It is not just royalty reduction programs that caused provincial revenues to crash. The energy ministry has followed a comprehensive program of reducing the public benefit from petroleum and natural gas production. Government has been more successful in implementing this policy than any other.
Norway made a choice to take a material share of oil and gas revenues and distribute the value of its non-renewable resources to citizens over multiple generations. Alberta, British Columbia and Saskatchewan chose to benefit whichever corporations happened to be involved when production of oil and gas took place…
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…
Green Party leader Andrew Weaver spoke to the BC Legislature March 26, 2019. He reported a former insider’s views of why BC natural gas royalty revenues have declined. These were in a letter written by a former civil servant who worked in the oil and gas provincial registry. NDP, Liberals, and corporate media paid almost no attention to Weaver’s speech. Natural resource taxation programs are complex and understanding is difficult because the NDP continues Liberal policies of less-than-transparent public-facing information.
I question why we allow fracking while there are significant knowledge gaps about safety. Authorities will not approve anyone to command flight controls of a loaded aircraft without certainty that person is proven capable of flying safely. In the production of BC natural gas, authorities have been unwilling to discover and accept sscience that suggests fracking is dangerous to workers, residents in gas producing areas and to the earth itself…
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.
Why the NDP has decided to fight teachers and not the fossil fuel industry is a mystery to me. The volume of BC natural gas production has increased substantially in the 21st century but public revenues have declined to almost immaterial amounts.
Politicians in British Columbia’s two major political parties may speak about the need for urgent climate action in Canada. But, their moves to ramp up this province’s fossil fuel production put them firmly in the camp of climate change deniers.
LNG plants will only be constructed in BC if the province provides unprecedented subsidies and tax relief. Inducements include natural gas that is essentially free of royalties and other levies, electricity at a fraction of the cost BC Hydro incurs for new power and, after passage of Bill 10, tax credits that will eliminate provincial income tax that might otherwise be paid by LNG operators.
Excepting BC Green Party leader Andrew Weaver, politicians on both sides of BC’s Legislature are reluctant to discuss natural gas policies. This week, the BC NDP raised gas subsidies. That’s unfortunate because climate change is a critical threat to the world we live in and fossil fuels are a prime cause.
Canada’s remaining non-renewable energy resources are being sold off in an environment of low prices with minimal and declining returns to governments.
One might think British Columbia’s Auditor General would favour maximum information in financial disclosure. Apparently, not in this province.
As is typical of resource management, the regulating ministry sees its prime purpose is to enhance growth and profitability of companies extracting resources. the public share of produced values is no longer material. This cozy relationship costs taxpayers billions of dollars, money that could be spent on renewable energy, transit, daycare, education or many other responsibilities of government.
The case is clear. British Columbia’s Government decided to reduce the public share of natural gas revenues to almost nothing. This is despite substantial growth in the quantities of natural gas being extracted.
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.
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.
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.
Citizens of British Columbia are facilitating and subsidizing production of bitumen from Alberta tar sands. How’s that for an example of hypocrisy by a Government that claims it object to expanded shipments of dilbit through Vancouver’s inner harbour?
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…
Between 2004 and 2017, the quantity of natural gas produced increased by 64% and the royalties, which once measured over $1.5 billion annually, disappeared.