B.C. Green Party leader Andrew Weaver debates in the B.C. legislature. His efforts to stop new tax incentives for LNG Canada have been voted down 83-3 by the NDP and B.C. Liberals. (Hansard TV)

B.C. VIEWS: Is the NDP giving away our natural gas reserves?

Andrew Weaver again denounces the government he put in power

B.C. Green Party leader Andrew Weaver ridiculed the minority NDP government last week for its “generational sellout” of exporting the province’s abundant natural gas reserves to Asia.

“I sat opposite for four years as I watched the members now in government hurl abuse at the B.C. Liberals,” Weaver roared in debate over Premier John Horgan’s latest tax breaks to seal the huge LNG Canada deal in northern B.C.

Weaver summed up his objection to the NDP’s liquefied natural gas policy this way.

“That’s the base level of politics and natural gas in B.C. ‘We’re going to try to deliver what Christy Clark couldn’t.’ The only way to do that is to take the giveaway … to a whole new level like we’ve never seen in Canada in terms of corporate welfare.”

Weaver has expressed fury since Horgan surprised everyone last fall by announcing his government had reached a deal with LNG Canada partners Shell, PetroChina, Mitsubishi and Korea Gas to make the largest private investment in Canadian history. Petronas, the Malaysian energy giant that walked away from a similar project for Prince Rupert, soon bought in to LNG Canada’s Kitimat shipping complex and Pacific GasLink pipeline to bring the vast gas reserves from the Dawson Creek area to the coast for compression and export as LNG.

READ MORE: B.C. gas investment taxes second highest in Canada

READ MORE: B.C.’s carbon tax costs more than the natural gas

Weaver’s accusation of a giveaway focuses on B.C.’s deep-well royalty credit program, which allows gas producers to deduct credits from royalties once qualifying shale gas wells start producing. He notes that the accumulated credits for B.C. producers are now more than $3 billion, as thousands of wells have reached into deep shale formations for decades worth of gas production.

The latest B.C. budget projects natural gas royalty revenues of $229 million for the current year and $206 million next year. Weaver’s argument is that much of this revenue is clawed back by the deep well credit, and then Shell and other producers get to use nearly free gas to power the refrigeration and compression plants used to turn gas into liquids for loading on ships.

Energy Minister Michelle Mungall reminds me that there is a minimum royalty that all producers must pay. It’s not much: three per cent on gas revenue for wells deeper than 1,900 metres, and six per cent for wells shallower than 1,900 metres.

Royalties also vary with price, which has dipped to historic lows as B.C. gas remains landlocked and our only export customer, the U.S., has developed and started exporting its own shale gas reserves. I reported last fall on the surprise that hit natural gas heating customers when B.C.’s latest increase in carbon tax made the tax more than the charge for the gas they used.

Horgan and Mungall, like former premier Clark and former minister Rich Coleman before them, emphasize that B.C. is in a fiercely competitive market that includes Russia, Qatar and other huge gas producers. Either we compete or we wind down the biggest industry in northern B.C.

For an independent look at whether B.C. is giving away its gas, University of Calgary economist Jack Mintz has a new study that finds B.C.’s total tax rate on new natural gas investments is 31.9 per cent, fifth highest of producing regions in North America. Only Saskatchewan’s is higher among provinces.

Then there are the environmental impacts of B.C.’s shale gas boom, including hydraulic fracturing and greenhouse gas impact. I’ll examine those in a future column.

Tom Fletcher is B.C. legislature reporter and columnist for Black Press Media. Email: tfletcher@blackpress.ca


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC legislaturelng canada

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Comments are closed

Just Posted

Police investigate July 2 homicide in Houston

Man succumbed to injuries at Pearson Road residence

QUIZ: Put your knowledge of Canada to the test

How much do you know about our country?

RCMP patrol of smokehouse sparks concerns by Wet’suwet’en hereditary leader

Hereditary Chief Woos says he is feeling uneasy after RCMP attended the smokehouse with rifles

Regional District approved for business liaison grant to assist with COVID-19 recovery

Grant offers each of the northern development regions up to $75,000 in funding

Lines getting painted

June 25 the Houston Mall had their parking lot painted with parking… Continue reading

B.C. records 31 new cases, six deaths over three days due to COVID-19

There are 166 active cases in B.C., 16 people in hospital

B.C. highway widening job reduced, costs still up $61 million

Union-only project scales back work to widen Trans-Canada

Greater Victoria nanny pleads guilty to child porn, sexual interference charges

Johnathon Lee Robichaud pleaded guilty to slew of sex crimes

Victoria man dies after skydiving incident on Vancouver Island

34-year-old had made more than 1,000 jumps

BC Wildfire Service to conduct night vision trials for helicopters in South Okanagan

This technology could assist with future firefighting operations

Following incident at sea, fishing lodge says it will reopen despite Haida travel ban

QCL reopens July 10, says president; Haida chief councillor describes ‘dangerous’ boating encounter

Kamloops RCMP officer’s conduct under review after blackface jokes on social media

Meinke’s Instagram is private and it’s unclear when the posts were made

NHL says 35 players have tested positive for COVID-19 since June 8

Positive rate for the league is just under 6%

Most Read