Saturday, August 2, 2014

This week's Liberal direction: lower LNG expectations

Friday, The Common Sense Canadian — a site that usually provides worthwhile journalism — posted an article written by Keith Baldrey for Glacier Media, publisher of numerous community recyclables. Not surprisingly, anyone reading the Global News reporter's account needs the rest of the story.

Here is part of Baldrey's item,
"...Clark is arguing that the glut of natural gas on North American markets has kept the price low, and therefore B.C. must look to other markets to make money. China, Korea and Japan all loom as potential customers of B.C.’s LNG.

"To be fair, she has a point here. The steady decline in the price of natural gas in North America has meant dwindling revenues to the provincial treasury arising from royalties on gas sales, and this has been going on for several years.

"Annual natural gas royalty revenues for the B.C. government peaked in 2005-06 at almost a whopping $2 billion...

"The revenues bottomed out at a measly $169 million in 2012-13 and are expected to hit nearly a half-billion dollars or so this year, but the days of royalties generating more than a billion dollars per year appear over..."
Apparently, Liberals asked media friends to lower the public's LNG expectations. It is what RossK, The Gazetteer, calls "The Downgrading of the Sparkle Ponies." Vaughn Palmer did his part this week, recounting how pre-election talk of a debt-free province rolling in cash from gas royalties was merely aspirational. Baldrey does not suggest that Christy Clark and friends were lying. Instead, he blames citizens for Liberal deceit,
"People seem to at least want to believe the fairy talelike talk about billions of dollars coming our way to help eliminate the provincial debt and even the sales tax."
Regular readers here will be better informed than our timid reporter but I'll recount the numbers that Baldrey ignored.

Unrecorded credits owed gas producers have been growing steadily. These liabilities, which total $1.2 billion at the end of fiscal year 2014, will reduce future royalty payments. While Global's reporter states that royalty revenues were "a measly $169 million in 2012-13," he fails to mention that the future royalty credits owed producers grew by $160 million in that same year. Were the province not inventing its own accounting standards, the gas royalty revenue would have been reported as an even more measly $9 million.

The province's Budget and Fiscal Plan, dated February 18, 2014, reported 2013/14 royalties of $368 million in fiscal 2014, not the "half-billion dollars or so" that Baldrey writes. However, credits owed gas producers grew another $316 million so the net royalty revenue for the fiscal year was $52 million, not $500 million or so.

Even Baldrey's "almost a whoppping $2 billion" of revenues reported for 2005-06 was misleading. In those years, while the gas industry enjoyed high prices, the province was still offering about $250 million a year in production subsidies. Net gas royalties were closer to $1.6 B than $2.0 B in 2005/06.

The earlier Northern Insight article, From outside the Liberal spin machine, provides numbers in a downloadable form.

___________________________________________________________

From 2013/14 Audited Financial Statements, Public Accounts:

"The province offers credits for certain costs incurred by producers including the deep well, road and summer drilling programs. Deep well credits of $1,241 million (2013: $997 million), road credits of $6 million (2013: $12 million) and summer drilling credits of $3 million (2013: $9 million) have been incurred by producers and will reduce future natural gas royalties payable when wells go into production."

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11 comments:

  1. It seems to me that Keith Baldrey has once again proven just how lazy & uninformed ( I hate using the word "stupid" ) he really is. According to Baldrey " B.C. must look to other markets to make money. China, Korea and Japan " . If I'm not mistaken, that has been BC's target from the beginning & proven in the amount of trips the Liberal team has taken to Asia.
    Baldrey also say's " People seem to at least want to believe the fairy talelike talk about billions of dollars ". So how many times has Mr. Baldrey typed those exact words from the very beginning without doing a little research & questioning those numbers ?

    Keith Baldrey & now Vaughn Palmer ( August 1, 2014 ) seem to have just now realized that Christy Clark was basically doing a political sales job for the past 3 years.

    What will these astute individuals learn next ?

    Guy in Victoria

    ReplyDelete
    Replies
    1. Rather than lazy & uninformed journalism as Guy in Victoria suggests, I believe it is something worse. Baldrey ignores the credit given producers even though they amount to billions of dollars over the last few years. He knows about them but he chooses not to report the information. That speaks to motives and objectivity and it is not just Keith Baldrey that fails.

      Delete
    2. what billions? you mean the billions of our tax dollars shelled out to bribe overseas investers into b.c? what a joke! how much of the 15 BILLION crappy clark racked up in ONE YEAR was spent travelling to asia and offering tax incentives so ridiculous no one here would make a dime..as well as guaranteeing b.c workers would not get first crack at the jobs. what b.s.

