Natural Gas

They pay less; you pay more

A study written for Canadian Centre for Policy Alternatives by earth scientist J. David Hughes offered a conclusion on the success of neoliberal politics in Canada. Success, that is, for the corporate world.

A pull quote in the executive summary of the Hughes report provides the gist:

Canada’s remaining non-renewable energy resources are being sold off in an environment of low prices with minimal and declining returns to governments.

Hughes’ statement is particularly true in British Columbia. Production of natural gas has steadily increased.

But provincial revenues from natural gas royalties have steadily declined.

Royalties are one element of natural gas revenues. A second involves receipts from rights offerings. Yet, that is disappearing too. In the last four fiscal years, sale of rights brought in an average of $60 million a year. That amount is 3% of the amounts realized in 2009.

In addition, gas producers have accrued unrecorded credits of about $3 billion that may be used to reduce future royalty payments.

Provincial governments of western Canada committed to maintaining natural resources taxes at “competitive” levels. If one province offers a tax reduction or cash incentive to fossil fuel producers, that policy ensures the others will do the same.

If one province absorbs cleanup costs when fossil fuel producers abandon oil and gas wells, the others do the same.

The result is a race to the bottom. If the trend continues, people of British Columbia will be paying gas producers to remove natural gas and ship most of it out of province.

Meanwhile, those of us using this fuel in our homes are seeing significant increases in heating costs in 2019.

That is how neoliberal economies work.

Categories: Natural Gas

14 replies »

  1. What I’m failing to understand here is a claim by Christy Clark government in 2013: ‘B.C.’s total natural gas reserves are estimated at 2,933 trillion cubic feet — statement issued by the Minister of Natural Gas Development Rich Coleman.’
    Why are British Columbian consumers paying anything for OUR natural gas?

    Liked by 1 person

  2. What isn’t mentioned is how much of this is fracked gas.
    I’m guessing you never hear this discussion so it never becomes an issue is the corporate plan to keep their social nest tidy.
    Its revealing to see through the SNC relationship with the Government , and the statements made by CEO of the Royal Bank of Canada who considers global warming issue to be just a social issue for the politicians to work out so “we” can unlock our oil resources?
    When the NEB is brought back from the dead again its easy to see who makes the policy in Canada. The politicians just facilitate this desired policy. Well I didn’t vote for this or for SNC Lavalin to create policy for Canadians.
    So what Norm says is quite true about out marketplace being solely defined by the need of the corporate world to make a easy profit.
    This precludes any other social direction on how we choose to adapt to the world as we see it unfold, and be smart about it.
    Just a dumb profit without an engagement by democracy to consider our future is their goal.
    If we were smart we could have our cake , and eat it too like the Norwegians.
    If we were really smart the corporate world would submit to the advantages of having a democracy over unimaginative dumb profits to creaat a prosperity.
    Thank goodness for Norms website, and the alternative media it can be discussed..

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  3. Interestingly, Stumpage paid for logging of crown ands, 2008 – 2018 FELL by 2/3rds: At the same time, the big forestry / pulp & paper companies shut down, preferring to do raw log export!

    Liked by 1 person

  4. Is the entire province corrupt?

    Are we just giving away our natural resources to ensure huge profits for corporations?

    Everyday it is like a another slap on the face with higher taxes.

    Where the hell is Dave Barrett’s NDP? Because the NDP of John Horgan and David Eby is beginning to look more and more alike Photo-op’s and Coleman’s Liberals!

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  5. you sell more and make less. That is not a good business plan. Time to have redo on that. Lets hope some one in Victoria makes a change to that or leaves the natural resources right where they are, in the ground. Who knows perhaps in 5 to 50 years from now, they’ll be worth more.

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  6. Is it enough to say, “Because: jobs,” while the province is getting nothing else out of this gas-mining activity?

    Jobs do generate activity, taxes and spending… so I’m willing to look the other way for something like the water bottling plant at Hope, which is drawing from a rich and renewable aquifer, while paying a pittance for the water. The big difference is that natural gas is a finite resource that is used as a heat source for (I’m guessing) well over half of the residents of the province.

    We should not be giving it away, while bearing higher prices for local use.

    Liked by 2 people

  7. To G. Barry Stewart’s point about jobs, Rafe Mair was fond of this Winston Churchill quote:

    “Madam, would you sleep with me for five million pounds?”
    Socialite: “My goodness, Mr. Churchill… Well, I suppose… we would have to discuss terms, of course… ”
    Churchill: “Would you sleep with me for five pounds?”
    Socialite: “Mr. Churchill, what kind of woman do you think I am?!”
    Churchill: “Madam, we’ve already established that. Now we are haggling about the price”.

