HOW MUCH ARE WE PAYING THE OIL AND GAS CORPORATIONS TO TAKE OUR RESOURCES

As a Canadian citizen, I’m asking how much are we paying for (enslaved to) the oil and gas corporations?  And why are we paying all these subsidies to/for the corporations?

Some people put fossil fuel subsidies at about $3.3 billion per year. (e)(s)  Plus, an additional “$2.89 billion into financing fossil fuels production”. (x)  Some of this is paid for by provincial governments and some by the federal government.  I suspect the cost to Canadians is much higher.   And that’s without including $5.3 billion in subsidies for LNG Canada’s new Kitimat megaproject (cc), or the $8 – $12 BILLION support provided by the Export Development Corporation to the oil and gas industry (k), the $5.4 billion Kinder Morgan pipeline or the billions for its expansion.

A few examples of subsidies:

Infrastructure – roads, bridges, drinking water, generation facilities, power lines, substations, etc.  

Government grants and contributions – the grant money will never be paid back to Canadians; for example: numerous research chairs, in fossil-fuel-related areas, at post-secondary institutions (j) “Numerous provincially-funded institutes and funding envelopes.”

A Future Alberta article (j) lists the following, presumably most, or all, are grants, and their purpose:  $61 million, $26 million, $75 million + $75 million, $10 million + $10 million, $50 million, $440 million, $70 million, $13.5 + 15.3 million, $10 million, $8.2 million, $2.4 million, $1.9 million, $1 million, $1 million, $1 million, $1 million, $1 million, $950,000, $322,000 and, as the article says, the list of subsidies goes on… $1 billion on a series of grants and loan guarantees to build two to five partial oil upgraders.” (o) In all, Alberta is providing more than $3 billion in support for crude oil and bitumen partial upgrading and petrochemical upgrading. (q)                          Rachel Notley also signed a $3.7-billion contract to lease 4,400 railway cars to carry oil by rail. (aa) “But United Conservative leader Jason Kenney… has vowed to cancel the oil-by-rail contracts”. (y)

The Alberta government is giving “more than $2.3 billion in assistance to companies in the oil and gas sector” to cut methane emissions. (ff)  The Government of Canada has a “similar methane reduction commitment”, although the article does not say the cost of the federal program.(ff)

$50 million is being given through the federal Clean Growth Program. (i) (mm)

Titanium Corp., which developed technology to extract valuable minerals from oilsands waste, received a $40-million grant last month to help with its work remediating oil-sands tailings. Canadian Natural Resources, an Alberta oil-and-gas producer, got $22.3 million in March to help buy a new steam turbine to power its facilities in the Athabasca oilsands. (ss)

Government loans or loan guarantees at favourable rates –  Many, or all, of the loans may disappear without payment.  And, there is rarely any mention of how ‘favourable’ the interest rates are on the loans so Canadians may also have to pay for the interest cost of lending the money.                   

$235 million in loans has been given for orphan well clean-up. (p) “about $1 billion in commercial financing incentives through Export Development Canada (EDC), $500 million over three years in Business Development Bank of Canada financing to support smaller, ‘higher risk but viable’ fossils stay in business, and almost all of it in loans. (i)  The EDC has loaned up to $14.1 billion to the largest tarsands/oilsands corporations from January 2010 to July 2019 (oo); these corporations are making huge profits.(z)

Resources sold by government at below-market rates – “Alberta has long been criticized for having royalty rates among the lowest in the world” (gg)(kk)(nn) but Alberta thinks their rates are fair. (jj)                                                    

Research and development funding – for example:  The Government of Canada is investing $1.5 billion in a Oceans Protection Plan (n) in response to Kinder Morgan  pipeline court case (r) + 61.5 million + 167.4 million to protect the whales (mostly from the tankers). (g)  A lot of research and development funding is for oil sands “development and innovation” and “greening” and also falls under grants. (bb) 

Government intervention in markets to lower prices

Measures which reduce taxes payable – such as accelerated capital cost allowance of $14.4 billion (this includes other businesses besides oil and gas), (u)(f) various tax credits , tax exemptions and rebates.  For example:  Investment tax credit (ITC), Scientific research and experimental development credit (SR&ED), Atlantic Investment tax credit; plus, Canadian Development Expense – $1.018 Billion, Canadian Exploration Expense – $148 million, Crown Royalty Reductions – $1.161 billion, Deep Drilling Credit – 127 million (s)  B.C’s deep well credit of $5 billion over the last 10 years (v)

Pipelines – The $5 billion Kinder Morgan pipeline; the twinning of the pipeline for unknown billions more.

“Alberta’s NDP government has entered a 20-year agreement with TransCanada to ship 50,000 barrels of oil per day down the Keystone XL pipeline, to the U.S. (w) This is because “TransCanada can’t even get shipper agreements to fill Keystone XL,” Rubin said. “Shipper’s agreements are like long-term supply contracts which you need to get before you finance a pipeline.”  Albertans will be required to pay for any shortfall in the shipments.

