1. Ministry of Energy, Mines and Petroleum Resources Page 1. Offshore Oil and Gas Update Native Economic Development Advisory Board January 17, 2006 Jean Dragushan Offshore Oil and Gas Division

2. Ministry of Energy, Mines and Petroleum Resources Page 2. BC’s Basins BC’s Offshore Basins

3. Ministry of Energy, Mines and Petroleum Resources Page 3. BC’s Offshore Oil and Gas - History 1960’s: Initial exploration 1980’s: Federal-Provincial Review 2001 Technology Review: “no unique fatal flaw issues that would rule out exploration and development activities” 2002 Scientific Panel: “no inherent or fundamental inadequacy of science or technology, properly applied in an appropriate regulatory framework, to justify retention of the BC Moratorium” 2003 BC Offshore Team Established

4. Ministry of Energy, Mines and Petroleum Resources Page 4. Offshore Oil and Gas - Arguments Against Potential negative environmental impacts Unresolved aboriginal rights/title Gaps in scientific knowledge Use alternative energy

5. Ministry of Energy, Mines and Petroleum Resources Page 5. Offshore Oil and Gas - Arguments For Future Supply and Demand - Forecasts show clear need for hydrocarbons + clean energy Global growth average 1.7% to 2030 Hydrocarbons remain primary energy Funding for Vital Services Jobs and Business Opportunities

6. Ministry of Energy, Mines and Petroleum Resources Page 6. Compelling Case: Economic Change Shift in resource base – Interior communities: effects of pine beetle – Coastal communities: need economic opportunity and social stability – forestry/fishing activity less reliable Opportune time for new resource to be developed At 2005 prices resource value of Queen Charlotte Basin alone is Can$225 billion

7. Ministry of Energy, Mines and Petroleum Resources Page 7. Federal Review of Moratorium on Queen Charlotte Basin Three Parts: Science Public Review First Nations Engagement

8. Ministry of Energy, Mines and Petroleum Resources Page 8. Federal Review Science Review “Provided an adequate regulatory regime is in place, there are no science gaps that need to be filled before lifting the moratorium” “The Present restriction on tanker traffic entering the coastal zone should be maintained”

9. Ministry of Energy, Mines and Petroleum Resources Page 9. Federal Review Public Review (Priddle Panel) – 4 Options for next steps First Nations Engagement – Concern about environmental impacts, interest in benefits

10. Ministry of Energy, Mines and Petroleum Resources Page 10. Approach to First Nations Meet obligations regarding First Nations rights and interests First Nations role in decision-making First Nations sharing in benefits Provide resources direct to communities to become informed

11. Ministry of Energy, Mines and Petroleum Resources Page 11. One Company’s Assessment Prospectively highly uncertain, technology exists, environmental must be addressed (appears doable) T echnical E conomic C ommercial O rganizational Political/societal Costs and economics uncertain Market outlook very favourable Industry capability exists, limited current capacity for West Coast Offshore Jurisdiction, fiscal, regulatory framework are undefined, meaningful First Nations engagement required…mixed stakeholder messages

12. Ministry of Energy, Mines and Petroleum Resources Page 12. The Future Federal Government Decision on Moratorium Provincial Approach Work with First Nations, coastal communities and stakeholders Refine Options for Management Regulatory Regime Engage federal government