Category: Natural Gas

Natural resource giveaway

British Columbia sees itself in competition with Alberta to attract gas exploration and production companies. As a result, both provinces have been in a race to the bottom. By giving away its natural gas resource, BC has reached bottom and through its plan to provide below cost electricity, the Horgan Government policy is to pay producers to remove this natural resource. Quite a change from the NDP’s promises before the 2017 election.

Paying $185,000 for each job

BC’s fossil fuel industry benefited from credits worth $902 million in fiscal year 2018 and $4.2 billion in the past five years. Each of the jobs in oil and gas extraction cost BC taxpayers $185,000. A similar amount spent on reducing dependence on fossil fuels would have been more effective in creating jobs and protecting the environment.

Hiding financial information and misleading the Legislature

Tax expenditures are subsidies delivered through the taxation system. These promote policy goals of government but are subject to far less scrutiny and disclosure than direct spending. The primary beneficiaries of tax expenditures are Canada’s wealthiest citizens and corporations. In British Columbia, natural gas producers, many with foreign ownership, are milking a very generous cash cow.

Unaffording the affordable

Some BC politicians are not bright. Either that, or they are thoroughly dishonest. Maybe both. Liberals saw natural gas revenues drop from $11.5 billion in the five years ended March 2011 to $0.8 billion in the five years ended March 2017…

Corporate interest outranks public interest

Many citizens — although not In-Sights readers — will be shocked to learn that credits owed natural gas producers soared by more than $1 billion from April to November 2018. That increase is two and a half times more than the total gas royalties received by government in the three fiscal years ended March 2018. The $3.2 billion balance owed to producers ensures that royalty revenues will remain at paltry levels throughout the Horgan Government’s present term.

The race to the bottom is over

In the fiscal years 2016 and 2017, natural gas royalty payments totalled $291 million. However, credits owed producers increased $748 million so, if the province bothered to record these obligations as was recommended by the Office of the Auditor General, the royalty account had a two-year deficit of $457 million. A decade ago, two fiscal years —  2006 and 2007 — produced gas royalty payments of $3.7 billion (2017 dollars) from substantially less production.

Taxing and subsidizing carbon

While BC consumers of carbon pay an ever increasing tax — $10 billion since 2009 — carbon producers are enjoying billions of dollars in subsidies. In the fiscal years 2007 through 2017, natural gas companies quietly received benefit of tax expenditures worth almost $8 billion dollars…

Ending natural gas giveaways?

The four monthly auctions of gas rights held since John Horgan became Premier indicate the industry accepts it must pay more than it did under Christy Clark. However, the gas industry’s investment in Ms. Clark paid off handsomely while she sat at the head of the Liberal Cabinet table.

LNG facilities: siting, safety, regulation

When British Columbia conducts LNG negotiations behind closed doors, without public statements of principles or bargaining frameworks, citizens should worry. I have written about our government’s willingness to provide the gas industry with 9-figure production subsidies and Liberal aversion to collection of natural gas royalties but there is another subject to consider. It is the safety and security of LNG facilities…

BC’s natural gas revenues

The Auditor General’s Office has served British Columbia well but the outgoing government deprived it of resources that would have increased audit effectiveness. Politicians are inclined to inhibit the actions of authorities that might offer criticisms. Christy Clark did that but we can hope Premier Horgan will do the opposite.

A clear choice

There is one comparison that should be remembered by BC voters. It is this: In fiscal year 2001, British Columbia took in $1,249,000,000 in natural gas royalties. According to the Bank of […]

The Boren effect

If the liabilities owing producers were recorded routinely, provincial natural gas revenue would be less than zero in two of the last four years. In current dollars, BC’s gas income, including rights sales, declined by more than $2.5 billion, comparing 2016 to 2001. Of course, the volume of production was much higher in 2016.