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.

Just Posted

Drivers injured, children OK after school-bus crash in Surrey

Incident happened near 68th Avenue and King George Boulevard

Police release photos of suspect in attempted gas station robbery in Surrey

Surrey RCMP say suspect took off without taking any money after he bear sprayed employee

Non-Semiahmoo First Nation members opt out of footing connection costs: chief

Long-term resident who can’t pay $50K fee, says he ‘hasn’t a clue’ where to go now

White Rock’s Memorial Park re-opens to the public without fanfare

Formal ceremonies expected to take place in late May or early June

PHOTOS: Fabric-formed concrete strengthens new Surrey gallery show and house under construction

Designer Omer Arbel’s work in ‘Particles for the Built World’ exhibit and at South Surrey home

Eggs in South Surrey bald-eagle preserve hatch

Douglas-area eagle nest livestreamed online

B.C. awaits Kenney’s ‘turn off taps,’ threat; Quebec rejects Alberta pipelines

B.C. Premier John Horgan said he spoke with Kenney Wednesday and the tone was cordial

Federal government extends deadline to make Trans Mountain decision to June 18

The National Energy Board endorsed an expansion of the Trans Mountain pipeline on Feb. 22

Prince George sweeps to first-ever BC Hockey League crown

Spruce Kings beat Vernon Vipers 3-1 in the Okanagan Wednesday for 13th straight playoff win

Hwang’s first MLS goal lifts Whitecaps to 1-0 win over LAFC

Vancouver picks up first victory of season

Man identified in Vancouver’s fourth homicide of the year

30-year-old man was not known to police

RCMP locate missing Colony Farm psychiatric patient

Patient left last week on day pass from the hospital in Coquitlam

600 volunteers sign up to recall Maple Ridge MLAs over housing problems

Organizer urges province to reconsider position on Burnett modulars

Child-proof your windows ahead of warm weather: B.C. expert

Fifteen children were taken to BC Children’s Hospital for falls in 2018

Most Read