Lots of gas on low-carbon future!

This week in question period I and my BC Green Caucus colleagues, Andrew Weaver and Sonia Furstenau, focussed our line of questioning on the natural gas industry.

In late March, the provincial government announced an aggressive package of incentives to LNG Canada to attract a final investment decision on their project in Kitimat, BC. In fact, the deal was sweater than the sweetheart deal offered by the BC Liberal government.

Doubling down on sunset industries

As it was widely publicized at the time, the province announced a $6 billion handout in addition to capping the carbon tax and the forgoing the PST the government would collect. And, that is just the provincial promises; the companies hand is out to the federal government as well.

If they get their wish from the Feds, duty-free pre-fabricated steel, then they will be able to construct large components of the project offshore. As a result, much of the highly touted $40 billion investment will be made elsewhere, vastly lowering the direct economic and job creation benefits to British Columbia.

Meanwhile the province has also committed in our confidence and supply agreement to,

• Implement an increase of the carbon tax by $5 per tonne per year, beginning April 1, 2018 and expand the tax to fugitive emissions and to slash-pile burning.
• Deliver rebate cheques to ensure a majority of British Columbians are better off financially than under the current carbon tax formula.
• Implement a climate action strategy to meet our targets.

 

LNG DEVELOPMENT AND
GREENHOUSE GAS EMISSION TARGETS

A. Weaver:

Government has committed to reducing greenhouse gas emissions by 40 percent from 2007 levels by 2030 and by 80 percent from 2007 levels by 2050. This is why the government’s continued desperate push for LNG is so problematic.

LNG Canada’s proposed four-train LNG facility would add eight to ten megatonnes of carbon dioxide equivalent. That’s more than 50 percent of all of British Columbia’s present industrial emissions. And they’d add that to B.C.’s total emissions.

Our targets are such that by 2050, British Columbia can emit only 12.9 megatonnes of carbon dioxide equivalent. At about 9.6 megatonnes, LNG Canada would yield the single largest source of those emissions. That’s three-quarters of all of British Columbia’s allowable emissions in just one LNG facility.

My question is to the Minister of Environment and Climate Change Strategy. How is it possible for British Columbia to meet its greenhouse gas reduction targets in light of these numbers?

Hon. J. Horgan:

I thank the Leader of the Third Party for his question. I know his passion for climate action, and his reason for being in this House is that very issue.

I’m committed, as I said during the election campaign and as I’ve said since forming the government…. We are going to put in place targets, by 2030, that see our emissions go down by 40 percent from what they were in 2007. I’m committed to doing that.

At the same time, when investors come calling with proposals, it’s appropriate that we talk to them. It’s appropriate that we look at the fiscal framework and that we put in place the terms of engagement. That’s why I’ve said to the LNG community: “If you’re going to employ British Columbians, there’s going to be a fair return to B.C. for access to our resource. You’re going to work with Indigenous people in partnership.” The member for Skeena can talk to us about that. “If you’re going to ensure that you assist us in getting to our greenhouse gas objectives, we welcome that investment.”

Mr. Speaker:

The Leader of the Third Party on a supplemental.

A. Weaver:

I do appreciate the response from the Premier. Nevertheless, it seems to me that rhetoric here in B.C. is not too dissimilar from what we’re hearing nationally. On the one hand, Prime Minister Trudeau claims we need to build new pipelines and increase oil sands production multifold in order to reduce greenhouse gas emissions. Our government thinks we need to increase industrial emissions by 50 percent in order to meet our greenhouse gas reduction targets.

Look, LNG Canada would not build a new LNG facility today just to tear it down tomorrow. The facility will be built to be around for decades to come. That means that for all other aspects of the British Columbia economy, emissions would have to drop by 52 percent by 2030 and — get this — 95 percent by 2050. Government is essentially saying that this one LNG plant and these 200 jobs are more important than everything else in our economy.

My question to the Premier is this. Is he prepared to tell Rio Tinto Alcan, Teck, Lafarge, Canfor, Catalyst and even the Greater Vancouver Sewerage and Drainage District that they all have to shut down because British Columbia’s emission budget is all but used up by that one LNG Canada facility?

Hon. J. Horgan:

Well, we have no final investment decision by anyone when it comes to developing liquefied natural gas, and the members on that side will know that full well. They promised dozens and dozens of them, and none of them materialized.

I don’t want to be glib with the member’s question because he’s absolutely correct. If we are going to meet the targets that we have set as a Legislature — or will be codified by the Legislature in the days, weeks and months ahead — we’re going to have to have the hard discussion with all members of society, not just the industrial sector but our families, our communities. Everyone’s going to have to weigh in and do their part to reduce emissions.

