British Columbia’s fast-growing oil and gas industry keeps setting records for activity and – unlike the Vancouver Canucks – appears unstoppable.

Since January 1, B.C.’s Oil and Gas Commission has approved 49 per cent more wellsite applications than it did during the same period last year. Pipeline approvals are up 43 per cent.

Drilling activity hit a new high in January-February, with an unprecedented 171 active rigs, compared with a peak of 137 last year.

The Petroleum Services Association of Canada (PSAC) predicts B.C. will have the greatest percentage increase in wells drilled this year of the Western Canadian provinces. PSAC forecasts B.C. will reach a record 1,300 wells drilled in 2004, a 27-per-cent increase over last year’s count of 1,024.

The rise in activity is partly due to B.C.’s aggressive summer-drilling program, says PSAC president Roger Soucy, adding that “we anticipate 2004 activity to remain strong over the summer months.”

Still, there’s a price to pay in every oil and gas boom. The cost of a new 2,000-sq.-ft. house in the remote Alaska Highway community of Fort Nelson, for example, is about $325,000 while even a modest 1,200-sq.-ft. home will set buyers back $220,000.

Gas fields around Fort Nelson provided about 25 per cent of the record $1.3 billion in natural gas royalty revenues that flowed into the B.C. treasury in 2003, according to a report.

Last year, the Campbell government announced a 10-per-cent royalty cut for companies that drill new wells between April and October – the traditionally slow drilling season. Fort Nelson is the hub for about half of the new summer drilling season activity.

Then there are the other kinds of prices paid in an oil and gas boom.

Four out of five oil and gas industry jobs in B.C. have been filled by Albertans instead of local residents, according to a report by a broad-based coalition of stakeholders pushing for sweeping reforms to B.C.’s oilpatch.

Some aboriginal communities complain that the frenzy of oil and gas exploration is carving up the land and interfering with their traditional hunting, fishing and trapping.

Environmental groups are worried about resource roads being punched into pristine wilderness areas.

But for an average rig-floor hand making $80,000 a year for 10 months’ work, the price is worth it.

Pipeline Plans Heat Up

Some B.C. communities will see even more oil and gas business if Terasen Inc. and Enbridge Inc.

follow through on plans to build new oil pipelines to the West Coast.

The two companies are in a race to see which one will build its pipeline first.

Vancouver-based Terasen is planning to build a pipeline to Vancouver called the TMX, along the same route as its existing Trans Mountain line in B.C. and Alberta, to deliver oilsands crude to customers in B.C. and Washington. The project is expected to cost about $1.5 billion.

Calgary-based Enbridge is proposing its $2.5-billion Gateway Pipeline, which would carry 400,000 barrels a day 1,200 kilometres across northern Alberta and B.C.

The company is offering to build its line to B.C. ports at either Prince Rupert or Kitimat, starting at either Edmonton or Fort McMurray.

Enbridge’s proposal appears to be the favoured option of some analysts, and to be farther along than Terasen’s plan.

Enbridge has started discussions with northern local governments and more than 120 aboriginal groups along the proposed Gateway route, and is working on engineering and environmental impact studies, according to a report.

No matter which company wins the race, communities in B.C. will take the checkered flag in terms of job creation and economic benefits.

Sumas Appeals

Round 2 has begun in B.C.’s battle over the proposed $400-million Sumas Energy 2 natural gas-fired power plant just across the Canada-U.S. border from Abbotsford.

Sumas Energy 2 Inc., which wants to build the plant, has filed a formal appeal with Canada’s Federal Court of Appeal over the project.

The American firm is appealing the National Energy Board’s (NEB) decision denying the company’s application to build the Canadian portion of an 8.5-kilometre international powerline to link the plant to the B.C. and U.S. Pacific Northwest electricity grids.

Sumas Energy officials argue that the NEB’s decision was based on public and political pressure, rather than on scientific, legal and market considerations.

The NEB in its decision said the negative effects of the project, which would emit 2.5 tonnes of pollutants a day into the Fraser Valley, outweighed the benefits to communities in Canada.

It could take months for the Federal Court of Appeal to decide whether it will hear the case.

Pogo Permit Has its Ups and Downs

Vancouver-headquartered Teck Cominco Ltd. is breathing a huge sigh of relief over its Pogo gold mine project near Fairbanks, Alaska.

The company has reached an 11th-hour agreement with the Northern Alaska Environmental Center, a Fairbanks-based environmental group that had challenged a key permit for the project.

The group last month appealed a U.S. Environmental Protection Agency (EPA) decision to grant a treated mine water-discharge permit to the Pogo project. The group wanted certain issues in the permit to be set out in detail.

The action forced Teck Cominco to suspend construction work at the mine in eastern Alaska, just as the company was preparing to pour concrete this spring for the mill complex. Teck Cominco was worried that the appeal could have delayed the project by up to a year.

But the Northern Alaska Environmental Center says it has agreed to withdraw its appeal, after Teck Cominco agreed to take measures to protect the Goodpaster River watershed in the Pogo mining area.

Teck Cominco says the deal, which included EPA officials, will allow it to immediately resume construction on the mine.