Gas hydrates are a potential energy resource, a possible factor in climate change and an exploration geohazard. The University of Toronto has deployed a permanent seafloor time-domain controlled source electromagnetic (CSEM) system offshore Vancouver Island, within the framework of the NEPTUNE Canada underwater cabled observatory. Hydrates are known to be present in the area and due to their electrically resistive nature can be monitored by 5 permanent electric field receivers. However, two cased boreholes may be drilled near the CSEM site in the near future. To understand any potential distortions of the electric fields due to the metal, we model the marine electromagnetic response of a conductive steel borehole casing. First, we consider the commonly used canonical model consisting of a 100 m, 100 m thick resistive hydrocarbon layer embedded at a depth of 1000 m in a 1 m conductive host medium, with the addition of a typical steel production casing extending from the seafloor to the resistive zone. Results show that in both the frequency and time domains the distortion produced by the casing occurs at smaller transmitter-receiver offsets than the offsets required to detect the resistive layer. Second, we consider the experimentally determined model of the offshore Vancouver Island hydrate zone, consisting of a 5.5 m, 36 m thick hydrate layer overlying a 0.7 m sedimentary half-space, with the addition of two borehole casings extending 300 m into the seafloor. In this case, results show that the distortion produced by casings located within a 100 m safety zone of the CSEM system will be measured at 4 of the 5 receivers. We conclude that the boreholes must be positioned at least 200 m away from the CSEM array so as to minimize the effects of the casings.