Canada

DOWN BUT NOT OUT

HOPING TO REVIVE ITS FLAGGING ECONOMY, SOME RESIDENTS OF PRINCE RUPERT WANT TO END THE MORATORIUM ON OFFSHORE DRILLING

KEN MACQUEEN July 9 2001
Canada

DOWN BUT NOT OUT

HOPING TO REVIVE ITS FLAGGING ECONOMY, SOME RESIDENTS OF PRINCE RUPERT WANT TO END THE MORATORIUM ON OFFSHORE DRILLING

KEN MACQUEEN July 9 2001

DOWN BUT NOT OUT

Canada

HOPING TO REVIVE ITS FLAGGING ECONOMY, SOME RESIDENTS OF PRINCE RUPERT WANT TO END THE MORATORIUM ON OFFSHORE DRILLING

KEN MACQUEEN

in Prince Rupert

In the Pacific Mariners’ Memorial Park, near the Museum of Northern British Columbia in Prince Rupert, stands a low yellow brick wall. It was built in sorrow. Inset on individual red clay tablets are the names of more than 100 mariners who have died on the Pacific Ocean after leaving the shelter of this deepwater port, tucked below the Alaskan Panhandle. Most were fishermen, a few crewed freighters, or they flew floatplanes.

It’s instructive to spend a few moments with the dead. A debate rages over a new sustaining dream for the battered economy of the province’s north coast. Buried under the seabed off the Queen Charlotte Islands, a few hours sail from Prince Rupert, may be the richest untapped oil deposit on the West Coast of Canada. Critics of ofishore drilling say the prospect of untold riches has blinded many in this hardhit region to the potential cost of punching holes in the ocean floor. The memorial wall says otherwise. To live there is to know there is a price paid for everything taken from the ocean. It is a calculated risk, whether the reason is fish or freight or oil.

Even in Prince Rupert there is not universal agreement about the wisdom of building gas wells and oil rigs on the turbulent, towering seas of Hecate Strait. There is, however, a growing consensus that the provincial government of Gordon Campbell is unlikely to ignore: if offshore drilling is a calculated risk, it is time to start calculating.

It’s 6:30 a.m. and Alexander Hickey— once upon a time of St. Mary’s Bay, Nfld.—stands contentedly on the wharf I of the J. S. McMillan Fisheries plant in Prince Rupert, savouring a Tim Hortons coffee after 5 V2 days spent chasing red snapper off British Columbia’s central coast. The weather was grand, the fish cooperative. Plant workers are readying a gi-

ant hose to vacuum almost four tonnes of catch from the holds of the 21-m dragger Kawadi. It will be sorted, filleted and shipped fresh to U.S. markets.

On a morning like this—contemplating a crewman’s cut of the catch—life’s as good as it gets. The Pacific has proved a godsend for Hickey, who turned his back on Newfoundland in 1993 after the collapse of the cod fishery. “I can make more in two months here than I can make there in 12,” says Hickey, his face creased and weathered by 27 years of fishing.

His contentment is a rare enough thing in Prince Rupert, a saltwater city riding out the economic equivalent of a perfect storm. It is pounded from all sides: by a devastated salmon fishery, by a failing forest sector, by plummeting trade in the raw materials and resources that flow through its port. Hickey says ofishore oil would help the local economy as much as Flibernia has assisted Newfoundland. “It would boost this town, that’s for sure,” he says. “I’ve never bothered with it myself, but I’ve two sons into the oil.” One is a driller and the other a supervisor on rigs in Alberta. “Of course,” he concedes. “No one wants to see a spill.” The anticipated undersea hydrocarbon reserves may not even be recoverable. Fourteen exploration wells were drilled with inconclusive results in the late 1960s. A moratorium by the B.C. government stopped further exploration because of a still-unresolved dispute with the federal government over jurisdiction of the resource. The federal government imposed its own moratorium in 1972 because of environmental concerns. Those bans were under review in the late 1980s after extensive public consultation. But the political will to lift them vanished when more than 250,000 barrels of crude oil bled from the tanker Exxon Valdez into Alaska’s Prince William Sound in March, 1989.

