Since first reported in 2007, the BC government’s program of natural gas royalty credits reduced payments from gas producers by $6 billion. In addition, government awarded those companies another $2+ billion in credits that can be used to reduce future royalty payments.
In the five fiscal years from 2013 to 2017, net royalties after credits taken and accrued amounted to a total of only $12 million. In FY 2006, net royalties received were $2,357 million in 2018 dollars.
With government charging virtually nothing for the resource, gas producers have steadily increased production. The charted numbers shown here are taken from the province’s Budget and Fiscal Plans.
So, comparing 2006 to 2018, the volume of gas production rose 86% but royalties went down 94%.
In 2006, royalties amounted to 28% of the wellhead value of natural gas produced in BC. In 2018, royalties amount to 1/5 of 1% of the gas value.
Payments to government for exploration rights, a revenue stream separate from royalties, peaked at $2,428 million in 2009. They averaged $32 million in the three years 2016 to 2018 and are projected to be $9 million annually in the next three fiscal years.
Politicians demand ordinary citizens pay increasing amounts of carbon tax — supposedly to reduce fossil fuel consumption — while at the same time they dish out billions of dollars in subsidies to ensure gas companies produce more fossil fuels. In addition, the current government may be giving an additional $6 billion to LNG producers.
Categories: Natural Gas