Regional Council Update 2012

Regional Council Update 2012 By: Mayor Bill Streeper Colin Griffith, DSI September 2012

Welcome • First Nations – Representatives from Fort Nelson First Nation, Prophet River First Nations, AchoDene Koe First Nation • Visiting dignitaries from industry and government • MLA Pimm, Parliamentary Secretary for Northeast BC • All of our citizens and business leaders

Acknowledgement / RecognitionHorn River Basin Producers Group & Spectra Energy A world class resource play requires a world class approach to resource development. The industry sector response was to create the Horn River Producer’s Group (a consortium of the 11 major companies leading the Horn River development) dedicated to an integrated and comprehensive approach to the development of the Horn River. • Leading edge approach to resource development • Coordinated planning and development • Facilitation of open communication; collectively understand stakeholder and First Nation concerns • Minimize environmental impacts, and maximize benefits to the region. • Fort Nelson Energy Expo, a career fair for local vendors and residents • The Northern Lights College Oil and Gas Field Operations Training Program • A Procurement Specialist position within Energy Services BC • A MEMPR-administered report card to measure local employment. • Spectra Energy has been a community backbone since 1964 • Expanding gathering and processing capacity in Fort Nelson, British Columbia, to accommodate as much as 830 mmcf/d of incremental gas from the Horn River producers. • Staged expansions of existing Fort Nelson area infrastructure to meet the scale, scope and timing of customers’ needs • The Fort Nelson Gas Plant is the largest sour gas processing plant in North America and is the only facility currently processing Horn River gas.

Today’s Update • Review of Regional Council’s strategic objectives • Provincial initiatives relative to shale gas • Review of the results of the business case prepared in 2011 as requested by the Minister of Energy and Mines for BC • Review the MOU signed between the Regional Council and the Provincial government on laying out the plan for the future development of the NRRM and Fort Nelson as the Shale Gas Service Centre

Strategic Objective – To ensure that the region’s shale gas and other resources are developed in a manner that protects the natural environment and the safety and health of the region’s residents. Protection of the Environment and the Health and Safety of Residents of the Region The Regional Council will: Ensure that natural gas exploration and development occurs in an environmentally sound manner. Support all measures to increase the level of air quality and water quality monitoring in the region. Support measures to monitor the health and safety of the residents of the region and will oppose any developments that adversely impact the health and safety of either the workforce or the residents.

Strategic Objective - To establish a partnership with the First Nations within the region to address matters of mutual concern and to collaborate in the provision of services. Establishment of Partnerships with First Nations The Regional Council will: Continue its efforts to build a strong relationship with the First Nations of the region. Support the First Nations of the region in the negotiation of community benefits agreements with the Provincial Government.

Strategic Objective – To diversify the NRRM’s economy by ensuring that the region’s forest resources are protected for use by processing facilities in the NRRM. Protection of Forest Resources for Processing by Local Industry The Regional Council will: Formally communicate its position to the Minister of FLNRO and industry. In the event that the existing tenure holder is not interested in re-establishing processing facilities in the NRRM, Council will advocate for the reassignment of the timber supply and tenures to companies that are currently operating in the NRRM or that wish to establish new operations in the NRRM.

Strategic Objective - To establish the NRRM as the key service centre supporting industrial development within its boundaries. Continued Development of the NRRM as the Key Service Centre to Shale Gas and other Resource Development Regional Council will: • Work with industry in order to ensure that production and other permanent jobs are located within the NRRM. • Oppose the expansion of fly-in fly-out operations for all employment other than temporary employment related to exploration and construction activity. • Work with the Province to develop Crown land for residential expansion and to ensure that risks are shared. • Continue to advocate for key Provincial Government investments in regional infrastructure and provincial services with specific emphasis on the upgrading of health care and medical services, emergency services, police services, SYD road upgrading, construction of the Centre Access Road and the future provision of adequate power supplied through either a BC Hydro mainline expansion or local generation.

Strategic Objective - To establish the NRRM as the key service centre supporting industrial development within its boundaries….cont’d Continued Development of the NRRM as the Key Service Centre to Shale Gas and other Resource Development Regional Council will: • Continue to plan for development of community infrastructure and services: • Upgrading and expansion of the airport • Expansion and upgrading of its infrastructure services including the servicing of residential land and the • Development of a new sewage outfall. • Upgrading of the Alaska Highway Corridor through Fort Nelson. • Construction of the proposed public safety building. • Completion of the recreation complex including the leisure facility. • Undertaking other improvements to community infrastructure and facilities consistent with the NRRM’s adopted Capital Plan.

Provincial Initiatives Relative to Shale Gas Development Graphic from Globe and Mail – Sept 10, 2012 • Requested the NRRM to prepare a Business Case on the development of the Horn River and Fort Nelson. • Signed an MOU with the NRRM laying out a 3 step process for the future development of community and regional infrastructure. • Appointed a Parliamentary Secretary for Natural Gas – Pat Pimm North Peace MLA • The Province adopted a Natural Gas and LNG Strategy.

NRRM Business Case • Based on 40% of Horn River reserves only (excludes Liard and Cordova) • Presented to the Minister of Energy (Sept 2011) • Horn River reserves documented by NEB and Minister of Energy (May 2011 Report)

Creating BC Jobs from Shale Gas Development • Transitioning away from the fly-in fly-out business model • Maximizing BC job creation, revenues and community benefits

Aircraft Movements – The Impact of a Transient Work Force

Provincial Agreement on the Development of the NRRM and Fort Nelson as the Shale Gas Service Centre Process and Commitments agreed to on February 29th, 2012 Step 1 May 31st, 2012 Step 2 Oct 31st, 2012 Step 3 Jan 31st, 2013

MOU – Development of the NRRM

MOU – Development of the NRRM July 12

Outline of the Work Plan

Next Steps in the Completion of the Work Plan • Complete the draft plan including options. Target date October 15th, 2012 • Review economic scenarios with industry – Target date first week of October 2012 • Review the draft plan with industry and First Nations – Target date last part of October 2012 • Completion of the final plan – Target date October 31st, 2012

Provincial Return on InvestmentDevelopment of the Horn River, Cordova and Liard Shale Gas Resources

Thank You for participating and attending this year’s Shale Gas Symposium

Regional Council Update 2012