Natural Gas

Rhetoric subjugated reason

In British Columbia, the energy ministry is staffed by regulators who don’t believe in regulation. That is a BC Liberal philosophy sustained by NDP timidity because the Horgan Government is nervous about giving ammunition to opponents who accuse it of being anti-business, anti-development and anti-growth.

As a result, cartelized, profit-seeking natural gas producers still exercise undue influence over the energy ministry. This rich and sophisticated industry is well practiced in using financial weapons to procure its goals and policy makers in the civil service are soft targets. As Graeme Wood of Glacier Media reported:

Senior B.C. government employees are not subject to statutory financial disclosures, a key component of mitigating conflicts of interest and the potential for corruption.

Before appointment as Minister of Energy, Mines and Petroleum Resources, Michelle Mungall talked about the need to establish new directions in the technically complex department. However, the novice minister chose to keep senior management in place and maintain courses charted by her Liberal predecessors.

We can only assume that she consulted with her staff, that rhetoric subjugated reason and she folded.

Commenting on the previous In-Sights article, Lew Edwardson drew attention to a report on royalty programs dated February 2018. It was written by Inés Piccinino, then Assistant Deputy Minister Oil and Gas Division, now VP of the BC Oil and Gas Commission.

The ADM’s covering message reveals clear intention to promote increased fossil fuel production:

British Columbia (B.C.) has an enviable position in the North American energy picture. Abundant and diverse resources are transforming the Province into a clean energy powerhouse. Natural gas has a key role to play in this context. As the cleanest burning fossil fuel, natural gas is poised to replace other more carbon intensive sources of energy worldwide, thus reducing greenhouse gas emissions and contributing to better local air quality, economic growth and access to energy in developing countries.

The phrase “cleanest burning fossil fuel” is intended to misinform. It may be narrowly true but ignores the dirty processes that make natural gas ready to burn.

Science does not support the pretense that we can reduce greenhouse gas emissions by producing more greenhouse gases.

Most of the Piccinino report is a justification of the department’s failure to gain a material share of the value of natural gas produced in BC.

The Province has a series of natural gas royalty programs aimed at ensuring British Columbia’s fiscal regime remains competitive with other jurisdictions…

The ADM’s words mean that British Columbia is competing with Alberta and if that province intends to giveaway natural resources, this province will do the same.

B.C. royalty programs included lower royalty rates to encourage marginal and ultra-marginal natural gas wells, royalty credits for infrastructure development, a pilot program for royalty credits for upstream infrastructure that reduces upstream vented methane emissions (Clean Infrastructure Royalty Credit Program) which was run for the first time in 2016, royalty programs aimed at developing unconventional natural gas resources, which include royalty credits for deep gas exploration (deep well program), and the net profit royalty program...

That statement would graduate any bloviating bureaucrat still in training. The ADM could have said more simply that royalty credits have been extended to almost all activities of BC natural gas producers.

In fact, the report states that 91% accessed a royalty program and the few companies not participating are mostly operating conservation gas wells or producing gas out of oil wells. By design, those already pay very low royalty rates.

Rather than concluding that credits are too broadly allowed, the Ministry boasts 91% participation proves Goal 2 of BC’s royalty programs is met. It calls for “equal access to royalty programs.”

The Ministry’s report mentions an objective of maximizing royalties and taxes but BC treasury receipts demonstrate abject failure. Despite much higher production than two decades ago, the province’s natural gas revenue has steadily declined.

All the words mumbled by bureaucrats don’t change that fact.

Categories: Natural Gas

6 replies »

  1. A couple of years ago in a report on TECK Resources operations in the Kootenays, Auditor General Carol Bellringer referred to “captured ministries” and “hyper-partisan staff.” It seems as if the NDP has accepted the staff recommendations without question, which tends to paint the current government as “Liberal light.” Most of the staff have only ever worked for the Liberals, and perhaps are working their best to bring them back to power.


    • Former BC Liberal Energy Minister Bennett is not only happy the ministry and its staff remain captured, but asserts that the Premier is snared as well.

      “I don’t think that they’ve made enormous changes to the direction the ministry already had,” he said. “I’m actually impressed with the fact that there is obviously a commitment in the premier’s office that obviously flows into the minister’s office and the ministry generally that supports natural resource development both on the mining side and on the energy side. I was pleasantly surprised, I guess.”


  2. When the history of this government is written, there will need to be a special chapter to document the sad tale of the most pathetic captured Minister of all: Mungall.


  3. I wouldn’t trust Minister Mungal on anything after her cowardly 180 on Site C. An non repairable broken moral compass. Best to see her thrown out of politics by the people she lied too. We the people.


  4. Just wondering how popular Ms. Mungal is now in Nelson? Know a guy who tangled with her a number of years ago when she was playing around in local politics. He caught her on a lie. He said she’s the most vicious and vindictive person and has no problems with telling bold faced lies. The quote “Hell hath no fury than a scorn of a women” has Ms. Mungal in mind.


  5. Guys, guys, don’t you know SNC Lavalin own the BC Liberals and the NDP. They also have great influence on the media and even with our judicial system. Few who challenge SNC, survive in politics and are reduced to being toxic in media interviews.

    The next step is that one is made radio active and woe to any media source in BC that interviews a radio active person.

    The natural gas boys and girls are just beginners in provincial corruption, but they learn fast from the likes of Bombardier Inc. and SNC Lavalin who have “bought” almost all important politicos ore made them toxic to their politcal parties.

    The rest merely being poor imitations of Lord HA Ha or Tokyo Rose…….Berlin Calling……….Radio Moscow………..Fox TV………..CKNW…………..Global…………………


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