February 13, 2013, three months before her first general election as Premier, Christy Clark announced:
…the new British Columbia Prosperity Fund to ensure communities, First Nations and all British Columbians benefit from the development of a new liquefied natural gas (LNG) industry…
LNG development is poised to trigger approximately $1 trillion in cumulative GDP within British Columbia over the next 30 years and that means more than $100 billion will flow directly to the Prosperity Fund.
Province wide, LNG is expected to create on average 39,000 annual direct, indirect and induced full-time jobs during a nine-year construction period. As well, there could be as many as 75,000 full-time jobs required once all LNG plants are in full operation…
Factsheet issued by BC Liberal Government:
…Projected total revenues to government are estimated between $130 billion and $260 billion over the next 30 years. In order to maximize the benefits of these developments to future generations of British Columbians, the provincial government is establishing a new British Columbia Prosperity Fund…
During the 2013 election campaign, Liberals promised that LNG revenues would ensure a debt free British Columbia and gas production would fund essential spending for healthcare, education and social services. They claimed the Liberal plan demonstrated superiority of BC’s financial management because, after almost 40 years, Alberta’s Heritage Fund contained only $17 billion, a fraction of the fund accumulation rate intended for B.C.
When Premier Clark made the 2013 announcement, 53 drilling rigs were active in BC’s gas fields. According to the Baker Hughes Rig Count, the current number is six. Natural gas revenues, which averaged $2.33 billion a year during the decade before Clark’s leadership are this year less than one-tenth that amount in current dollars.
The numbers are getting worse too. Fiscal year 2016 is less than 50% of the 2012-2016 year average and about 10% of the 2002-2011 average.
Yet, despite declining revenues and evidence that both conventional and LNG markets are oversupplied for at least the next decade — and the fact almost 200 nations pledged to move away from fossil fuels — BC Liberals think they can win another election by claiming natural gas will be the multi-decade engine of our provincial economy.
It is not true and BC Liberals know it to be untrue.
…Broad masses …more readily fall victims to the big lie than the small lie… they would not believe that others could have the impudence to distort the truth so infamously. ….For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying. – Mein Kampf (Murphy translation)
Categories: Natural Gas, Natural Resources
Perhaps Christy can display her ability to conserve. Just reuse the 2013 Liberal campaign bus. Same empty promises.
She’s too crafty a woman to invent a new lie when an old one will serve. – W. Somerset Maugham
On time and on budget! oops,er ah um, but back in the nineties……………
The NDP has to begin to hammer home that liar’s are immoral people and the Liberals are not morally qualified to govern any more. That is the message they should start now and not stop till election night.
Thanks for another great column, Norm. I have a question you may be able to answer. I always assumed that the BC Liberals were selling us out when they began great sell off’s of oil and gas drilling rights, but many people seemed to believe it was like a yearly income the government had. Am I correct in believing that the oil and gas rights that were sold off during the Campbell years were for long term leases? ie; once sold, they don’t require future payments. If this is so, is the huge drop in revenue’s since Clark became leader simply because almost all of our available oil and gas rights have already been sold off? Either way, the BC Liberals have given away virtually all of our resources with little compensation to the taxpayers.
Thanks again for all your hard work!
Generally, subsurface resources are owned by the Province and private industry must sign a tenure agreement with government to develop these resources. The province gets revenues by selling rights and by charging royalties for produced revenues. According to the ministry:
“Typically, agreements are for three to ten years and can be renewed or extended, require exploration or development, and call for payment of rents and royalties to the Province…”
The Clark administration has worked to give advantages to the industry in numerous ways. The public is spending far more than it did previously and has widened the royalty credits programs dramatically. In addition, Bill 12 introduced in 2014 allowed for “relief from rent and extensions for both drilling licences and leases.”
It is impossible to provide accurate details on specific properties since government hides that information. However, we can see the overall results.
When an O&G company acquires tenure, they submit one year’s rent and a “bonus bid.” The bonus goes into a liability account as deferred revenue. The amount is recognized as revenue over 9 years. In 2016, BC treats as 2016 revenue, 1/9 of the bonuses receive in each of 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015 and 2016. That means that the last fiscal year reports over $700 in tenure revenue even though less than $16 million was received in FY 2016.
In May 2008, bonus bids reached an average of $9,538 per hectare. In five months of calendar year 2016, it has been $178 per hectare.