The lobby began anew four years ago when a Prince Rupert-based group, the North Coast Oil and Gas Task Force, sought to revitalize the regions failing economy. It gained momentum in May with the election of Campbells Liberals, a business-friendly government on the hunt for new revenue. “If this can be done in an environmentally sound and sensible way, certainly I would consider it,” Campbell said, even before his swearing in last month.

Notably, Bill Belsey, the vice-chairman of the oil and gas task force and a onetime metallurgist and diver on offshore rigs, is the newly minted Liberal MLA for the region. He says he’s pleased the Liberals have started on “this cautious path” to reviewing the issue. A report to be delivered this week to the government by the provincial northern development commissioner, John Backhouse, is widely expected to recommend a broad-based series of public hearings in dozens of communities where drilling may have an impact on the environment and the economy. The stakes are huge. “It’s the potential for an awful lot of money,” says Belsey. “There are governments all over the world that would like to generate the kinds of revenues that are predicted.”

In 1998, the Geological Survey of Canada estimated the potential resources

at 9.8 billion barrels of oil and 25 trillion cubic feet of gas—a basin about three times the size of Hibernia. A report this spring by the Maritime Awards Society of Canada, an oceanographic thinktank, says the total direct and indirect wealth generated by exploiting such a find could be about $750 billion— though it doesn’t underestimate the political or environmental risk. British Columbia’s share of revenues, spread over 30 years, could be $4.5 billion annually, the society estimates, with billions more in indirect benefits.

On a gusting wet afternoon, Don Krusel, president and CEO of the Prince Rupert Port Authority, stands on the empty asphalt expanse of Fairview Terminal. He was an early and outspoken advocate of lifting the moratorium, and he doesn’t have to say much to make his case. In good times, heavy lift trucks race down the long canyons between mountains of lumber awaiting shipment south or to Asian markets. Today, a local hardware store would stock more lumber than the pile sitting on the terminal’s sprawling 21.5-hectare deck.

The nearby coal facility has also seen a precipitous plunge in shipments after weak Asian demand closed the open-pit Quin-

tette mine in the B.C. Interior. “It’s been terribly discouraging,” concedes Krusel, who is nevertheless pushing ahead with plans to capture a share of the lucrative Alaskan cruise industry. As for freight, the total tonnage handled by the port has fallen by about half since 1998. Offshore energy development, Krusel says, would mean industrial spinoffs far beyond servicing a few rigs. Steel mills, liquefied gas plants and petrochemical facilities could all be drawn to the region by a hydrocarbon strike. “I have a very strong belief we’re sitting on a diamond in the rough,” he says.

In the meantime, Prince Ruperts population has fallen to an estimated 14,500— a drop of 2,700 in three years. Resources are stretched thin to cope with the resulting abuse, poverty and dysfunction. In April alone, five people committed suicide, two of them under the age of 19. “The social fabric of our community is hard hit,” says Dave McGuigan, business consultant and founding chairman of the oil and gas task force. “This time of year, when the fishing season opens, you would see hundreds and hundreds of boats in the harbour. You don’t see that anymore. You don’t see the bodies downtown that you used to.”

Like many here, McGuigan fears the debate may be hijacked by “Lower Mainland cappuccino-drinking Hollywood environmentalists” and southern B.C. sensibilities. “They’re great at coming out with objections to development in certain areas, but they never seem to come out with an alternative,” he says. “You take resource extraction—they might fly up in a jet and burn 10,000 lb. of fuel to get here, to tell you to use wind power. You’ve never seen them sailing up in a sailboat.”

Not all detractors are from the south. Among those mobilizing to keep the moratorium is the Living Oceans Society, based in Sointula, a fishing village and former utopian commune off the north end of Vancouver Island. “Why do we have to look at this being a panacea?” asks executive director Jennifer Lash, who also speaks for an alliance of about 60 other conservation, labour and aboriginal groups opposed to offshore development. “If there is an oil spill, we’re going to jeopardize fishing. We’re going to jeopardize tourism. We can’t put those other industries at risk.”

In the soft evening light, John Helin of the Tshimshian community of Lax Kw’alaams, about 35 km north of Prince Rupert, readies his gillnetter Freedom Rider. Helin has fished in the region for most of his 46 years; this season began dismally in mid-June with the announcement of a 25-per-cent cut in the allowable catch for Skeena River sockeye. Unemployment in his village is as high as 90 per cent, he says, and the fixture of the fishery

is increasingly tenuous. Yet he is skeptical that offshore drilling is the answer.