This is the challenge of our generation. I’m not telling the member anything he doesn’t already know. I’m committed, as the leader of this government, to realize those objectives, and I’m going to continue to fight for that.

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Tuesday (April 10, 2018)

NATURAL GAS ROYALTIES

S. Furstenau:

For a time in B.C., we received huge annual royalty revenues from our natural gas sector that helped pay for essential public services, but those days are gone. Even worse, B.C. has been essentially giving away gas worth billions without a fair return to the public treasury.

As Marc Lee writes, royalty regimes are “supposed to capture a fair share of the economic rent” for the extraction of resources that are owned by the public. “This is particularly important for non-renewable resources like gas,” because once they’re extracted, they’re gone forever.

While B.C. gas production has continued to increase, the royalty revenues in this province have plummeted from $2 billion in 2005 to $139 million in 2015. We are giving away more gas for less money while barrelling past our climate commitments.
To the Minister of Energy, Mines and Petroleum Resources, what specific steps has the minister done to remedy this staggering economic and generational sellout?

Hon. M. Mungall:

Thank you to the member for the question. However, the information she is presenting is not quite accurate. I’ve offered to provide the Green caucus, several times, with a briefing on this particular issue. That offer still stands, and I’m very happy to take the time whenever they’re available to get the information.
What we’re talking about is the deep-well royalty program. I just want to remind the member that last year we received $145 million in royalties.

But what’s important to this program, which provides credits, is that not all credits are actually realized. While credits might be banked, they might not actually be claimed. There’s a variety of reasons that determine that.
One of the important things to note in all of this is that minimum royalty payments are required. They ensure that a company always contributes to the province, no matter how many credits they may have.

Mr. Speaker:

House Leader, Third Party, on a supplemental.

S. Furstenau:

I’d like to point out that I talked about the revenues that we have received as a province. As our gas production has increased, our revenues have plummeted from $2 billion in 2005 to $139 million in 2015, with more gas being exported from our province. I’m deeply concerned that the minister doesn’t find this as troubling as we do.

The deep-well royalty program was designed to enable the provincial government to share the cost of innovation for drilling in B.C.’s deep-gas basins. It has since transformed into a massive subsidy to incentivize horizontal drilling, including shallow wells and hydraulic fracturing. We already know that B.C. earns very little from its natural gas royalties. Worse still, there is more $3.2 billion in unclaimed credits that can be applied against future royalties.

The minister doesn’t seem too concerned that we have a $3.2 billion fracking debt. However, I think that should be a concern for every citizen in B.C.

To the Minister of Energy, Mines and Petroleum Resources, will the minister terminate the deep-well royalty program and focus on supporting innovation in the B.C. economy that will lead our province towards a low-carbon economy?

Hon. M. Mungall:

The member would likely know that we have commenced a hydraulic fracturing review scientific panel that is looking at the practice of hydraulic fracturing, specifically to look at those innovations that she mentioned.
However, when it comes to the deep-well royalty credit program, again, her characterization is not quite accurate. I’m more than happy to ensure that they get a full briefing so they understand how those credits accumulate and then how they actually are applied on a day-to-day basis within our province to ensure that not only is our natural gas sector competitive globally but that we’re also ensuring that British Columbians receive the return on their investment and on their natural resources.

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Wednesday (April 11, 2018)

NATURAL GAS ROYALTIES

A. Olsen:

There’s a global glut of natural gas supply. Despite what many in this House claim, oil and gas activities play a minor role in B.C.’s economy. As my colleagues have been raising in question period this week, the net revenue collected from the natural gas sector in British Columbia has plummeted in recent years.

In 2016, British Columbia lost $383 million from exploration and development of our gas. Why? It’s because the tax credits earned were more than the income received from the net royalties and rights tenders combined. Again in 2017-2018, we gave companies more through royalty programs and credits than we collected in royalties, fees and levies combined — all of this in the context of an urgent need to transition to a low-carbon economy.

My question is to the Minister of Energy: why is your ministry continuing this unbelievable giveaway?

Hon. M. Mungall:

As I was saying yesterday, in terms of our royalty credit program here in British Columbia, it’s very important to note that the credits that are accumulated are not necessarily disbursed. They’re not necessarily claimed by companies.
Importantly, I will repeat again that the minimum royalty payments ensure that a company always contributes to the province, no matter how many credits they may have. In terms of this program, how it is working is ensuring that British Columbians are getting a fair rate of return on their resources.

Mr. Speaker:

The member for Saanich North and the Islands on a supplemental.

