Natural Gas

Natural gas revenues: going, going, almost gone

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

10 replies »

  1. Norm, you missed one other part of the giveaway to natural gas producers.

    Huge amounts of fresh water are needed for fracking. An American magazine reported the production method “produces huge volumes of wastewater laced with cancer-causing chemicals, salts and naturally-occurring radioactive material that can cause earthquakes and contaminate aquifers when pumped underground.”

    https://www.motherjones.com/environment/2018/08/the-amount-of-toxic-wastewater-produced-by-fracking-is-unbelievable/

    The Narwhal reported that Progress Energy [owned by Petronas of Malaysia] illegally built dams to hold water for fracking and then, “made an audacious request to the Environmental Assessment Office to have the two dams declared retroactively exempt from review — a request that was quietly granted by the province’s self-described neutral environmental regulator on July 17.”

    https://thenarwhal.ca/b-c-grants-fracking-company-free-pass-to-build-illegal-dams/

    Adding to this ongoing outrage, the province’s drought map show northeast BC is “extremely dry”.

    Government may be complex but it appears our energy and environmental policies are insane.

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    • Our so called leaders and governments espouse democratic values, human rights and environmentalism here and around the world ,yet the pathetic hypocrites deal with criminal outfits like Petronas and others and even allowing them on our soil to do the dirty deal. So much of the media don’t print it, and talk radio doesn’t talk about it. They should all be ashamed of themselves for not speaking against it. Dirty, dirty, dirty.

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  2. So, why bother. Natural gas exports, the biggest con job ever in BC.

    No wonder why the NDP are screwing us over with high gas taxes, why make big corporations pay, when they can squeeze the common folk.

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  3. I guess Horgan is following in the footsteps of Christy Clark along that road paved with LNG gold. Yeah right. Fools gold maybe for us and any real gold for the private club.

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  4. Instead of GIVING our natural gas away, why not use it to fuel a power station such as Calgary’s Shepard Energy gas fired plant? Total cost: $1.4 Billion vs Site C $12 ++? Billion
    Cost of fuel less than half the cost of interest on Site C loan, and the interest cost have nowhere to go but up!
    No land disruption, no fights with the natives, no expensive pressurizing costs of LNG, no transportation costs of LNG.
    Even a half witted nincompoop can see there is no argument for Site C, or for giving away our natural gas.

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