Sunday, May 25, 2008

B.C. nets $441 million windfall from oil and gas rights

The B.C. government's coffers are brimming with new cash after the monthly sale of oil and gas rights brought in a record amount of nearly half a billion dollars.

The province raised $441 million in the monthly auction of oil and gas rights in the sale Wednesday. That was a record for one month, and more than a third of the total for the entire previous fiscal year, setting another record.

The province's energy minister said new gas discoveries in northeastern B.C. are helping to fuel the bidding for drilling licenses.

Key parcels in the sale were three drilling licences located in the Stewart Creek area, approximately 40 kilometres southwest of Fort St. John.

"We had thought we would get somewhere in the neighbourhood of $135 million this time, but $441 million...We're not going to turn it down," said Energy Minister Richard Neufeld.

The B.C. government has a long history of being conservative with its revenue estimates at budget time, and then announcing big surpluses later.

But the energy minister said the nearly half-a-billion-dollar windfall from the auction of oil and gas rights was a surprise to him.

"We make predictions, but these things kind of blow those predictions up," said Neufeld on Thursday.

NDP environment critic Shane Simpson criticized the government for boasting about petroleum revenues at the same time it is taxing motorists to cut fuel consumption.

Premier Gordon Campbell has promised to cut B.C. greenhouse gas emissions by one third in the coming years, and recently introduced a carbon tax on all fossil fuels to encourage energy conservation.

"That is the inconsistency of this government," said Simpson.

But the energy minister noted almost all of the latest revenue is from natural gas, which he considers a clean fuel.

Natural gas has fewer emissions of sulphur, carbon, and nitrogen than coal or oil, and it has almost no ash particles left after burning, meaning it contributes less to smog and air pollution.

But burning natural gas does produce carbon dioxide, and extracting it also releases methane gas, both of which are significant causes of global warming, according to scientists.



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