Worse, the giveaway probably isn’t needed, with the global industry desperate for new gas fields.
Fracking does not need subsidies to be profitable. But we still hand ’em out. Photo via Shutterstock.
We’re in a climate crisis. So why did the B.C. government give oil and gas companies $663 million in subsidies last year so they would produce more fracked natural gas?
The NDP government hasn’t declared a climate emergency. But it commissioned a report that warns of more severe wildfire seasons, water shortages, heat waves, landslides and more.
Despite that, the government handed almost two-thirds of a billion dollars to fossil fuel companies — $130 per person in the province — so they’ll extract more methane, more quickly. (The numbers are all from the always-interesting Public Accounts released last month by the province’s auditor general.)
Which is perverse in a time when we’re warned of climate disaster.
British Columbians own the oil and gas under the ground. Companies pay royalties to the government for the right to extract and sell it.
Since 2003, the B.C. government has been putting natural gas on sale. It has cut royalties to subsidize the industry’s road construction and reward any operators who drilled in the summer.
And most significantly, it started offering the gas at a deep discount for companies that drilled “deep wells.” The industry argument was that they were riskier and more expensive; the government had to sell the gas more cheaply to encourage companies to drill. It increased the discounts in 2009 and 2014, giving even bigger breaks to the fossil fuel companies. (Who were also big BC Liberal donors.)
The discounts — subsidies from taxpayers who have to pay more to make up for the lost revenue — have enriched fossil fuel companies for more than a decade. MORE
County Sustainability Group 