Monday, June 30, 2014

Volatile gas revenues tend to evaporate

BC Liberals are reluctant spenders when it comes to improving public schools. However, they're not reluctant to put money into the pockets of natural gas producers. The amounts are in the billions but it's not much discussed, either in the Legislature or in budget documents. However, careful reading of the province's audited financial statements reveals this information:

Net Gas Royalties



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5 comments:

  1. When you elect organized crime to run the province, don't be surprised at the results. Gordo and Photo-op are just as dangerous gangsters as the Bacon Brothers.

    The evil that emanates in Victoria has now engulfed the province, organized crime has now been made legitimate - happy Canada Day peons.

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  2. G. Barry StewartJuly 1, 2014 at 8:08 AM

    Norm, you say "careful reading." I take it that the three columns of figures are not so nicely laid out as you have done? How much sleuthing was required — and is the information there (without an FOI request), for any media reporter to pick up and run with?

    Happy Canada Day to all, by the way. Our country may have warts — but at least we are free to point them out, without getting thrown in jail!

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    Replies
    1. The gross royalties are imputed. The Ministry of Finance reports net natural gas royalties and the Auditor General reports royalty deductions.

      From "Independent Auditor's Report" to the Legislative Assembly of the Province of British Columbia, Fiscal Year 2012:

      "Failure to provide for earned natural gas producer royalty credits

      "No provision has been made in the summary financial statements for royalty credits earned by natural gas producers under the government’s deep-well drilling program. In this respect the summary financial statements are not in accordance with Canadian public sector accounting standards.

      "Had a provision been made prospectively, as required by Canadian public sector accounting standards when an issue is raised by an auditor in one period but not corrected until a subsequent period, accounts payable and accrued liabilities as at March 31, 2012, would have been greater by $702 million, natural resources and economic development expenses for the year then ended would have been greater by $702 million and the deficit for the year then ended would have been greater by $702 million."

      From Notes to Consolidated Summary Financial Statements:

      "28. Natural Resource Revenue

      "Oil and gas royalty revenues are reported after adjustments for various royalty deduction programs such as producer cost of service allowances, deep well, summer drilling, marginal, ultra marginal, low production, 2% incentive, net profit, new pool discovery and road construction. Deductions allowable in the calculation of royalties revenue were $496.6 million (2011:$469.3 million)."

      From Schedule of Net Revenue by Source:

      "2 - Oil and gas royalty revenues are reported after adjustments for various royalty deduction programs such as producer cost of service allowances, deep well, summer drilling, marginal, ultra marginal, low production, 2% incentive, net profit, new pool discovery and road construction. Deductions allowable in the calculation of royalties revenue were $496.6 million (2011: $469.3 million)."

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    2. G. Barry StewartJuly 1, 2014 at 1:30 PM

      And that's why we're paying you the big money, Norm, LOL!

      I've only had ONE Canada Day beer — but I'm a little foggy on those quoted statements. (Mind you, it was a 2-litre bottle… joking.)

      I get that the Auditor General wasn't happy about the reporting process — and that gas producers get to write off a lot of costs, in the form of royalty credits… which we don't hear a lot about.

      Good digging — and presentation in graphic form. I'll send it on to my BC Lib MLA, as he probably hasn't heard the news.

      Delete
  3. Evil Eye has had the last word.

    July Morning

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