B.C. Green Party leader Andrew Weaver ridiculed the minority NDP government last week for its 害羞草研究所済enerational sellout害羞草研究所� of exporting the province害羞草研究所檚 abundant natural gas reserves to Asia.

害羞草研究所淚 sat opposite for four years as I watched the members now in government hurl abuse at the B.C. Liberals,害羞草研究所� Weaver roared in debate over Premier John Horgan害羞草研究所檚 latest tax breaks to seal the huge LNG Canada deal in northern B.C.

Weaver summed up his objection to the NDP害羞草研究所檚 liquefied natural gas policy this way.

害羞草研究所淭hat害羞草研究所檚 the base level of politics and natural gas in B.C. 害羞草研究所榃e害羞草研究所檙e going to try to deliver what Christy Clark couldn害羞草研究所檛.害羞草研究所� The only way to do that is to take the giveaway 害羞草研究所� to a whole new level like we害羞草研究所檝e never seen in Canada in terms of corporate welfare.害羞草研究所�

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害羞草研究所檚 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.

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Weaver害羞草研究所檚 accusation of a giveaway focuses on B.C.害羞草研究所檚 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害羞草研究所檚 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害羞草研究所檚 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.害羞草研究所檚 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.害羞草研究所檚 total tax rate on new natural gas investments is 31.9 per cent, fifth highest of producing regions in North America. Only Saskatchewan害羞草研究所檚 is higher among provinces.

Then there are the environmental impacts of B.C.害羞草研究所檚 shale gas boom, including hydraulic fracturing and greenhouse gas impact. I害羞草研究所檒l examine those in a future column.

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

tfletcher@blackpress.ca
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