Today in the Legislature I rose in Question Period to question the Minister of Energy Mines and Petroleum Resources about the need for Site C in light of a nonexistent LNG industry. I further questioned whether or not she would defend the interests of British Columbians and ensure a fair price for our natural gas assets by evoking a cancellation provision with the Progress Energy royalty agreement (as Petronas has not made a positive final investment decision).
In addition, in April, 2015 when Bill 23, The Miscellaneous Statutes Amendment Act was introduced by the BC Liberals, the BC NDP and I spoke out about profoundly troubling changes to the way Royalty Agreements are managed under the Petroleum and Natural Gas Act. Under these changes, the Minister was granted the power to enter into secret agreements with oil and gas companies without the approval of Cabinet. I felt it was important important to see whether the Minister would agree to not undertake such agreements.
Below I reproduce the video and text of the exchange as well as a copy of our accompanying press release.
A. Weaver: I think I’m living in some kind of a fantasy world here in question period today. It’s quite remarkable.
To entice LNG projects to British Columbia in 2014, the previous government promised proponents electricity rates of 8.3 cents per kilowatt hour, but that wasn’t good enough. So two years later, they dropped the rate to 5.4 cents per kilowatt hour.
Now, we know the actual cost of power from Site C, if the government continues with this project. It will be over ten cents a kilowatt hour, while residential customers today are paying 8.6 cents at tier 1 and 12.9 cents per kilowatt hour at tier 2.
Not only are residential customers paying nearly twice what hypothetical LNG companies would pay, they’re also financing Site C to provide electricity to a nonexistent industry through a business model that will lose about five cents for every kilowatt hour of energy produced. That’s B.C. Liberal economics for you. Fortunately, for the members of that party, they have one leadership candidate who hasn’t run on their abysmal economic record.
My question to the Minister of Energy, Mines…
Mr. Speaker: Members, we shall hear the question, please.
A. Weaver: My question to the Minister of Energy Mines and Petroleum Resources is this. Will government admit that the only reason to continue with the construction of Site C is to provide ratepayer-subsidized power to a nonexistent LNG industry?
Hon. M. Mungall: Thank you to the member for the question. He is aware of the process that is undergoing right now. We’ve just completed the B.C. Utilities Commission review of Site C. That report was delivered just a week ago, and this government has announced that we are now moving into our analysis, and then we’ll be doing proper deliberations.
Next week myself and the Minister of Indigenous Relations and Reconciliation are actually going to be formally consulting with Indigenous communities and First Nations leaders who are directly impacted by Site C. Saying anything at present about future decision-making would likely prejudge that, and I’m just not going to be doing that.
A. Weaver: The previous government did everything industry asked them to make their LNG dreams a reality. “Jump.” “How high? How often? Where to? How many times?” They wanted to deliver unicorns to each and every one of our backyards, and when they couldn’t squeeze water from a stone, they tried desperately to squeeze even harder.
They even changed the natural gas royalty legislation so that the minister could negotiate sweetheart deals in secret. They signed a deal with Progress Energy.
Mr. Speaker: Members.
A. Weaver: They signed a deal with Progress Energy and its partners that would have locked in low royalty rates for years and cost B.C. millions. But that contract had an escape valve. One of its conditions was a positive final investment on Pacific Northwest LNG by June of 2017. Yet Petronas decided to kill the project.
My question to the Minister of Energy Mines and Petroleum Resources is this. When will the government stand up for the people of B.C., demand a fair price for our natural gas assets and terminate the long-term royalty agreement with Progress Energy? And will the minister confirm, for the record, that this government will not negotiate royalty agreements in secret with any other gas companies?
Hon. M. Mungall: I think there’s no doubt that anybody on this side of the House would agree with the member that the previous government made large promises and absolutely failed to deliver on those promises. I think we’ve canvassed a few of those: the jobs with LNG, the LNG prosperity fund, the “Debt-free B.C.” Families first, as well.
That being said, moving forward, we have committed to work with industry but also to make sure that our regulatory oversight bodies are doing their due diligence, as well, and that they have the resources to do so. On this side of the House, we want to make sure that government is working for all British Columbians and that we’re all together building a better B.C.
November 8, 2017
For immediate release
Site C, Hydro finances demonstrate need to reverse trend of failed Liberal economic management: Weaver
VICTORIA, B.C. – Andrew Weaver, leader of the B.C. Green Party, is calling for an overhaul of BC’s approach to the energy file. Weaver says that the politicization of energy has got in the way of sound fiscal management and evidence-based policies that would protect ratepayers and allow BC to become a leader in alternative energy.
“Energy has been treated like a political tool in this province, depriving British Columbians of the leadership and sound fiscal management they deserve from their government,” said Weaver.
“Today, the NDP announced that they are freezing Hydro rates. B.C. Hydro is in a dire financial position due to the utter failure of the B.C. Liberals to responsibly manage our finances. They raided B.C. Hydro of more than half a billion dollars in dividends last year alone. ICBC is facing a similar financial mess for the same reason.
“Since the Liberals used LNG as a Hail Mary pass to clinch the 2013 election, they have been hell-bent on developing an industry that was never going to materialize. Due to Liberal enticements to LNG companies, British Columbians pay nearly twice as much as hypothetical LNG companies for their Hydro.
“Site C is yet another piece of this disturbing puzzle – it is billions of dollars over budget and was pushed through without proper oversight by BCUC to satisfy the LNG pipedream. BCUC, an independent body whose purpose is to protect ratepayers, was blocked from doing its job because of the Liberals’ blind pursuit to get to yes at any cost.
“The NDP is at a crossroads. They can continue down this path of reckless Liberal fiscal management, or they can keep their promise to be better. While I’m glad they’re reviewing BC Hydro, there are concrete steps they can take to reverse the trend of energy policy being used as a political tool. They can and should cancel the Long Term Royalty Agreement with Progress Energy, who, by the way, is responsible for the two largest unregulated dams in North Eastern BC. They can, and should stop the pilfering of BC Hydro by requiring dividends that, if not stopped, will amount to $2.8 billion by 2020.
“We cannot keep making political decisions while saddling future generations with debt. If the NDP truly want to make life more affordable, freezing hydro rates without developing an energy strategy – which will simply saddle our children with these costs – is not the solution. We have a generational opportunity to use this minority government to chart a new path for BC, one that takes us away from the BC Liberals fiscal mismanagement. It will require us to think big and to take bold action, but that is exactly what British Columbians deserve from their leaders.”
Jillian Oliver, Press Secretary
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