British Columbia Offshore Oil & Gas Admiralty Law.com G. Darren Williams - 2001 Background courtesy of Peter Hannigan & Geological Survey Canada.

British Columbia Offshore British Columbia Offshore Oil & GasOil & Gas

Admiralty Law.comG. Darren Williams - 2001

Background courtesy of Peter Hannigan & Geological Survey Canada

SEDCO-135F This triangular configuration semi-submersible drilling rig was built in Victoria in 1965-67 by Victoria Machinery Depot Co. Ltd. At the time the largest semi-submersible in the world, this sixth in the SEDCO 135 series completed 14 wells on the BC coast between 1967 and 1969 and

went on to work in Australia, the North Sea, and later South America. - photo courtesy of Victoria Machinery Depot Co. Ltd.

British Columbia’s First British Columbia’s First Offshore Oil RigOffshore Oil Rig

BC’s OFFSHORE HYDROCARBON BASINSBC’s OFFSHORE HYDROCARBON BASINS

GEORGIA BASINnatural gas 6.5 tcf

WINONA & TOFINO BASIN

natural gas 9.4 tcf

QUEENCHARLOTTE

BASIN natural gas 25.9

tcf Oil 9.8 bb

(2.6 bb recoverable)

Diagram courtesy of Peter Hannigan & Geological Survey Canada

ATLANTIC CANADA’S OFFSHORE BASINSATLANTIC CANADA’S OFFSHORE BASINS

NEWFOUNDLAND

Hibernia, White Rose Hebron:1.22 bbo recoverable

(350 km offshore)

NOVA SCOTIASable Island

Cohasset 45 mbo & 3 tcf

recoverable

(250 km offshore)

Diagram courtesy of Terra Nova Project

Sources of Law Governing BC’s OffshoreSources of Law Governing BC’s Offshore

• International Convention

• Canadian Federal Law

• Provincial Law

• Common Law

• Maritime Law

An important distinction lies in the difference between a government’s

right to legislate in an area (jurisdiction) and the government’s

right to utilize a resource (property right).

“Ocean Bounty” in Nanoose Bay, BC

Photo courtesy of Archie Kay

INTERNATIONAL LAW & CONVENTIONINTERNATIONAL LAW & CONVENTIONUNITED NATIONS CONVENTION ON THE LAW OF THE SEA 1982, “UNCLOS III”

This Convention was ratified by Canada in 1985, and its terms are mirrored by Canada’s Oceans Act, 1997.

Important Points of UNCLOS :

- recognized that a “State” (the federal government) has property rights and jurisdiction over its

territorial sea and seabed, this being 12 nautical miles offshore from the “baseline”.

- the “baseline” is a line drawn along the coastal low water mark, and across indents in the coast, but not

departing appreciably from the direction of the coast. Waters inside this are “inland waters”.

- established the “Exclusive Economic Zone” - giving the State sovereignty over living and non-living natural resources from the baseline to 200

nautical miles out.

Federal Jurisdiction over the OffshoreFederal Jurisdiction over the Offshore

Under international law (UNCLOS III) and the Oceans Act, the Federal government has the following rights over the following areas:

Territorial sea (out to 12nm) - absolute ownership of the seabed and its contents, and jurisdiction to legislate over these areas.

Exclusive Economic Zone (out to 200 nm)- sovereignty (control but not ownership) over living and non-living resources

Continental Shelf (beyond 200 nm and out to 200 metre isobath) - sovereignty over non-living resources only. This power is of no particular concern on the West Coast because of the width of the continental shelf.The Oceans Act has been drafted to allow for the application of Provincial law to areas outside of the Province (the seabed seaward of the baseline), including the territorial sea and the continental shelf, but Federal regulations are necessary to implement such Provincial law, and none have been enacted.

Provincial Jurisdiction over the Offshore

Provincial jurisdiction is limited to areas within the boundaries of the Province. As well, Provincial legislation cannot impinge on the Federal government’s jurisdiction over navigation and shipping or fisheries, as established by the Constitution Act 1867. These factors constrain the Province’s jurisdiction over the offshore.

