One of the most important issues when discussing the potential socioeconomic benefits of offshore development for local residents is dealing with people's expectations. On the East Coast, many local residents felt that their expectations were not met in terms of actual employment and financial benefits accruing to their communities (JWEL 2001). Storey et al. (1996) did a survey and found that the proportion of residents citing employment creation as a benefit of offshore development had declined from 89% before the projects to 65% after the projects. JWEL (2001) cited unrealistic expectations as a primary “lesson learned” from development on the East Coast, stressing that communities must have realistic expectations of what the offshore oil and gas industry can bring. Shrimpton (2004) points out that expectations about the offshore industry and its positive and negative impacts are often based on stereotypes that tend to emphasize the negative rather than a balanced portrayal of potential costs and benefits. This question of expectations is especially pertinent in BC where large (but unproven) resource estimates can create a dangerous euphoria regarding potential economic benefits at both the provincial and regional levels. At the same time, long held views of the industry as a monolithic, socially disruptive, environmental polluter elicits fierce opposition without proper consideration of technological advances and innovations in all aspects of offshore operations.

Lessons from Other Regions

If British Columbians are hired for exploration, construction or production positions, the location of these jobs within the province will prove important in determining long-term socioeconomic benefits. Employment from offshore development tends to concentrate in major urban centers like in Nova Scotia, where 90% of the offshore contracts awarded went to firms located in Halifax (Gardiner Pinfold Consulting Economists Ltd. 2002). In Alaska, for towns influenced by offshore development, the highest per capita incomes were reported in communities with the lowest percentage of native Alaskans (Fall and Utermohle 1995). Another trend observed was that benefits of offshore development fall mainly to men: in Newfoundland, only 5% of the offshore workforce was female (Shrimpton 2000). There is also an affect on local communities. In the case of Hibernia, a decision was made to house employees in a temporary work camp outside existing communities in an effort to reduce disruptions to the small populations. This minimized some of the potential economic benefits to local businesses, as construction phase employees were essentially migratory workers (SFU, 2004). All of these issues would should be addressed before a BC-based development is allowed to proceed.

As discussed, offshore development does provide employment for local communities, but the quantity and duration of jobs is dependant on the types of operations. SFU (2004) reported that the percentage of provincial residents employed for several East Coast projects ranges from 57% in Sable Island (Nova Scotia) to 90% in Hibernia (Nfld.). However, SFU (2004) notes local hiring statistics do not make a distinction between residents hired from the local regions and residents hired from other areas of the province (defined as more than 50 km from the site of primary operations). A study of hiring practices for the Bull Arm construction site found that non locals took 93% of the jobs (Storey et al., 1996). SFU (2004) does note that this does not accurately indicate how successful local residents were in obtaining jobs because the low proportion of local hiring may have been due to a shortage of local labour and/or a preference for hiring outside skilled labour. The issue from regional residents' perspective is what proportion of residents who wanted work were able to find work. In the case of Bull Arm, local residents believed that they did not receive a fair share of the employment and that there was a bias for outside hiring (Storey et al., 1996).

Marshall (2001) noted that the Hibernia construction project created 26,000 person-years of employment, or about 5,000 jobs (6600 at peak employment) for a five-year period. On the basis of total investment, however, he considered employment in the Hibernia unsatisfactory. The exploration and construction phase of the Hibernia project created, on average, 5.5 person-years of employment per million dollars invested (jobs per million, or JPM). In 1998, the first full year of operation, the $299 million in investment led to 960 jobs, or 3.2 JPM. In 2000, a further $321 million investment created 2.5 JPM. As of 2001, the project as a whole had created – even when including multiplier effects – only 7.5 JPM. Two-thirds, or 5 JPM, of those went to Newfoundland residents. Thus on the regional level, Hibernia was at least successful in generating employment for Newfoundlanders. The capital-intensive nature of offshore job creation should not necessarily be perceived as a negative characteristic in BC provided that a majority of investment is contributed from private sector sources.

Regional Profile (from BC Stats)

Coastal communities are experiencing a downturn in local resource based industries (fishing, forestry, mining), and would look to offshore oil and gas to help revitalize the coastal economy. Employment data from BC Stats shows that the number of residents receiving government benefits is well above the provincial average. The ability of residents to obtain jobs is often dependant on education, another area in which the region is among the weakest in the province. The offshore industry does offer opportunity, the question remains how local communities will be able to take advantage of it.

Personal Wellness

Community Wellness

Regional Impacts

Education