EnergyBC

Resource Value (more...)

As estimates for the quantities of oil and gas reserves in the Queen Charlotte and other basins are still highly speculative, determining the potential monetary value must be done with caution. There are numerous revenue sources to be derived from offshore activity, most notably for governments in the form of taxes and royalties. All potential revenues must be weighed against the total investment required from both the pubic and private sectors to get operations up and running.

Resource Value	- several reports have attempted to estimate the economic value of the Queen Charlotte Basin revenues, however such efforts must be interpreted with caution (SFU, 2004)
	- the Geological Survey of Canada's median resource estimates place the value of offshore oil as high as $55 billion (US) and gas as high as $40 billion (US)
	- the calculated "downstream" value, including additional wealth brought to the province, could be close to $500 billion (US) over the course of the project
	- over 30 or more years, according to economists this could possibly work out to $3 billion (US) from production a year, making oil and gas the second largest industry in BC after tourism ($8.3 billion)
Revenue Streams	- one major source of revenue from offshore oil and gas comes from royalties paid on each barrel
	- another form of revenue is derived from taxes at both the federal and provincial level
Investment	- one must not forget to factor in private and public investments as a cost that will offset potential revenue
	- Hibernia on the east coast of Canada was supposed to be built and operated without any government money, however the project wound up relying heavily on numerous government grants, loan guarantees and tax exemptions (Marshall, 2001)

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