CALGARY -- The main hurdle facing supporters of oil and gas production in the waters off the Queen Charlotte Islands won't be the West Coast's environmental movement.

While much has been made of how "green" protesters will do whatever they can to block offshore drilling near the Queen Charlottes, the energy industry will be even more concerned about something basic: It won't be profitable enough to warrant pushing ahead.

The election of Gordon Campbell's B.C. Liberals in May, ending nearly a decade of anti-business sentiment under the New Democratic Party, raised the hopes of the pro-drilling side.

Those are false hopes. Based on what's unfolding, not a drop of crude oil will be sold within the next decade. Not a thimbleful of natural gas will flow down any pipes to buyers, either.

That prediction doesn't arise because of fears over environmentalists chaining themselves to exploration rigs.

The biggest obstacle will be persuading potentially interested companies such as Petro-Canada and Chevron Canada Resources to set aside their worries about red tape and pour millions of dollars into B.C.'s North Coast.

Petrocan and Chevron aren't exactly banging down the B.C. Premier's door to get drilling permits. There are simply too many other prospects elsewhere that are way more juicy.

For now, the moratorium on offshore drilling near the Queen Charlottes, put in place by Ottawa and British Columbia in 1972, remains in force.

Even if that ban is lifted, assuming new B.C. Energy Minister Richard Neufeld aggressively pursues the offshore file, the regulatory rules governing any project would be onerous enough to scare away all but the most determined companies willing to engage in a public relations war against natives and environmentalists.

It's conceivable that within 25 years, with improved technology and better project economics, oil and gas could flow under strict conditions.

In 2001, the chances are slim that any firm in the oil patch would bite, even if they somehow got the go-ahead.

The B.C. government will have to weigh the objections of environmentalists against the cheer-leading from civic leaders in the Prince Rupert area wanting to create much-needed jobs for the region's depressed economy.

B.C.'s politicians are looking at whatever is possible to bolster the provincial economy. So, it seems that it's only a matter of time before the wheels are set in motion to do seismic testing, at a minimum, to assess what riches are hidden in the Queen Charlotte Basin area.

For the sake of making things appear as attractive as possible, let's say the reserves turn out to be as huge as touted in some studies -- 10 billion barrels of oil and 43 trillion cubic feet of natural gas in B.C. coastal waters.

And let's gloss over the question of how much of that would be technically viable to extract, and just give the pro-drilling camp the benefit of the doubt and say it's all recoverable.

The major snag arises when looking at the economics. All sorts of asterisks would accompany any approvals. Having emergency rescue crews on standby, compensation for native groups such as the Haida, an environmental cleanup fund and a helicopter service all costs money.

The main impetus behind jump-starting the Queen Charlottes project won't come from the private sector, but from Mr. Campbell's Liberal government and civic and business leaders in the Prince Rupert region. That should serve as a warning sign.

To make projects attractive, there would need to be large government subsidies at the federal and provincial level.

As a purely private sector endeavour, producing oil and gas in the Queen Charlottes won't make the grade. It only begins to make political sense when the rationalizations surface about how important it is as a regional development.

In another generation, it's entirely within the realm of probability that a future B.C. government will be desperate enough to pump in millions of taxpayer dollars to ensure offshore drilling becomes a reality.

Based on the cards on the table now, however, Queen Charlottes drilling is a lost cause. There are other risky proposals, such as developing the Mackenzie Delta's gas fields in the Northwest Territories and expanding the East Coast's offshore industry, that are more deserving of grabbing the attention of Canada's energy sector.
bjang@globeandmail.ca