That money from LNG royalties? You’ll never see it

səl̓ílwətaʔɬ (Tsleil-Waututh), xʷməθkwəy̓əm (Musqueam) and Skwxwú7mesh (Squamish) Territories (Vancouver, B.C.) – The B.C. government is walking away from its promise to make sure British Columbians get a fair share of the money made from selling the province’s natural gas, raising serious questions about the province’s fiscal strategy and its capture by the fossil fuel industry.

Under pressure from climate campaigners to address a fossil fuel subsidy baked into the royalty structure that had cost the province billions in lost revenue, the B.C. government announced a comprehensive review of natural gas royalties in 2021. That review resulted in the cancellation of the Deep Well Royalty Credit, the province’s largest fossil fuel subsidy, an increase in the minimum royalty rate from 3% to 5%, and a commitment to develop a new royalty regime within two years that would guarantee a fairer return on the province’s resources.

That commitment now appears to be broken along with any hope for B.C. residents benefiting from LNG windfall profits. On April 9, Minister of Energy and Climate Solutions Adrian Dix sent a letter to energy and industry stakeholders announcing that the B.C. Government “will not be advancing the Transition-Plus or Enhanced Return royalty curve scenarios further.” The reversal follows an intense lobbying campaign by the fossil fuel industry, including the former Alberta Cabinet Minister.

Canada Oil and Gas Campaigns Director, Sven Biggs, said:

“British Columbians have been sold the fiction that natural gas and LNG exports would deliver meaningful revenue for public services and help address the province’s debt and deficit. Instead, the government has caved yet again to industry lobbyists and have stiffed everyday British Columbians on resources that belong to all of us.”

The timing of the reversal is particularly striking. The province’s most recent budget shows that B.C. made more money from the Lottery Corporation and the Liquor Distribution Branch than it did from natural gas royalties. Additionally, due to the conflict in Iran, oil and gas are making record profits right at the same time they are  pressuring the province for a royalty scheme that would not allow taxpayers to capture any of the value of future price spikes.

By dropping the stronger reform options, the government has made one thing clear: don’t count on natural gas revenue to pay for schools, healthcare, or to get the province out of debt.
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Contact:

Sven Biggs, Canada Oil and Gas Campaigns Director, sven@stand.earth