He has many reservations—the unresolved state of aboriginal land and sea claims, and the risk of an earthquake or severe storm causing a rig disaster and spill in the Hecate Strait fishing grounds. “It gets real miserable,” he says of the strait’s notorious seas. “It comes up fast. It’s shallow water, so when it starts blowing it gets real bad.” Years of watching the profits of fishing and timber flow south also make him skeptical that communities like his would benefit from the development.

His concerns are shared by Guujaaw, president of the neighbouring Haida Nation of the Queen Charlotte Islands. Guujaaw, whose single name means “drum,” says much of the Charlottes are ringed by offshore exploration leases that impinge on areas claimed by the Haida as their territorial sea. As for Campbell’s eagerness to review

the moratorium, Guujaaw snorts: “Yeah, well, it isn’t up to him. We can talk about anything, but our position right now is, let’s sort out the jurisdiction, let’s make sure the environmental issues are all taken care of.” The tangle of jurisdictional disputes has also kept one of the key holders of exploration rights from pushing for a moratorium review, let alone budgeting multimillions for a drilling program. “We need to see some movement from the governments,” says Lorelei Piotto, a Calgary-based spokeswoman for Chevron Canada Resources, which holds rights to 4.8 million hectares of seabed in the Hecate Strait. “We expect that would be a lengthy process.”

Yet the people on the north coast sense a sea change in political attitudes. Campbell has started the debate provincially. And Prime Minister Jean Chrétien has shown enthusiasm for supersizing Canadian exports to meet the energy demands of George W. Bush’s thirsty U.S. administration. Should, one day, the glorious estimates prove accurate, offshore drilling would become the province’s secondlargest industry, after tourism. Whether the two can coexist is one of the calculated risks. It is a debate, then, about British Columbia’s future. And it starts now. ES3

A TOWN’S CRUEL TRICKS OF FATE

To say that Prince Rupert was born under a cloud is both literally and metaphorically correct. The city clocks a daunting annual average of 6,123 overcast hours. “It is officially Canada’s cloudiest place,” says the Encyclopedia of British Columbia. Nor is it overly blessed with luck.

Consider the fate of city founder Charles Melville Hays, a man with grand vision and a terrible travel agent. Hays, the harddriving president of the Grand Trunk Pacific Railway, is both credited and blamed for pushing through Canada’s second

transcontinental railway. In 1904, he personally chose Tuck Inlet as the railway’s Pacific terminus, on the strength of its magnificent allseason harbour, about a day closer by ship to Asia than other West Coast ports. He pictured a city of 50,000, renamed Prince Rupert, rivalling the southern port of Vancouver.

Boston landscape architects designed a model community. Hays commissioned renowned architect Francis Rattenbury, creator of Victoria’s legislature buildings and its Empress Hotel, to build a grand hotel and passenger terminal. By 1910, a growing city of 5,000 prepared for the first transcontinental train and the promised “ships of the East,

laden with silk and rice.”

Hays sailed to England in search of investor funds, a voyage that went swimmingly but for his choice of return vessel-a liner named Titanic. The local newspaper published a “Titanic Extra!” on April 19,1912: “Twenty-three hundred and forty-eight lost.

Hays' name is among missing.” It is perhaps telling that the story was reported in The Daily News, a paper that had presciently changed its name from The Prince Rupert Optimist.

The railway was completed in 1914, but celebrations were preempted by the First World War.

By 1919, the Grand Trunk was bankrupt and merged into the Canadian National Railway Co.

Now, almost 90 years after Hays’ death, Prince Rupert’s population and economy are in decline. Yet many of the estimated 14,500 who remain cling to his vision that Prince Rupert is an Asian transportation hub and northern industrial giant waiting to happen. “I think it’s just been a lot of bad luck,” explains Mayor Don Scott, whose relatives were among the city’s founding merchants. Developing petroleum reserves offshore and attracting the Alaskan cruise trade are initiatives that have him “getting bullish” about the future. “There are so many things that say Prince Rupert is going to bust wide open at the seams.”

K.M.