    To Norm’s point about racing to the bottom:

    “The lesson is clear: B.C. doesn’t need a frenzied housing market to grow its economy, but we do need to attract capital investment and keep B.C.’s resource industries competitive.”

    https://biv.com/article/2018/11/natural-gas-lifts-bc-economy-housings-contribution-slows

    Not sure why those folks wouldn’t use Norm’s graphs in their article. Unless it’s because we might get the idea that “our” resources are paying for everything after all, including the capital investments. And those we are “attracting” aren’t charitable donations.

    Liked by 1 person

  8. G. Barry Stewart, don’t be so confident the water will be a renewable in that aquifer. Climates change, weather changes, etc. If we have a look at history whole cities, civilizations have been lost due to a sudden loss of water. California is seeing aquifers dry up and the earth collapsing. The pumped out water over a long period of time and it did not renew itself. If companies want our water they ought to pay top dollar for it. they’re making top dollar. If they want the water, which they do, they’ll pay more. its just that we have made it so dam easy for them to not pay, just because there are a few jobs attached.

    There is evidence that approx. 10K years ago Vancouver experienced such a drought, the trees stopped growing. What went around once, can come back and we need to be mindful of that.

    Liked by 1 person

    • (Sorry to sidetrack a bit, Norm)

      e.a.f.: The Hope water plant is one area where I side with corporate initiative. 60+ jobs have been created and local taxes boosted, where previously a valued renewable resource was being untapped.

      I lived in Hope for almost 30 years and am there regularly, so I know the area well. While it’s prudent not to get too self-sure that resources will always be in abundance, we’ll be in a sorry state elsewhere in the province, if the Kawkawa Lake aquifer ever runs dry. That water bottling plant will be a flea on a very large elephant.

      I lived on the east side of the lake, before the water plant was built. No one has basements there, as the soil is so saturated. In some places, if you dig a shovelful of soil, you can look in the hole and see ground water moving along.

      Likely within a day, the spring water flows underground, into Kawkawa Lake — then on to the Coquihalla and the Fraser rivers. Nestlé is capturing the resource where little treatment is needed. If they didn’t harvest the water, it would soon be unfit for commercial purposes.

      If forced to shut off their pumps, Nestlé could get the District of Hope to pump its own wonderful, unbleached water to the Nestlé plant for a nominal fee, then continue bottling. Could we complain then?

      I rarely drink bottled water, myself — and it ruins my day when I have to cave to ‘external pressures’ to buy a bottle of water for $2.50 or more from a store or concession stand.

      The truth is: the retailers are making a killing on the product, not the bottler. Retailers take a brick of 24 bottles that they paid perhaps 10¢ a-piece for… put in the fridge… and sell it at a 900 to 2400% mark-up. I can’t think of a steeper mark-up on any retail goods — even diamonds. The outrage should be directed at retailers.

      Liked by 1 person

  9. Its true we need to attract investment as Norm says but what kind. Using Government giveaways, and cosy corruption as a lure we won’t find those people of innovation who look beyond the status quo for a guidence into the turbulent future yet to come.
    Who do we want to have as neighbours after all.
    Too bad Hope didn’t charge more for their water, and reduce the 2400% markup we have to pay for
    it. A learning lesson perhaps.
    . Liked Barry’s on the ground observations about the aquifier, and Hope.

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  10. Well lets look at it this way. Over the last 30 years of Neo-Liberalism kowtowing to business in every aspect, we have massive government debt , the public has enormous credit card and household debt, wages have been stagnant for decades and most Canadians are 1 paycheck away from ruin. But the corporate elite have made out like bandits, record profits and stock buy backs and slashing their work forces or shipping production off shore . All the while the 1% leeches play the Panama shuffle with their taxes or according to testimony today , the PMO strong arms the nations top cop to let fraudsters of the worst order skate on their blatant crimes. At the risk of hyperbole if we don’t already have the tar and feathers ready i don’t think much of anything will change. The BC Liberals still enjoy 38% support among the ….lets call them the “electorate”.
    On a side not its good to see Ben Chin landed on his feet after his tenure with the debt Queen Christy. Too bad he landed in a pile of scat up to his ears. Ya i don’t have much hope for us when one side can get away with graft at will.

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