Gas is flared as waste from a shale formation where gas and oil extraction using hydraulic fracturing, or fracking, takes place in California. Deep well and horizontal drilling is used extensively in fracking, which was used to extract natural gas from 98 per cent of wells brought into production in 2017, according to the B.C. Oil and Gas Commission.David McNew / Getty Images files
Credits issued by the provincial government to natural gas companies could cost taxpayers more than $2 billion in foregone revenue, according to the Canadian Centre for Policy Alternatives.
Between 2016 and 2018, about $1.2 billion in credits for deep-well and horizontal drilling were issued to gas producers, who can use them to reduce future natural gas royalty payments to the government when wells go into production.
B.C. collected $145 million in natural gas royalties in the 2017-18 fiscal year and $164 million in 2018-19, according to the budget and fiscal plan.
The deep well credit program has been in place for 17 years to compensate companies for the higher costs associated with so-called unconventional gas production, which is now so common that the credits are an embedded subsidy to the industry, said CCPA policy analyst Ben Parfitt.
Is the government lowering royalty fees and effectively propping up fossil fuel extraction that would otherwise be unprofitable? wonders a report by the CCPA, a progressive think tank.
The top three credit earners in the gas field in 2017-18 accrued $344 million in credits: Cutbank Encana Partnership, Painted Petroleum and Tourmaline Oil Corp. In all, 26 companies earned $703 million in deep well credits last year, the documents show.
Gas producers have $2.6 billion in credits already on the books, according to B.C.s most recent public accounts report.
These are revenues that are being foregone, said Parfitt, who obtained credit figures with a Freedom of Information request. Down the line, those credits are reimbursed in the form of lower royalty payments.
The program was initiated as an incentive to take on more expensive extraction projects, which Parfitt argues have now become mainstream.
Deep well and horizontal drilling is used extensively in hydraulic fracturing, which was used to extract natural gas from 98 per cent of wells brought into production in 2017, according to the B.C. Oil and Gas Commission.
Virtually all the new wells being drilled in B.C. are deep wells and horizontal wells for to extract natural gas and valuable liquids such as condensate, which is used to dilute bitumen, said Parfitt. But when it comes time to pay the province the taxpayers for those extracting those products, the royalties are reduced.
The governments three-year fiscal plan notes that the royalty rate is expected to decline in the next two years due to increased utilization of royalty programs and infrastructure credits.
What we would like to know is how much those (gas) companies are actually paying in royalties for a publicly owned resource, and its been like pulling teeth with this government, said Parfitt.
What forest companies pay for cutting trees on public lands is freely available to the public online, he noted.
Energy Minister Michelle Mungall defended the program earlier this year, noting that companies can only use credits to reduce their royalty rate, not to avoid royalties altogether. She added, many of the credits that (Green party Leader Andrew Weaver) speaks of will actually likely never be used as the wells are closed.
With a file from Vaughn Palmer
CLICK HERE to report a typo.
Is there more to this story? Wed like to hear from you about this or any other stories you think we should know about. Email firstname.lastname@example.org.
Read the original here:
- Trump to seek nearly 8 percent cut in education spending - Politico - February 10th, 2020
- STAAR Surgical to Report Fourth Quarter and Fiscal Year Results on February 26, 2020 - BioSpace - February 10th, 2020
- Where the Democratic Candidates Stand on Medicare for All - The Fiscal Times - February 10th, 2020
- The IMF reports on the macroeconomic situation of the Gambia for the year 2019 - Freedom Newspaper - February 10th, 2020
- Year In Review: School Board Pushed to Gain Traction on School Equity - Loudoun Now - January 5th, 2020
- New rep's anti-Trump rant has GOP seeing red - The Union Leader - January 5th, 2020
- The Puerto Rican Flag's Evolving Colors Say a Lot About the Island's Relationship With Its Colonial Rulers - Mother Jones - January 5th, 2020
- Niinist calls for mutual respect, end to lies and half-truths in public debate - Helsinki Times - January 5th, 2020
- As the White House and the world reject refugees, here's how to help - Norfolk Daily News - January 5th, 2020
- 'Insulting' number of attacks on NHS staff end up in court - HeraldScotland - January 5th, 2020
- The gathering storm in disability services | Opinion - pennlive.com - January 5th, 2020
- Sense of belonging and trust key to progress: Economist - Telegraph India - January 5th, 2020
- 2020 look ahead: Politics and protectionism to dominate Indian economy - Nikkei Asian Review - January 5th, 2020
- Administration outlines public safety initiatives | Letters to the Editor - The Guam Daily Post - January 5th, 2020
- U.P. reps want to use state-owned aircraft to fly back-and-forth - Marquette Mining Journal - January 5th, 2020
- 'All about the money': How women travelling to Canada to give birth could strain the health-care system - CBC.ca - January 5th, 2020
- aLL: Making body positive, plus size fashion the new normal - India Retailing - January 5th, 2020
- The Review - Business Recorder - January 5th, 2020
- Tax Burden: How Tax Burden Affects Economic Freedom - November 25th, 2019
