Gas royalty review fails to rein in fossil fuel extraction

Thursday, May 19, 2022

Wilderness Committee

VANCOUVER / UNCEDED xʷməθkʷəy̓əm, Sḵwx̱wú7mesh AND səlilwətaɬ TERRITORIES — B.C.’s new gas royalty system eliminates the province’s worst fossil fuel subsidies but creates a brand new one and fails to meet the moment of climate emergency. 

The Wilderness Committee and its allies have pressed the government for years to eliminate the deep well royalty credit and other complex giveaways to fracking companies. Thousands of British Columbians asked the government to use this review to make the province’s most polluting industry pay the true costs of fossil fuel extraction. 

Oil and gas extraction creates about 20 per cent of B.C.’s carbon pollution, more than all other industries combined.

“Today’s announcement ignores the clear wishes of British Columbians who demanded a gas royalty system that aligns with what scientists are desperately telling us is necessary to stave off climate catastrophe,” said Climate Campaigner Peter McCartney. “After a year of deadly climate disasters, this was the moment to signal B.C.’s fracking industry must come to an end and initiate a managed decline of fossil fuel production. The BC NDP government failed.”

Under the old framework, 14 out of 15 of the province’s top fracking companies paid less in taxes and royalties than they received in drilling credits used to reduce their rates. This new system will eliminate those subsidies, but instead, it allows gas producers to pay the bare minimum rate until their drilling costs are paid off. Essentially, the province is absorbing the financial risk of continued fossil fuel production at the very time the world makes every effort to eliminate its use.

“Anybody who took one look at the old system could see it was rigged for fracking companies to fleece the public purse so we’re grateful it’s gone,” said McCartney. “But this latest subsidy offers a money-back guarantee for the most polluting activity in the province.”

Fracking companies furiously lobbied the provincial government over the period of the review, registering more than 450 communications with the government since its launch on October 7, 2021. Despite the royalty review being identified as a climate policy in the CleanBC plan and thousands of comments asking it to include a rising royalty rate and reflect the costs of climate disasters like floods and wildfires, the updated royalty structure is not designed to reduce emissions.

“Gas industry lobbyists have been pounding down the doors of public officials the entire time this review has been underway,” said McCartney. “No wonder the outcome ignores what the ministry heard in its public consultation and bends to the wishes of fracking companies.”


For more information, please contact:

Peter McCartney | Climate Campaigner

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