In 2008, British Columbia gained $3.2 billion from sale of petroleum and natural gas rights. If the second half of 2019 matches the first, revenue from right offerings for the year will amount to $5 million, less than 1/5 of one percent of 2008, despite substantially increased production of natural gas.
Each month, BC’s energy ministry puts petroleum and natural gas rights for selected properties to tender. Information presented here is drawn from my records of each sale since January 1997.
Successful bidders pay a one-time fee plus land rent and a bonus amount for each offering. The more interest a parcel attracts, the larger will be the bonus bid, if open competition exists. That it still does is unclear.
Bids are often made in the name of land agents so beneficial owners of rights may be unknown to the public. In the first six month of 2019, there have been only seven successful bidders.
From the June 19 tender, revenue achieved was $7,942.50, a amount not the worst for 2019. The province realized zero dollars in both February and March. Compare these results to May 2008 through August 2008 when revenue, expressed in 2019 dollars, was more than $1.8 billion.
July is not likely to improve. Only one small parcel is offered.
An earlier In-Sights article, Grand Scale Giveaway, suggests the current NDP Government, like its Liberal predecessor, has not adapted the province’s revenue system to the industry’s changed methods of exploration and production.
Failure to adjust is not accidental. Politicians in BC consciously decided to give public resources to the private sector for next to nothing.
This is a far larger hit to public wealth than the $1 billion sale of ‘surplus’ public land recently in the news after a report from the BC Auditor General.
Categories: Natural Gas