The boundaries of British Columbia with respect to the offshore have been partially confirmed by the Supreme Court Court of Canada and the common law. These boundaries were originally determined by an 1866 Act of British Parliament, that set the western most boundary as the “Pacific Ocean”. Although vague, this definition of the boundary may work in favour of the Province.

COMMON LAW GOVERNING OFFSHORECOMMON LAW GOVERNING OFFSHORE

EAST COAST

• 1984 - Hibernia Reference - the court found that the offshore minerals belonged to the Federal government as Newfoundland has acceded the right to them when the joined confederation in 1949 without explicitly maintaining jurisdiction over them.

The Supreme Court of Canada has been asked on several occasions to decide the issue of which level of government has jurisdiction and property rights over offshore resources.

WEST COAST1967 - Offshore Mineral Rights Reference - court held unanimously that the minerals in the seabed of the territorial sea and the continental shelf rested absolutely and exclusively with the Federal government.

1986 - Georgia Strait Reference - by a decision of 4 to 1 the court found that the minerals and the seabed of Georgia Strait, Juan de Fuca Strait, Johnstone Strait and the Queen Charlotte Strait belonged to the province, as they had in 1866 when the British Parliament passed an act giving this land to the colony of British Columbia, and as it did when BC joined Confederation in 1871.

Provincial Property in the Coastal SeabedProvincial Property in the Coastal Seabed

The 1984 Supreme Court of Canada decision determined that the seabed of Queen Charlotte

Strait, Johnstone Strait, Georgia Strait and Juan de Fuca Strait

belonged to Province of British Columbia. The Province therefore has common law property rights in

the seabed and its resources.

Notably, the area owned by the Province includes the seabed above

the Georgia Basin, as well as south-eastern portions of the

Tofino Basin, both of which are natural gas reserves.

Diagram courtesy of BC Ministry of Energy & Mines

Diagram courtesy of Peter Hannigan and Geological Survey Canada

Queen Charlotte Basin(2.6 bbo recoverable)

The Queen Charlotte Basin lays beneath the seabed of Hecate Strait and Queen Charlotte Sound. These

straits were not included in the Supreme Court’s 1984 Ruling on

Provincial property rights.

It is not clear whether Hecate Strait is part of the Territorial Sea or whether Hecate Strait is within the boundaries

of the Province. Therefore, it is unclear whether the Province fails, as some assume, to have property rights

(or jurisdiction) in the Queen Charlotte Basin.

Federal/Provincial Property in the Coastal SeabedFederal/Provincial Property in the Coastal Seabed

Current Regulatory Regime - BC Offshore

• There is currently no regulatory regime in place in British Columbia for an offshore oil and gas industry

• The current state of the offshore is characterized by a series of Federal and Provincial Moratoriums, including:

- Federal moratoriums on tanker traffic in Hecate Strait and exploratory drilling in same.

- Provincial moratoriums on exploration and development in the inland marine zone, as well as the areas between Vancouver Island and the mainland.

• The Provincial government’s Oil and Gas Commission has no mandate, and perhaps no jurisdiction over Hecate Strait.

• The Federal and Provincial government share a joint mandate over environmental matters.

SUMMARY OF OFFSHORE JURISDICTIONS

GEORGIA BASINProvincial jurisdiction, as

laying within the area delineated by the 1984

SCC decision Re Georgia Straight

WINONA & TOFINO BASINclearly Federal jurisdiction

QUEEN CHARLOTTE BASIN jurisdiction and

ownership of the seabed is uncertain. Options for

resolving this uncertainty include a Hecate Strait Reference, or perhaps more likely, a Pacific

Accord.

Diagram courtesy of Peter Hannigan & Geological Survey Canada

Photo courtesy of Victoria Machinery Depot Co. Ltd.

The SEDCO 135F under construction in Victoria in 1966

The End

AdmiraltyLaw.comG. Darren Williams - Giaschi & Margolis

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