Cleanup of orphan wells – which will cost between $58 to $260+ BILLION and that cost is growing. (a)   Canadians have already paid at least $30 million towards the cleanup. (a)  “Kenny proposes to … ask the federal government — taxpayers — to provide ‘tax incentives and financial support’ for energy corporations facing cleanup costs”.  (c)

All the costs of running various government departments, boards, agencies, commissions and research facilities to service the oil and gas industry.   These costs would include $31 million to promote the Trans Mountain pipeline expansion; (dd) and, now Kenney has a war room in the department of energy to fund ads/propaganda on behalf of the oil and gas industry. (ee) $80-million will be spent on this war room “to defend Canada’s energy industry from criticism”.  (l)

Some people would include all, or part, of the cost of air/water/soil pollution, plus more frequent and intense extreme weather, climate change impacts of fires, floods, funeral bills/hospital visits from heat waves/air pollution/fires, droughts, building seawalls, loss of shoreline, weakened infrastructure, increase costs in industries from farming to energy production and other costs of climate change currently being shouldered by the regular people.

The federal government announced investments of $22 billion to build climate resistant infrastructure, including $2 billion for a Disaster Mitigation and Adaptation Fund“. (qq)

Remember, the subsidies listed above are just a few examples of what the regular people are giving to the tarsands/oilsands/gas corporations.  All, while Alberta’s biggest oil companies are raking in billions in profit. (z)

The politicians haven’t even been tracking how much was going into subsidies, much less if it amounted to a net benefit for Canadians.  In 2017, ‘auditor general Michael Ferguson said he tried to test the progress being made on phasing out the subsidies but blasted the government for refusing to provide documents that would allow him to do so’. (t)  When “Canada’s Auditor General told the federal government that it had to start tracking its subsidies to the fossil fuel industries” (and that would be the Liberals very limited definition of a subsidy), the Liberals said “it may not be made public” (k), in other words it won’t be.  The same thing is happening in B.C.; As Ben Parfitt reports “in an ominous development, our government says we are not even entitled to know how much the government actually subsidizes individual energy companies. (ll)

In 2018/19 the Auditor General’s office at least got to audit the Department of Finance.  They found that “Department of Finance Canada’s assessments to identify inefficient tax subsidies for fossil fuels were incomplete, and that advice it provided to the Minister was not based on all relevant and reliable information”, “did not clearly define how a tax subsidy for fossil fuels would be inefficient”, and so on. (pp)  In short, it was pretty much a farce.

Firstly, that tells us they have something to hide, and secondly, this is not democracy.  In a democracy the public has a right to know who their money is going to, how much and for what purpose.  Thirdly, it says that if they have to hide the total of the subsidies we are paying  then we, the regular Canadians, are getting very little, or, I suspect, we are paying, from what little we have, the oil and gas companies to take our resources, line their pockets, pollute our environment, and make us suffer and die.

And Trudeau had just continued a long trend.

United Nations Secretary-General Antonio Guterres “called for an end to fossil fuel subsidies, saying taxpayers’ money shouldn’t be used to harm the planet.

He said: ‘Many people still think that to give fossil fuel subsidies is a way to improve living conditions of people.

‘Nothing (could be) more wrong. What we are doing is to use taxpayers’ money, which means our money, to boost hurricanes, to spread drought, to melt glaciers, to bleach corals, in one word: to destroy the world.’” (rr)

 

 

 

