Natural Gas

Privatizing natural resources, by stealth

The majority of subsurface petroleum and natural gas resources are theoretically owned by the citizens of British Columbia. For years, government held monthly auctions of rights to develop these fuels.

Since 1997, monthly rights sales produced about $13 billion in today’s dollars. Additionally, government assessed well more than $20 billion in gross royalties.

Income from natural gas rights and royalties in fiscal year 2009 was $3.75 billion ($4.5 billion in 2020 dollars), equivalent to 10% of the province’s total revenues.

But the revenue streams have run dry.

The methods of revenue generation changed abruptly in 2011, when Christy Clark became Premier, her transition assisted by gas industry titan and SNC-Lavalin Chair Gwyn Morgan.

Royalties were slashed, largely by royalty reduction programs that were originally designed to encourage development of marginal wells, but now apply to nearly every form of gas production.

Additionally, more and more exploitation rights were granted by administrative acts rather than by competitive bids. In March 2020, using coronavirus as an excuse, monthly rights offerings were suspended entirely. Production and exploration continued but, somehow, remote bidding could not.

In fiscal year 2020, the province expects $166 million in revenue for natural gas rights and royalties. That amounts to 0.28% of the province’s total revenues.

Not every natural gas value is dropping for the public. In August, Fortis is applying a 47% increase to the price it charges consumers for natural gas.

Despite the NDP promise that resource development must provide a fair return to the public, John Horgan’s Ministry of Energy, Mines and Petroleum Resources functions just as it did under Christy Clark.

When NDP appointed Deputy Minister Fazil Mihlar was employed by the Fraser Institute, he argued for much less government involvement in the affairs of business and promoted the idea that natural resources should be owned privately, with development unimpeded by regulation or taxation.

I suspect Mihlar has gained more satisfaction by influencing government policy from within, rather than without.

To paraphrase Lyndon Johnson, “Better to be inside the tent pissing out, than outside pissing in.”

Of these four promises by the Horgan Government, three are lies.

Categories: Natural Gas

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10 replies »

  1. Six years later Imperial Metals via Mt Polley is still polluting Quesnel Lake 24/7 and could do the same in the Donut Hole near Manning Park.
       Cancel TMX as it operated at 15% capacity for most of the years with a few at 50%.
      Site C, California volts vs our food security.
        Somehow we must get the rules changed so the politicians will do what’s right instead of them aiming at a Corporate Welfare Buddy Future Considerations Retirement Plan.

    Liked by 1 person

  2. There is only one political party , corporate party. Cut bus passes for the disabled and give billions to their future employers. It’s disgusting.


  3. With the NDP it is union jobs, jobs, jobs, and Horgan and company will sell BC’s birthright to secure union jobs, jobs, jobs for his all important union friends. This just like Gordon Campbell and Christy Clark who sold out this province to corporate and criminal friends.

    when one looks at it, there is not much difference between the two political parties except a hell of a lot more hypocrisy for one.

    Liked by 2 people

    • Global: “FortisBC says it has been granted B.C. Utilities Commission approval to increase the price it charges on natural gas. The cost of gas itself will jump about 47 per cent…”


  4. Why do you say 47% when the Fortis site says this; “FortisBC has received approval from the British Columbia Utilities Commission to increase the cost of gas for all its natural gas customers in the Mainland and Vancouver Island. As of August 1, 2020, the natural gas bill for these customers will increase by approximately 9 per cent, depending upon consumption.”


    • I wrote, “Fortis is applying a 47% increase to the price it charges consumers for natural gas.”

      That is exactly what is reported.

      Fortis bills include a few different elements:

      – basic charge,
      – delivery,
      – storage and transport,
      – carbon tax,
      – clean energy levy,
      – GST, and
      – cost of gas.

      It is the last item that is increasing 47%. Other charges rise at lesser amounts.

      The actual cost of gas at my house in 2019 was about 15% of the total Fortis billings. Clearly, even if the gas was free, there are costs to deliver it from the gas fields to our homes.


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