Deep under the waters separating the Queen Charlotte Islands from B.C.'s mainland lie an estimated 9.8 billion barrels of crude oil and 25 trillion cubic feet of natural gas. Translated into hard cash, this buried treasure could amount to $21 billion in provincial royalties alone over the life of the project. And that's not even counting revenue from sales, personal and corporate taxes. The bonanza rests untouched, however, because of provincial and federal moratoriums on gas and oil exploration and drilling.

There is now new talk of lifting the moratoriums, but along with that talk comes concerns about the environmental costs that might have to be paid. In fact, the controversy that is beginning to swirl around the quest for the deposit has a familiar ring to it. On one side are the wealth creators and job-makers; on the other, the preservationists and nature-lovers. Each is currently marshalling its forces in what is expected to be one of the biggest development battles of the upcoming decade.

The growing public-relations war is not without its irony. The provincial NDP government, which is among the groups indicating it wants the moratorium lifted, will be in the position of having to persuade the public to ignore much of the anti-development green rhetoric it espoused earlier this decade.

The stakes are high. Lifting the moratorium could bring an infusion of investment to Prince Rupert and depressed coastal communities in the Queen Charlotte Islands. For Prince Rupert, offshore drilling holds the prospect of a dream fulfilled. Touted as the western terminus of the Grand Trunk Pacific Railway and a rival of Vancouver as Canada's gateway to the Pacific in the early 1900s, the city never realized its potential. For many, the seemingly constant blanket of dark clouds that hangs over the north coast city epitomizes its dismal economic performance.

Instead of developing into a transportation hub, Prince Rupert turned to fishing and forestry for its livelihood. But this was relatively short-lived. In the last few years, new forestry regulations have resulted in mass unemployment. One of the city's big employers, the Skeena Cellulose pulp mill, teetered on the verge of bankruptcy, only to be salvaged by the NDP. The fishery also took a hit with the depletion of salmon stocks and federal catch restrictions.

The prospect of rebuilding the economy through an oil and gas drilling industry is one that looks attractive to North Coasters. For now, though, it remains a carrot just out of their reach. Bill Belsey, a director of the North Coast Oil and Gas Task Force, knows all too well how badly the Prince Rupert area needs an economic lift. He is one of seven businessmen interested in pursuing off-shore oil and gas exploration with hopes of making the community the thriving northern centre of their dreams.

Indeed, lifting the moratorium could mean hope and long-term stability, says Mr. Belsey, who has lived in Prince Rupert for 20 years. He remembers when the pulp mill was in full operation, five canneries employed thousands of workers and people from Alberta and other parts of B.C. were moving north. Now, at least 400 homes are on the market, the population hovers at 17,000 (compared to 20,000 five years ago) and more families are moving out. One result: local schools have reported a loss of 300 students.

Mr. Belsey maintains that, along with the sorrowful state of the fishing and forest industries, tourism is suffering as well—a development not helped by the 1997 salmon-war blockade of an Alaskan ferry. "You don't have to be a rocket scientist to realize something is really wrong here," Mr. Belsey declares. "[Oil exploration] will bring jobs back and bring oil revenues to the province—we have to do something."

The Hecate Strait and Dixon Entrance have been off limits to exploration for almost three decades. In 1972, Ottawa imposed a moratorium blocking tanker traffic between the Queen Charlottes and the B.C. mainland and later prohibited drilling. In 1981 the province placed its own moratorium on oil exploration in the Johnstone Strait, the Strait of Georgia and the Juan de Fuca Strait. Three years later, federal and provincial governments struck an environmental assessment panel to examine oil and gas drilling; in 1986 the group recommended lifting the moratorium as long as no fewer than 92 conditions, such as no drilling within 20 kilometres of shore, were met. After three more years of negotiations, the moratorium was about to be lifted when the Exxon Valdez crashed into a reef off the Alaskan coast, spilling 40 million litres of crude oil into the Pacific.

Four years ago, the Geological Survey of Canada released a report indicating the Queen Charlotte Basin "has significant petroleum potential, abundant reservoir strata, numerous oil and gas shows." A 1998 report indicates 9.8 billion barrels of oil reserves and 25 trillion cubic feet of gas are in the basin—about three times more than the reserves in the Hibernia oil field currently being drilled off Newfoundland (see story, page 38).

