Despite claims that natural gas will last almost forever and drop massive wealth into BC’s treasury, I’ve demonstrated here, with numbers taken from finance ministry documents, that natural gas production contributes little to BC’s public treasury through royalties.
The amount that might otherwise be payable for current production is reduced by credits allowed gas companies; credits that amount to public subsidies of the fossil fuel industry. At the end of fiscal year 2013, $934 million of credits that will reduce future natural gas royalties remain outstanding. Despite previous complaints of Auditor General John Doyle, government has not recorded this amount as a liability of the province.
In an odd conflict of goals and strategies, the credits outstanding in 2013, by which government encourages production of fossil fuel, amount to 84% of the carbon tax collected in 2013, by which government discourages consumption of fossil fuel.
According to page 113 of the Three Year Fiscal Plan, the amount of program credits will exceed royalties in 2016 by $43 million. As the chart below demonstrates, despite Christy Clark’s chatter, the natural gas industry is an expensive friend to have.
Of course, since the BC Liberals are foregoing revenue from gas producers and other resource companies, they turn elsewhere for sources of revenue. This is but one example.