FOR IMMEDIATE RELEASE

UNCEDED xʷməθkʷəy̓əm (MUSQUEAM), Sḵwx̱wú7mesh (SQUAMISH) AND səlilwətaɬ (TSLEIL-WAUTUTH) TERRITORIES/VANCOUVER – Sierra Club BC welcomes today’s announcement about the end of the Deep Well Royalty Credit and several other ‘inefficient’ fossil fuel subsidies. However, the environmental organization is extremely concerned about the creation of a new “revenue minus cost” system that allows companies to pay a minimum revenue rate until their drilling costs are paid off, a continuation of subsidizing the fossil fuel industry in the middle of the climate emergency.

Sierra Club BC calls for an immediate end to all types of fossil fuel subsidies and a detailed plan for a just transition, banning fracking as the next step, followed by winding down the fossil fuel industry. This is consistent with the latest scientific findings about the needed emission reductions to avoid catastrophic climate change.

“Today’s announcement must be the first step on the path towards ending fracking and a just transition with the goal of winding down BC’s fossil fuel industry. For too long, BC’s climate plans have been characterized by reducing emissions with one hand, while increasing them with the other, through support and subsidies for new LNG terminals and expanded fracking operations,” said Jens Wieting, Sierra Club BC’s Senior Forest and Climate Campaigner.

For decades, B.C.’s royalty system supported oil and gas production through low royalty rates and subsidies in the form of “royalty credits”, in recent years particularly with the Deep Well Credit to enable fracking which is now used for 90 percent of production. These credits have fueled climate pollution and dramatically reduced public revenue from extracting non-renewable resources.

Today’s step must be quickly followed by the missing plan that spells out how the province will meet the 2030 target for BC’s oil and gas sector to reduce its emissions by 33 – 38 %, as well as the needed contribution to the 2025 target to reduce BC’s emissions by 16 % (all targets compared to 2007 emissions).

A new paper published in Environmental Research Letters this Tuesday showed that globally, nearly half of existing fossil fuel production sites must be shut down early if global heating is to be limited to 1.5C, the internationally agreed goal for avoiding catastrophic climate change impacts. The scientists found that “staying within a 1.5 °C carbon budget (50% probability) implies leaving almost 40% of ‘developed reserves’ of fossil fuels unextracted.”

-30-