It’s not just about potatoes anymore.

While potatoes and lobsters usually come to mind when thinking of onshore and offshore activities in Prince Edward Island, the premier of Canada’s smallest province hopes that will change.

“We expect that we will be part of the oil and gas industry eventually, so our economy can continue to turn around as well,” Patrick Binns told a Calgary Chamber of Commerce luncheon last week. “Hibernia and Sable Island (in Newfoundland) are today producing, and that could give us some of the same economic advantage.”

As it stands, hydrocarbons play virtually no role in P.E.I.’s economy. To date, there is no production, nor is there an estimate on potential reserves. Explorers and producers have yet to drill a commercially successful well, either onshore or offshore.

P.E.I. Premier Patrick Binns is confident his province is primed for a drilling bonanza.

Nineteen wells have been drilled on and around P.E.I. since 1944. So far, only one – H.B.-Fina East Point E-49, drilled in 1970 by Hudson’s Bay Oil and Gas – has shown promise. That offshore hole tested at 5.5 million cubic feet (mmcf) per day of natural gas, but was never completed.

Nevertheless, Binns remains confident that someone will hit the jackpot before too long.

Some Calgary energy companies are already rolling the dice on the Island.

PetroWorth Resources Inc. spent approximately $4.5 million gathering seismic data in 2003 and 2004. The company said it plans to sink up to five wells in 2005. Rally Energy Corp. now holds working interests of 92 per cent in three permits covering 373,917 acres.

Meanwhile, Corridor Resources Inc., a Halifax-based energy company, recently picked up a couple of licences covering the Green Gables prospect near Cavendish.

“What we’ve had so far is basically junior companies doing the exploration without a lot of money behind them,” Binns said. “The bigger money has probably been attracted to Sable Island where there are huge known quantities, but I believe it will just be matter of time before we have gas finds that are commercial and we’re producing.”

While Binns had no meetings on his agenda during last week’s swing through Alberta, he said his government regularly chats with senior explorers and producers in an attempt to lure them to the province. To catch the attention of the big players, P.E.I. leases are awarded for 10 years so “the companies can get in and do their exploration without somebody coming in and stealing rights away,” he noted.

Last month, the provincial government issued a call for bids for exploration rights on three parcels of land in the Island’s eastern Kings County, totalling approximately 19,000 hectares, and a property in the central area of the province encompassing 55,536 hectares. Together with permits issued this summer – covering more than 230,000 hectares between Summerside and Charlottetown – the total land under exploration permits is more than 400,000 hectares.

“Many people probably don’t realize it, but that means there’s now hundreds of thousands of dollars of exploration work carried out in P.E.I. each year,” for a value of around $3 million, Jamie Ballem, provincial minister of environment, energy and forestry, said in a news release.

In his Calgary speech, Binns also made a pitch for continued equalization payments from the have to the have-not provinces – a tough sell in affluent Alberta.

He pointed out that P.E.I., Nova Scotia and New Brunswick all enjoyed strong economies prior to Confederation. Shortly thereafter, policies enacted by Canada’s first government helped to weaken the Maritimes and they have never really recovered, he said.

He also noted that prior to the oil strike at Leduc in1947, Alberta was a recipient of transfer payments.

The island province has had a tough go of it in recent years. Potato wart disease wiped out 110,000 acres of potatoes in 2002 – affecting most of the P.E.I. economy – while the 2003 SARS scare helped keep the tourists away.

Still, there is optimism. The jobless rate has fallen to around 10 per cent from 20 per cent in the past two decades. About 120 hi-tech firms call the red-soiled island home, making the sector the third-largest industry after potato farming and fisheries.

The Confederation Bridge linking the island with the rest of Canada has “levelled the playing field” with respect to transportation, which makes P.E.I. more competitive with its neighbours.

P.E.I. is also banking on growing its renewable energy sector. The province hopes to meet all of its base demand from windpower within 10 years.

According to the Prince Edward Island Energy Framework and Renewable Energy Strategy released this June, wind energy currently supplies around five per cent of Islanders’ electricity, displacing 30,000 metric tons of greenhouse gases and other harmful pollutants each year. Still, nearly all the province’s power comes from New Brunswick and Nova Scotia via underwater cables.

“We look forward to the day when we’ll be exporting power through wind developments, and potentially oil and (natural gas).”

(John Ludwick can be reached at ludwick@businessedge.ca)