LNG DEVELOPMENT AND
TRANSITION TO LOW-CARBON ECONOMY

A. Olsen:

Do we, the present generation, not owe future generations a sustainable economy, a healthy environment and a safe, stable society? How much is that worth? We are currently selling out the well-being of our kids for next to nothing.

The current course of the Energy Ministry is to expand the corporate welfare program started by the so-called free enterprisers on the other side. It’s astounding. Oil and gas plays a minor role in British Columbia’s economy but is responsible for a major portion of greenhouse gas emissions. Yet here we are offering handouts to LNG like it’s the future our kids should inherit. Our focus should be on becoming a leader in climate solutions. That is the future of our economy.

My question is to the Minister of Energy. We know that the health and well-being of our children is at stake. So why is your ministry doubling down on the economy of yesterday instead of embracing transformation and rapidly transitioning to a low-carbon economy?

Hon. M. Mungall:

Thank you to the member for the question. There are a few points that he makes that I have to differ with him on — for example, natural gas. Natural gas heats more than 50 percent of British Columbian homes. It plays an important role in our communities, in our broader province, in our economy, and in the wintertime — I know, for my home and, I know, for most members’ homes — it plays a very important role.

I’d also add that in terms of making sure that we’re moving to meeting our climate targets and having an economy based on ensuring that we’re reducing our greenhouse gas emissions, unlike the previous government, this government is doing that. When we put together….
Interjection.

Mr. Speaker:

Member.

Hon. M. Mungall:

We’ve put together a climate council that is looking to build our climate action plan, and when we get that plan, we’re actually going to do something that the previous government didn’t do. We’re going to implement it.

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Thursday (April 12, 2018)

[Video will be uploaded soon]

TRANSITION TO LOW-CARBON ECONOMY

S. Furstenau:

This interlude from Kinder Morgan, brought to you by the B.C. Greens.

Government data presents a shocking trend in B.C.’s economy. While our gas extraction has doubled in the last 15 years, revenues to the province have plummeted by 90 percent. The resource belongs to the people of British Columbia, and we can only use it once. We are selling out our future generations. We’ve given away their wealth and their future ability to use these non-renewable resources strategically.

This is a lose-lose-lose for the people of B.C. There is another way. My colleagues and I are challenging the ministry to do better.

Through you, hon. Speaker, to the Minister of Energy, Mines and Petroleum Resources: can the minister please identify what strategic advantages B.C. has that will help us transition to a low-carbon economy and when will she start acting on them?

Hon. M. Mungall:

Thank you to the member for the question. I couldn’t agree more that British Columbians deserve to get a fair rate of return on their resources, and that’s exactly what this government is determined to do.

It’s one of our prime commitments to British Columbians — that we need to ensure that the resource industries that we have that are so prosperous and so beneficial to this province, that British Columbians are getting the best rate of return that they possibly can. That’s exactly why, when we put forward our four conditions, which we’ve had in place since 2011 on the LNG industry, we included that very fact.

We are looking at a variety of tools to make sure that that is the case, including with the LNG industry and with the natural gas industry, which the member mentioned.

Going forward, one of the things that I think that differentiates us even more than making sure that we have a good fair rate of return for our citizens in this province, is that this government is dedicated to ensuring that we are also meeting our climate targets. We have a climate action secretariat in place for that, and the biggest difference between us and the former government is we’re actually going to listen to their recommendations and we’re going to implement them.

Mr. Speaker:

House Leader, Third Party, on a supplemental.

S. Furstenau:

Saying things and doing them are fundamentally different things, and we’d like to see evidence of how these climate targets are going to be met with an actual climate action plan, and we’d like to see a change in how we are giving away these resources.

We have a $3.2 billion credit deficit on the books right now. Yesterday my colleague for Saanich North and the Islands asked the Minister of Energy if she thinks we have any responsibility for the well-being of future generations in terms of the quality of the environment that we leave behind. The minister, in response, said natural gas heats a lot of homes in B.C.

Let’s try again. In her mandate letter from the Premier, the minister is tasked with reinvigorating the innovative clean energy fund to boost investments in groundbreaking new energy technologies and climate solutions.

Through you, hon. Speaker, to the Minister of Energy, Mines and Petroleum Resources: what concrete measures is your ministry taking to ensure that B.C. is embracing transformation while rapidly transitioning to a low-carbon economy?

Hon. M. Mungall:

There’s a variety of programs going on in my ministry. For example, the zero-emissions vehicle program. We are promoting a shift from carbon-based fuel to electric fuel for our transportation sector. Considering that’s our largest contributing factor to our climate emissions, I would say that is a very important, very concrete activity that this government is taking, and we are taking it very proudly.