$400M TO SUPPORT COMMUNITIES, OIL AND GAS DEVELOPMENT

TAYLOR – Communities in northeast B.C. will continue to benefit from the growing oil and gas sector through improved infrastructure, year-round employment and new business opportunities as a result of four new programs and over $400 million in funding, Energy and Mines Minister Richard Neufeld announced today.

“Today I am pleased to launch the third phase of our Oil and Gas Development Strategy for the Heartlands,” said Neufeld. “Phase three will continue to build on the success of our earlier programs by enhancing infrastructure and expanding training to support industry and communities in the northeast. The strategy also increases the focus on communication with communities – ensuring that activity balances environmental, economic and community interests.”

These programs build on the success of previous initiatives that have encouraged increased capital investment, record drilling and a growing service sector. Phase three of the oil and gas strategy represents an investment of $34.4 million.

“I am also pleased to join the local governments of the region to celebrate their contributions to the industry and announce how we have partnered to ensure they have the resources needed to support a growing industry and growing communities,” said Neufeld.

Community and regional representatives joined Neufeld and Peace River South MLA Blair Lekstrom in Taylor to officially sign a Memorandum of Understanding (MOU). The MOU allows northeast communities to access new resources to improve the infrastructure that is so crucial to a healthy community and an active business sector.

The MOU provides revenues to communities in the region, beginning with $20 million in the first year of a 15-year commitment. Annual payments moving forward are indexed to changes in the rural industrial assessment base. This funding comes in addition to a one-time grant of $40 million, which is for a local infrastructure investment fund for communities in the Peace River Regional District ($35 million) and Fort Nelson ($5 million) to recognize the significant historical deficits in local infrastructure.

While these communities provide services to the oil and gas industry, their workers and families, the Peace River local governments cannot access the oil and gas industrial property tax base. The MOU helps address this unique situation by providing revenues in place of industrial taxes.

“The Memorandum of Understanding will help improve the quality of life for those who work and live in the region with enhanced infrastructure such as street lighting, roads and sidewalks,” said Murray Coell, Minister of Community, Aboriginal and Women’s Services. “It is a fair and equitable way to help the region’s communities address unique geographical and infrastructural challenges, while meeting the demands of new oil and gas development.”

Also announced today is additional funding for the Heartlands Oil and Gas Resource Roads Strategy, a five-year investment initiative in northeast B.C.’s public roads. The $32.5 million in year two funding announced today will greatly improve public roads and allow industry to operate in areas that might have been off limits due to seasonal road bans. This partnership with the Ministry of Transportation has already seen almost $18 million in new construction and planning for roads in the north and south Peace region in 2004/2005.

“The MOU is one of the most proactive and significant to be signed in the history of northeast B.C. communities,” said Lekstrom. “In addition, the new $32.5 million roads rehabilitation strategy continues a successful program that has already resulted in upgraded or new all-season roads, allowing industry to operate year-round and in previously inaccessible areas. This has led to increased activity in the sector and a stronger local economy creating more opportunities for those who live in our region.”

Also underway is a special $1.6 million program to support the environmental sustainability of the oil and gas industry through an orphan oil and gas site clean-up fund to permanently reclaim 12 historic wells that were developed and later abandoned upon bankruptcy of the companies that owned them.

The success of the oil and gas industry in northeast British Columbia is dependent on a partnership between strong communities that are able to service the industry cost effectively, and a responsible industry that provides long-term stable employment opportunities.

“The B.C. Government clearly understands the challenges associated with unlocking the resource potential in this province and programs such as these demonstrate the Government's commitment to promote responsible development,” said David Pryce, vice-president Western Canadian Operations, of the Canadian Association of Petroleum Producers. “Access is critical to the successful development of resources and we support the government's commitment to develop infrastructure, which enables that access.”

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Media contact:	Tamara Little Communications Director Ministry of Energy and Mines 250 952-0621 Cell: 250 889-1825

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