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

West Kelowna fire under control

A fire broke out just above Bear Creek Provincial Park Monday

Kelowna Boat Show highlights abandoned boat program

The 24th annual Kelowna Boat Show hits shores April 27 and 28.

Kelowna’s Korczak, Canada en route to U18 quarter-finals

Kaedan Korczak and Team Canada play Latvia Thursday

‘Cutthroat’ sport of wine tasting happening now in the Okanagan

BC Tasting Games are underway with competitions in three Okanagan communities.

Kelowna pimp faces 4 year sentence

In court the details of how Simon Rypiak lured 4 women into prostitution revealed

VIDEO: Okanagan fire victim Amy Hansen speaks out on the loss of her four pets

A gofundme page has been started for Hansen, with $1,140 raised of a $5000 goal to help her rebuild

WATCH: South Vancouver Island shooting an ‘isolated and targeted’ incident, say police

One person in custody, another fled following shooting and crash on West Shore

Woe, Canada: Bruins down Maple Leafs 5-1 in Game 7

No Canadian teams left in Stanley Cup playoffs

Defence accuses officer of ‘incompetence’ in trial for B.C. man accused in daughters’ murder

Double murder trial for the Victoria father accused of killing his two young daughters continues

Should B.C. parents receive money if they make sure their kids are vaccinated?

New survey looks at public opinion around government’s role in forcing immunizations

Okanagan history in pictures

Grand opening of downtown Vernon Safeway store from 1965

Okanagan firefighter steps up to challenge

Andrew Haak will be one of hundreds of firefighters taking part in the Firefighter Stairclimb Challenge in Calgary on May 5

SPCA investigating hen cull at Shuswap egg farm

Egg farm regulator says they are confident cull at was done properly

Okanagan Rail Trail a popular place

Thousands pack North Okanagan section over long weekend

Most Read