Lifting the moratorium is an idea that appeals to Deputy Premier Dan Miller, the province's minister of energy, mines and northern development. In March, Mr. Miller condemned a Vancouver Sun editorial that advocated keeping the ban in place. The paper linked oil drilling to the Exxon Valdez spill. "I must admit I was surprised by the Sun editorial which essentially said, 'Don't do it. Don't even look at it.' It's a bit puzzling because I think we ought to look at it, the question is how," Mr. Miller said.

That question was answered last month when Northern Development Commissioner John Backhouse contracted Conflict Managers Group to proceed with discussion surrounding the moratorium. "This certainly is a big issue here," Mr. Backhouse says. "When you look at the two sides you've got the economic situation and a great deal of interest in reviving the economy but there's also a great deal of concern about the environment. This issue is too big and too emotional to go into without the necessary background information."

Emotion is certainly high among preservationists, who insist the ban has to stay in place because it is too dangerous to mix oil and water. Jennifer Lash, spokesman of the recently formed B.C. Alliance for the Preservation of the Offshore Oil and Gas Moratorium, says at least 40 environmental groups oppose lifting the ban. Ms. Lash, who equates drilling with spilling, says seabirds, fish and shellfish will be threatened if drilling and exploration resume. Ms. Lash points out that, throughout the world, 351 oil spills were attributed to exploratory drilling and tankers in 1997.

"The health of our coastal communities and the health of our oceans will be in jeopardy if we start drilling for oil," insists Ms. Lash, who is based on Sointula, an island off the coast of northern Vancouver Island. "Developing this industry would be a slap in the face to fishermen, community groups, tourism companies and conservation organizations that are working so hard to conserve our ocean and our fisheries."

Her concerns involve the economy too. She refutes claims the resumption of drilling will create B.C. jobs and says proponents' job expectations are unrealistic given the highly skilled nature of drilling and exploration. Ms. Lash also says the provincial government should be looking at power sources other than fossil fuels, such as solar or wind. And anyway, even if the moratorium is lifted, it will be at least 50 years before drilling can take place—after extensive exploration and government permits—and by then fossil fuels will no longer be the main sources of power, she insists.

Exploration proponents say if the moratorium is lifted, exploration and drilling will be subject to environmental regulations that are the toughest in the world. Richard Neufeld, B.C. Liberal northern development critic, says his party supports a public process investigating the lifting of the moratorium because offshore oil and gas drilling will bring economic salvation to the northwest. The Hibernia rig, for example, has been credited with lifting Newfoundland's economy from its cod-deprived deathbed.

As for the Exxon Valdez factor, the MLA says it is illogical to compare a tanker guided by a drunk captain to a stationary rig adhering to stringent rules. "People, I think, really support this," declares Mr. Neufeld. "What we have to do is look at the success that has taken place since [the Exxon Valdez disaster]."

Mr. Neufeld also believes job opportunities will be plentiful, and points to the fact that there is much evidence of employment crossover between forestry and oil-well drilling in the North. Dave McGuigan, chairman of the North Coast Oil and Gas Task Force, adds that employment would not be confined to rigs—a new oil and gas supply will act as a catalyst to other industries, such as iron production, liquified natural gas production and gas-fired electrical generation.

The task force's proposal also allows for the creation of a people's trust, in which 5% of government royalties from drilling would be put towards silviculture programs, stream enhancements, infrastructure programs, sewage plants and other employment-enhancing opportunities. "We are going through a huge transition here. When the dust clears down the road we are going to see major American forest companies controlling the forest industry," asserts Mr. McGuigan in reference to Weyerhaeuser's recent takeover of MacMillan Bloedel (see story, page 40). "We have to find something else. We have to diversify and if we have this resource we should use it."

If a lifting of the moratoriums is recommended by the consultants (whose report is expected this fall), public consultation will ensue, and then the provincial and federal governments will have to negotiate. Ottawa owns the seabed; however, the feds have assured the task force that, if Victoria lifts its ban, Ottawa will lift its own as well. Petro-Canada and Shell Canada currently have exploration rights to the area and would most likely be involved in the process.

The bottom line, though, is job creation, according to Ronald MacVeigh. "The employment opportunities would be huge and would be nothing but a benefit to Rupert," Mr. MacVeigh told the Prince Rupert Daily News. He worked on oil rigs in the North Sea and the Indian Ocean and has seen the economic benefits to nearby communities firsthand. In Aberdeen, Scotland, for example, jobs sprung up "like wildfire" and hotels and restaurants were continually jammed.

Adds Mr. Belsey, "There's no reason in the world we won't be creating jobs here. That's a big bone of contention with environmentalists who say we can't do it. They're dreaming." BCR

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