      Delete
  2. Baldry and Palmer, the Lord Ha-Ha's of our age, are merely spinning the LNG story away from Premier Photo-Op and going so far as to blame the people. The Ha-Ha's Bill Boring's sop-box is now gone so they have to retreat back into the nebulous world of advertising themselves as worth while guest speakers.

    The Vancouver sun is unabashedly a shill for Photo-Op and no worthwhile news is forthcoming. Reading the sun is like reading Pravda as one knows the story before you read it; as is with all party newspapers.

    Deceit, deception and plain yellow journalism is the hallmark of the Sun,Baldry and Palmer

    ReplyDelete
  3. I am currently reading a book titled "Necessary Illusions" by Noam Chomsky. It was published in1989. Its subtitle is "Thought Control in Democratic Societies." Here is a paragraph from page 10.
    "Case by case, we find that conformity is the easy way, and the path to privilege and prestige; dissidence carries personal costs that may be severe, even in a society that lacks such means of control as death squads, psychiatric prisons, or extermination camps. The very structure of the media is designed to induce conformity to established doctrine. In a 3 minute stretch between commercials, or in 700 words, it is impossible to present unfamiliar thoughts or surprising conclusions with the argument and evidence required to afford them some credibility. Regurgitation of welcome pieties faces no such problem."



    ReplyDelete
  4. The body of work produced by the usual suspects pretending to practice journalism here in BC. is so patently substandard it naturally creates speculation about the cause. One cannot observe the obvious deficiencies without wondering why they exist and how they can be allowed to continue.

    Laziness, stupidity, incompetence, or cowardice on the part of these people could explain it, because their work exemplifies those traits. Except that it doesn’t explain how their employers could put up with it and remain competitive in the media marketplace. These must be deliberate, considered actions designed to protect certain interests, and the few competitors left must be serving the same political and corporate masters. Whether it’s Boss Power, BC Rail, IPPs, or any number of other debacles, many stones are left unturned. Vaughn Palmer had the audacity to inform us that we would never learn the truth about the Boss Power payoff because it didn’t go to trial. What a self-damning indictment of the state and capability of investigative journalism in this province!

    Nobody installed as a “bureau chief”, or “senior legislative reporter” could possibly be as stupid or incompetent as some of the work would suggest. A case in point is this column by Keith Baldrey. He may not admit reading Norm Farrell’s work, although he should read all of it, but he also ignores plain logic and the Auditor General’s recommendations. He knows the credits have to be considered to tell the whole story but deliberately chooses not to include them. Unless he is prepared to explain why that would be, we are free to assume the most obvious motive.

    He doesn’t seek established credibility; he seeks credibility with the established.

    ReplyDelete
    Replies
    1. Why is it that our journalists in Saudi or Egyptian jails or journalists that report our political slant in countries that we see as adversaries are worthy of our protection and yet Russian journalists who are targeted by Kiev Fascists and killed or Assange and Snowden who are targeted by USA are unworthy when they reveal the truth. If as journalists you protect freedom of the press of your colleagues you need to protect it everywhere. Why did you ignore the shooting of the RT journalist in Ukraine and the detention and beating of two others ? It's like condemning the Holocaust but not condemning Vietnam , Iraq and the Congo only to mention these three which were genocides by war. Editorials and comments about current issues are shamefully inaccurate, and bias particularly on historical background.

      Journalism is not a popularity contest. A true journalist must be an unpopular messenger of the truth, the whole truth and nothing but the truth. Journalists today are shoeshine boys for the corporate sector, and political parties. Journalists at one time investigated government policy reporting on its significance, they did not print press reports as stories for reelection purposes. Where is the integrity in that? The job of a journalist is not to reprint articles from wire services which constantly lie. Your job is not to debate me or anyone else, your job is to find out the truth and print or broadcast it. Your job is to expose public policy promoted by campaign donations not soft soap it because you are afraid Harper will have one more round of CBC cuts. Real news and journalism serves only one master the TRUTH

      Delete
  5. Wow.

    Lew's line sure is heck of an inverted symbiotic trapezoid quote.

    It will live on in infamy, I reckon.

    .

    ReplyDelete
  6. I am enquiring about the Province's solar power policy in view of the grid parity that could be upon us if enough smart Canadian inventors make one more quantum leap design to make it happen.

    ReplyDelete
  7. http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/petronas-threatens-to-call-off-10-billion-bc-lng-project-report/article20783049/
    ...amid a delayed regulatory approval process, plans by the B.C. government to impose an LNG tax and a “lack of appropriate incentives.”
    Hmm, screw the BC citizen you mean?

    ReplyDelete

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