- Democrats Must Heed The Wisdom Of JFK - FITSNews - November 25th, 2019
- Edited Transcript of PSTG earnings conference call or presentation 21-Nov-19 10:00pm GMT - Yahoo Finance - November 25th, 2019
- Trump's latest gambit: Send asylum seekers to 'Safe Third Countries' that are less than safe | TheHill - The Hill - November 25th, 2019
- Spartz to seek second term - Current in Carmel - November 25th, 2019
- Angelica Ross Has Had a Phenomenal YearAnd Shes Using It to Open Doors to Others - Observer - November 25th, 2019
- The Trump Administration Gutted the Staff Overseeing $1 Billion in Aid to Iraq. A Watchdog Is Raising Red Flags. - ProPublica - November 25th, 2019
- All but one Scottish university fails to record suicide rates, The Ferret reveals - The National - November 25th, 2019
- On the Proposed Budget for Fiscal Year 2020: Letter to the Finance Minister - Freedom Newspaper - November 25th, 2019
- Removing the burden of SOEs on our people - ft.lk - November 25th, 2019
- Anti-abortion group says 45 now-elected Conservative MPs would vote to restrict abortion access heres why pro-choice experts are concerned - Toronto... - November 25th, 2019
- Cooper: Teacher town hall should talk future, not rehash the past - Chattanooga Times Free Press - November 13th, 2019
- Factbox: Key Points of Spanish Pact for Leftist Government - The New York Times - November 13th, 2019
- Letter to the Editor: An Appraisal of Macri - Americas Quarterly - November 13th, 2019
- The U.S. held over 69,000 migrant children in government custody in 2019 - Mashable - November 13th, 2019
- Greg Grandin and the End of the Myth (Review) - NACLA - November 13th, 2019
- Lawmakers huddle to plot next steps on the budget - Politico - November 13th, 2019
- UW pushes for bill to fund project that finds and identifies missing soldiers - The Badger Herald - November 13th, 2019
- Betsy DeVos Might Outlast Them All - HuffPost - November 13th, 2019
- Catholics arrested with other faith groups protesting low cap for refugees - National Catholic Reporter - October 16th, 2019
- Keeping Sudan's Transition on Track - Sudan - ReliefWeb - October 16th, 2019
- Tax policy expert: Closing the tax gap can drive political change - EURACTIV - October 16th, 2019
- Fishing for equity in a regressive tax system - Real Change News - October 16th, 2019
- Andy Puzder: Here are the 7 most ridiculous economic proposals from the Dem debate - Fox Business - October 16th, 2019
- Kansas foster care instability led to surge in runaways, left children vulnerable to sex traffickers - The Ottawa Herald - October 16th, 2019
- What Unites the Right? - National Review - October 16th, 2019
- Andrew Yangs America Should Be Built On The Blockchain - Forbes - October 16th, 2019
- Kramberger: West Islanders have voting options on the fringe - Montreal Gazette - October 16th, 2019
- History is in the past: candidate | News - The Daily Courier - October 16th, 2019
- More than 1,000 Palestinians in Gaza have bone infections after being shot by Israeli forces - Mondoweiss - October 16th, 2019
- EDITORIAL COMMENT: Economy will rebound, lets be patient - Chronicle - October 16th, 2019
- Singapore Economy: Population, GDP, Inflation, Business ... - May 3rd, 2019
- What is meant by "fiscal freedom"? | eNotes - April 16th, 2019
- Fiscal year - Wikipedia - February 24th, 2019
- United Kingdom Economy: Population, GDP, Inflation ... - February 24th, 2019
- Freedom in the 50 States 2017-2018: California Fiscal ... - November 2nd, 2018
- Freedom in the 50 States 2017-2018: Indiana Fiscal Freedom ... - October 12th, 2018
- Freedom in the 50 States 2015-2016 | Overall Freedom ... - August 20th, 2018
- Fiscal Freedom - The Heritage Foundation - August 9th, 2018
- Freedom in the 50 States 2015-2016 | Fiscal Freedom | Cato ... - March 10th, 2018
- Fiscal Freedom - heritage.org - March 3rd, 2018
- Index of Economic Freedom - heritage.org - February 28th, 2018
- Freedom in the 50 States 2015-2016 | Pennsylvania Fiscal ... - February 6th, 2018
- September Will Be a Mess in Congress; Budget, Spending and Debt Fights Ahead - Indian Country Today Media Network - August 25th, 2017
- Austin Petersen: Why I became a Republican - Washington Examiner - August 25th, 2017
- Hood: Focus on long-term growth - Henderson Daily Dispatch - August 25th, 2017
- Focus on long-term growth - The Mountaineer (subscription) - August 24th, 2017
- Report: Brockton lawmaker is 'big winner' from legislative pay raise vote - Enterprise News - August 24th, 2017
- Watchdogs Raise Concerns Over Budget 'Earmarks' | 90.5 WESA - 90.5 WESA - August 24th, 2017
- City Hall staffers see $2.8M in raises through fiscal year 2017 - NY ... - New York Daily News - August 6th, 2017
- GOP leaders enlist Pence, Mulvaney to help with budget woes - Politico - July 14th, 2017
- Freedom Caucus Fires First Volley in New Debt Ceiling Battle | The ... - The Fiscal Times - July 14th, 2017
- The Health Care Security And Freedom Act Of 2017 - Investor's Business Daily - July 14th, 2017
- Trump's looming steel war, explained - The Week Magazine - July 14th, 2017
- US warship sails close to South China Sea island occupied by Beijing - Daily Sabah - July 3rd, 2017
- Commentary: Trump's cuts to education a threat to freedom ... - The Daily Herald - July 3rd, 2017
- GOP Senators join in call to nix August recess to work on looming issues - Fox News - July 3rd, 2017
- Independence Day and Fiscal Responsibility - Summit NJ News ... - TAPinto.net - July 2nd, 2017
- Moderate House Republicans warn of trouble for tax reform - CNBC - July 2nd, 2017
- Fiscal Freedom | Prometheism.net - Part 31 - June 30th, 2017
- Fiscal Freedom | Prometheism.net - Part 30 - June 30th, 2017
- GST will be India's 'economic freedom': Anil Ambani - Economic Times - June 30th, 2017