(a)  Alberta regulator privately estimates oilpatch’s financial liabilities are hundreds of billionsMike De Souza, Carolyn Jarvis, Emma McIntosh & David Bruser, 01 Nov 2018, National Observer
(b) Here’s How Canada’s Oil Sands Could Collapse by 2030 – Geoff Dembicki, 14 Aug 2017, VICE
(c)  Both Notley and Kenney Hiding from a $260-Billion Cleanup Problem – Andrew Nikiforuk, 01 Apr 2019, TheTyee.ca
(d)  How NOT to Fix Alberta’s Hurting Jobs Economy – Gil McGowan, 11 Apr 2019, TheTyee.ca
(e)  LASER TALKS:  Fossil Fuel Subsidies – 06 Feb 2018, Citizens’ Climate Lobby Canada
(f)   Fall fiscal update earmarks in excess of $17-billion in new spending over six years – Ethan Rotberg, 21 Nov 2018, Globalnews
(g)  Government of Canada takes further action to protect Southern Resident Killer Whales – Government of Canada
(h)  Environmental groups call subsidies to fossil fuel industry an ‘anti-carbon tax’ – Bob Weber, 15 Nov 2016, National Observer
(i)  Alberta Pans New 1.65B Fossil Lifeline from Ottawa –  Phil Heidenreich and Karen Bartko, 19 Dec 2018, GlobalNews
(j)  Government funding for oil sands R&D – date (after 06 Feb 2019), Future Alberta
(k) The $10-billion dollar elephant in the room – 08 Jun 2018, Above Ground
(l)  Alberta’s UCP reveal platform that would reduce spending, replace carbon tax with levy on large emitters – Justin Giovannetti, 30 Mar 2019, Globe and Mail
(m) New Study:  Fossil fuel subsidies undermine carbon pricing in Canada, Environmental Defence, 15 Nov 2016, Cision
(n) Inside Ottawa’s rush to dispute science before pipeline approvals – Carl Meyer, 16  Oct 2017, National Observer
(o)  1B upgrader plan aimed at getting Alberta off boom – Todd Coyne, 26 Feb 2018, CBC News
(p)  Orphan oil and gas wells adopted by rookie Alberta energy company founder – Dan Healing, 25 Aug 2017, National Observer
(q)  Made-in-Alberta Plan Moves $2-billion Investment Forward – pmnationtalk, 23 Jan 2019, NationTalk
(r) On the Record:  Why the Court Overturned the Pipeline Approval – Tyee staff, 30 Aug 2018, TheTyee.ca
(s)  Unpacking Canada’s Fossil Fuel Subsidies – International Institute for Sustainable Development (IISD)
(t)  Canada’s billions in fossil fuel subsidies to go under the microscope – Mia Rabson, 15 Jun 2018, National Observer
(u)  Highlights of Bill Morneau’s 2018 fiscal update – Sean Kilpatrick/Canadian Press, 21 Nov 2018, CBC News
(v)  How BC’s Gas Giveaway Fuels Alberta’s Oilsands – Ben Parfitt, 08 Aug 2018, TheTyee.ca
(w) Alberta’s Notley government signs on as Keystone XL customer – Tom Vernon, 18 Jan 2018, Global News
(x) Rebuilding Fort Mac, and Our Energy Economy –  Crawford Kilian, 09 May 2016, TheTyee.ca
(y) Cenovus swings to profitability but frets over Kenney’s oil-by-rail cancellation threat – Geoffrey Morgan, 24 Apr 2019, Financial Post
(z) How Alberta’s biggest oil companies are still raking in billions – Sharon J. Riley, 12 Jun 2019, The Narwhal
(aa) Alberta’s election platforms compared:  Where the NDP and UCP stand on everything from child care to carbon taxes –  Justin Giovannetti, 12 Apr 2019, The Globe and Mail
(bb) Can technology lower the carbon footprint of Canada’s oilsands? – James Wilt, 19 Mar 2018, National Observer
(cc) LNG Canada project called a ‘tax giveaway’ as B.C. Approves massive subsidies – Sarah Cox, 03 Oct 2018, The Narwhal\
(dd) Alberta has spent $31 million promoting Trans Mountain pipeline expansion –  Kevin Maimann, 31 Aug 2018, The Star
(ee) Kenney and Scheer vow to fight ‘lies’ of oil and gas opponents –  Drew Anderson, Helen Pike, 25 Oct 2018, CBC News
(ff) Alberta giving oil/gas producers $2.3 billion over 5 years to cut methane gas emissions – Jude Hislop, 25 Apr 2018, EnergiMedia
(gg) Are Albertans collecting a fair share of oilsands wealth? – James Wilt, 14 Aug 2018, The Narwhal
(hh) Alberta’s Problem Isn’t Pipelines:  It’s Bad Policy Decisions – Andrew Nikiforuk, 23 Nov 2018, TheTyee.ca
(ii) Revealed:  oil giants pay billions less tax in Canada than abroad – Martin Lukacs, 26 Oct 2017, The Guardian
(jj) Oilpatch-friendly royalty system takes effect in Alberta – Kyle Bakx, 03 Jan 2017, CBC News
(kk) Comparing royalty rates in Alberta, Saskatchewan, Texas and North Dakota – Tracy Johnson, 20 May 2016, CBC News
(ll) Ben Parfitt: British Columbians shortchanged billions from fossil fuel industry revenues – Ben Parfitt, 27 May 2018, Vancouver Sun
(mm) Oil and Gas Clean Tech Program – Natural Resources Canada, www.nrcan.gc.ca/
(nn) Norway’s Sovereign Wealth Holds Lessons for Canada – Susan Ormiston, 20 Mar  2015, CBC News
(oo)  Fuelling the Oil Sands – 15 Jul 2019, Above Ground
(pp) Report 3 – Tax Subsidies for Fossil Fuels – Department of Finance Canada – Heather Miller, Sylvie Marchand, Tristan Matthews, Suzanne Moorhead, 28 Feb 2019, Auditor General
(qq) Canada’s 7th National Communication and 3rd Biennial Report – Government of Canada, 2017
(rr) Greta Thunberg tells Vienna conference world leaders aren’t doing enough on climate change – Daily Mail, 2019-06-13
(ss) Liberals under fire after announcing more than $12M in Funding to Loblaw – Mia Rabson, The Canadian Press, 09 Apr 2019, CTV News

 

 

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