Skip to content
Join our Newsletter

B.C. asks residents to weigh in on future of oil and gas royalties

The 30-year-old royalty program has provided the fossil fuel industry with about $10 billion in credits. B.C. residents can share their thoughts on the future of the scheme until Dec. 10, 2021.
Caribou 3
Of the over 3,100 oil and gas wells found in critically endangered caribou habitat, 54% were backed by provincial royalties, UBC researchers have found in the past.

The B.C. government is asking residents of the province to share their opinion on the future of an oil and gas royalty system that has handed out at least $10 billion in credits to the fossil fuel industry over the past 30 years.

Last month, an independent assessment examining the royalty scheme found it was “broken” and required an overhaul. 

The assessment said there are nearly 36,000 active oil and gas wells in the province, with another 8,600 authorized for drilling. Nearly all of them are on Crown land leased to drilling and extraction companies. 

The government says it triggered a review of the royalty program so British Columbians get a fair return on oil and natural gas revenue. The province says it’s also looking to ensure it aligns with the province’s goals on reconciliation and protecting the environment. 

Government support of the oil and gas industry has come under criticism due to the rising toll of emissions on global heating. Thousands of oil and gas wells also fall within federally designated critical caribou habitat for two of the most threatened woodland caribou populations, UBC researchers found in October. Their conclusion: “Public funds are subsidizing caribou extinction.”

“The main reason behind caribou decline is industrial habitat disturbance,” says lead researcher Adriana DiSilvestro. “Obviously, companies cut roads, but they also cut things called seismic lines to locate [oil and gas] reserves. And when they do that, they create lines of sight for wolves.”

By lowering well-operating costs, the royalty programs create incentives to drill wells that otherwise would not have existed, note the authors of the independent assessment, “increasing land and ecosystem disturbance.” 

“There is a fundamental question of how much the Crown should offset the costs of fossil fuel development given its multiple objectives,” wrote the authors. 

In a Nov. 10 discussion paper offering background and three proposed options for a renewed system, the province states that growing natural gas production has made achieving oil and gas emission reduction targets "a challenge." Instead of addressing the emissions gap through a new royalty program, carbon pricing and new technologies should lead the way, says the Ministry of Energy, Mines and Low Carbon Innovation.

B.C. residents can share their thoughts on the future of the royalty program through the EngageBC web portal open from Nov. 10 to Dec. 10, 2021.

Results of the consultation process will be made public in the new year, with an overhauled royalty program set to roll out by the spring.