged in discussing the issues surrounding offshore oil and gas activities, and is gratefully acknowledged. UNBC COMMUNITY-COLLABORATIVE STUDIES ON BRITICH COLUMBIA OFFSHORE OIL AND GAS 5 UNDERSTANDING THE EFFECTS OF OFFSHORE OIL AND GAS ON QUEEN CHARLOTTE BASIN COMMUNITIES Prepared for: THE UNIVERSITY OF NORTHERN BRITISH COLUMBIA’S NORTHERN LAND USE INSTITUTE, NORTHERN COASTAL INFORMATION AND RESEARCH PROGRAM Prepared by: NORMAN DALE February 2005 Understanding the Effects of Offshore Oil and Gas on Queen Charlotte Basin Communities i TABLE OF CONTENTS PREFACE REGARDING AUTHORSHIP IV ACKNOWLEDGEMENTS V EXECUTIVE SUMMARY VI 1 INTRODUCTION 1 1.1 BACKGROUND 1 1.2 STRUCTURE OF THE REPORT 1 1.3 THE SCOPE OF WORK 2 1.3.1 Geographic Scope 2 1.3.2 Subject Scope 5 1.4 HISTORICAL BACKGROUND OF OFFSHORE OIL AND GAS IN BC 5 2 METHODS 10 2.1 OVERVIEW 10 2.2 GETTING STARTED 10 2.3 COMMUNITY FIELD TRIPS AND INTERVIEWS 11 2.4 ATLANTIC COAST STUDY TOUR 12 2.5 PRELIMINARY COMPILATION OF INFORMATION FROM INTERVIEWS AND TOUR 14 2.6 REPORTING BACK TO THE COMMUNITIES 14 2.7 DETAILED FINAL ANALYSIS 14 3 DOCUMENTED KNOWLEDGE OF COMMUNITY AND SOCIOECONOMIC IMPLICATIONS OF OFFSHORE HYDROCARBON DEVELOPMENT 16 3.1 OVERVIEW 16 3.2 STUDIES AND ASSESSMENTS FROM OTHER JURISDICTIONS 16 3.2.1 Canada’s Atlantic Coast 16 3.2.2 The North Sea 18 3.2.3 The United States Offshore 21 3.3 STUDIES AND ASSESSMENTS FROM WITHIN BRITISH COLUMBIA 25 3.3.1 West Coast Offshore Exploration Environmental Assessment Panel and Collateral Works 26 3.3.2 Canadian Ocean Frontiers Research Foundation’s Progress Report 27 3.3.3 AGRA Review of Offshore Development Technologies 27 3.3.4 SFU “Lessons from the Atlantic” 28 3.3.5 Maritime Awards Society’s “BC Offshore Hydrocarbon Development” 28 3.3.6 Jacques Whitford Environment Ltd.’s Update 28 3.3.7 Dale Marshall “Should BC Lift the Offshore Oil Moratorium?” 29 3.3.8 BC Scientific Review Panel 29 3.3.9 Vodden et al “Offshore Oil and Gas…Rural Development Perspective” 30 3.3.10 Campbell and Shrimpton on Potential Offshore Services 31 3.3.11 Coast Information Team’s Queen Charlotte /Hecate Basin Oil and Gas Potential 31 3.3.12 Herzog “Oil and Water Don’t Mix” 31 3.3.13 Schofield “Modelling the Economic Impacts of Offshore” 32 3.3.14 Royal Society Expert Panel Report 32 3.3.15 Federal Public Review Process 33 ii UNBC Community-Collaborative Studies on British Columbia Offshore Oil and Gas 3.3.16 Royal Roads BC Offshore Oil and Gas Socioeconomic Papers 33 3.3.17 SFU Offshore Oil and Gas Research Group Review 34 3.3.18 BC Innovation Council “Human Resources Development in BC’s Offshore Oil and Gas Industry” 35 3.3.19 UNBC/NWCC report on Education and Training Needs 35 3.4 RELATED RESEARCH 35 3.4.1 UVic/Memorial Universities’ “Coasts Under Stress” Project 35 3.4.2 UBC Fisheries Centre “Back to the Future” Project 36 3.4.3 Coast Information Team 36 3.4.4 Socioeconomic Reports for LRMPs 37 3.4.5 UBC Resilient Communities Project 37 3.4.6 The Gislason Reports 37 4 THE VIEW FROM THE COMMUNITIES 39 4.1 OVERVIEW 39 4.2 KEY QUESTIONS, ISSUES AND CONTENTIONS 40 4.2.1 What are the broad types of potential economic impact? 41 4.2.2 Will there be jobs? Here? Near? Or “there”? 41 4.2.3 Will there be demand for local goods and services? 42 4.2.4 Will it be just another “boom and bust” industry? 43 4.2.5 How will the benefits and risks be distributed geographically? 44 4.2.6 What are the effects on other marine-dependent activities? 45 4.2.7 What are the fiscal implications for communities? 49 4.2.8 Is it really worth it overall economically? 50 4.2.9 Who gets to use “our” hydrocarbons, and for what? 51 4.2.10 What changes in community culture and way of life can be expected? 54 4.2.11 Are we ready for an oil and gas industry? 56 4.2.12 What are the effects on regional development and/or dependency? 61 4.2.13 How does oil and gas affect our pursuit of alternative energies? 63 4.2.14 What about the more global issues surrounding oil and gas? 64 4.3 CONCLUSION 66 5 UNDERSTANDINGS AND UNCERTAINTIES: THE STATE OF KNOWLEDGE ABOUT COMMUNITY AND SOCIOECONOMIC IMPLICATIONS OF OIL AND GAS 67 5.1 OVERVIEW 67 5.2 THE LIFE-CYCLE OF THE OFFSHORE INDUSTRY 68 5.2.1 Pre-Exploration 68 5.2.2 Exploration 69 5.2.3 Development 69 5.2.4 Production 70 5.2.5 Decommissioning 70 5.3 KEY QUESTIONS, ISSUES AND CONTENTIONS CONSIDERED 71 5.3.1 What are the broad types of potential economic impact? 