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

Barriere residents make the best of a busted power line incident

“We were told to stay off the lawn in case there was an electrical shock”

Open burning prohibitions now lifted

As of Sept. 18, Category 2 and Category 3 open fires will be permitted within the Kamloops jurisdiction

100 participants turn out for annual Barriere Terry Fox Run

Local residents raise more than $12,000 for cancer research

Barriere couple threatened with eviction after TNRD pays visit

“How can they expect us to leave our land, livestock and belongings behind, unsecured”

VIDEO: A moment to remember during the World Lacrosse Men’s Indoor Championship in B.C.

Diego Hernandez Valenzuela’s team lost, but he felt like a winner Saturday

B.C. Lions hype-man marks 15 years of cheers

Crazy P cheers, chants, bangs his drum and spreads a message of love

PHOTOS: Steller sea lion with plastic around neck rescued on Vancouver Island

Rescue staff determined the plastic band cut the protected animal’s neck approximately two inches

B.C. VIEWS: School officials join fact-free ‘climate strike’

Students, public get distorted picture of greenhouse gases

Handgun crackdown, health spending and transit plans latest campaign promises

Friday was the end of a busy week on the campaign trail

B.C. woman photographs massive ant swarm on Abbotsford driveway

She asked what the ants were doing? The answer: war

Iconic 90s TV show ‘Friends’ celebrates 25th anniversary

The iconic, decade-long television show aired its first episode 25 years ago today

Police arrest B.C. phone scammer linked to illegal call centres in India

Person arrested in Burnaby here on a work visa, says police

Most Read