71 5.3.2 Will there be jobs? Here? Near? Or “there”? 72 5.3.3 Will there be demand for local goods and services? 74 5.3.4 Will it be just another “boom and bust” industry? 77 5.3.5 How will the benefits and risks be distributed geographically? 79 5.3.6 What are the effects on other marine-dependent activities? 82 5.3.7 What are the fiscal implications for coastal communities? 90 5.3.8 Is it really worth it overall economically? 94 5.3.9 Who uses “our” hydrocarbons, and for what? 98 Understanding the Effects of Offshore Oil and Gas on Queen Charlotte Basin Communities iii 5.3.10 What changes in community culture and way of life can be expected? 104 5.3.11 Are we ready for an oil and gas industry? 106 5.3.12 What are the effects on regional development and/or dependency? 116 5.3.13 How does oil and gas affect our pursuit of alternative energies? 119 5.3.14 What about the more global issues of oil and gas? 121 6 CONCLUSIONS AND NEXT STEPS 124 6.1 SUMMARY 124 6.2 NEXT STEPS 126 6.2.1 Actions that can be taken, principally by government and industry, to reduce uncertainties 126 6.2.2 Specific projects that can be undertaken to reduce uncertainties and clear up confusions 127 6.2.3 Long-term and in-depth community and socioeconomic analysis 127 6.2.4 Community-based public deliberation and dialogue 128 6.2.5 Community capacity-building 128 6.3 THE NEED FOR TIMELY DECISION-MAKING 129 6.4 CONCLUDING REMARKS 130 APPENDIX 1: COMMUNITY INTERVIEWS 132 APPENDIX 2: ATLANTIC COAST STUDY TOUR PARTICIPANTS 136 APPENDIX 3: ATLANTIC COAST STUDY TOUR – SUMMARY OF PRESENTATIONS 137 APPENDIX 4: COMMUNITY REPORT-BACK SESSIONS 143 Planning, Conduct and Format of the Sessions for the Report-Back Phase 143 Key Themes from the Sessions 144 BIBLIOGRAPHY 148 iv UNBC Community-Collaborative Studies on British Columbia Offshore Oil and Gas PREFACE REGARDING AUTHORSHIP The report before you was written by Norman Dale, the project manager for the Northern Coastal Information and Research Program (NCIRP), a program of the University of Northern British Columbia’s Northern Land Use Institute. It grew from a project formulated by NCIRP, titled A Review of the State of Knowledge And Current Initiatives Regarding Community And Socioeconomic Implications Of Potential Offshore Oil and Gas in the Queen Charlotte Basin. Following on a competitive request for proposals, a team of consultants was retained under the direction of Dr. Tom Pinfold of Gardner Pinfold Consulting Economists Ltd., in association with the Cornerstone Planning Group. They undertook a sequence of field interviews in the communities followed by a study tour to Atlantic Canada in October 2003. After compilation of the results from these steps, they then conducted a series of “report-back” sessions to communities. Based on those activities, the consultants submitted a draft report to UNBC in April 2004, and a revised version in June 2004. The resulting second draft was one of several inputs used in the preparation of the present document, as were the consultants’ general interview notes and video records of the Atlantic Coast Tour. As well, limited direct use of text from the draft by Gardner Pinfold and Cornerstone was incorporated in the present work; these sections are identified using footnotes at the beginning of any such passage. However, no summations, inferences, interpretations or recommendations within the current document are to be construed as those of Gardner Pinfold and/or Cornerstone Planning, nor are they to be so attributed .1 This study should be cited as: Dale, Norman. 2005. A Review of the Potential Implications of an Offshore Oil and Gas Industry on Coastal Communities. UNBC Community Collaborative Studies on British Columbia Offshore Oil and Gas #5. 1 Any use of the word “we” in this report is the authorial plural and does not signify support of or agreement with the observations and conclusions by others, including of Gardner Pinfold Consulting Economists Ltd.