A Liberal coalbed methane gift to corporate friends

The Liberals giveth (to 4 big corporate coal rights owners) and the Liberals taketh away (from 600 small landowners who weren’t even told they were being ripped off)

Recently, this ad appeared in some small newspapers around British Columbia, placed by a family in Princeton who feels that they have been treated unfairly by the provincial government.

Brad and June Hope own land that sits over a portion of the Princeton coalfield. Since 1903, their freehold title has included the rights to the coal.

In November 2002, the provincial government sold the drilling rights for coalbed methane in the Princeton coalfield, to a consortium of three companies led by Petrobank Energy and Resources of Calgary. This included rights to coalbed methane in the coal that sits under the Hopes’ land – coal that itself belongs to the Hopes!

In April 2003, the government issued the Coalbed Gas Act. The objective of the Act is to remove coalbed methane rights from coal rights.

The Act is a revenue grab, intended to add a new revenue stream to government from something that previously, and reasonably, could be assumed to be included in “coal rights”. Coal and coalbed methane, after all, are both hydrocarbons. They are formed over the same lengthy period of time, in the same place from the same ancient plant matter. The coal is both the source and host for the methane.

If coalbed methane is separated in law from coal, however, the government has two products it can sell, and the opportunity for royalty income in the future.

Ergo, the Coalbed Gas Act.

But the government also recognized that coal rights owners might object to the severance of methane from coal, so to protect itself, it added section 7 to the Act: the “No compensation or right of action” section. This says, you can’t sue and you can’t claim compensation. Pretty cynical. (See “Objectionable” below)

The Hopes knew nothing about any of this.

Until an agent for Petrobank Resources knocked on their door. The agent explained that he was there to secure access to the Hope’s land so Petrobank could drill into the coal, which the Hopes also owned.

Brad and June grew instantly concerned, and began their own investigation. They learned about the 2002 rights sale to Petrobank, about the 2003 Coalbed Gas Act. The injustice of the Act and the government’s behaviour outraged them.

Then they started to learn about coalbed methane, what it can do to the land and water, to real estate values. And their concerns intensified.

The Hopes sought a legal opinion. They sought out other landowners, which is how the ad at the top of this page came about. Finding such landowners is a difficult and potentially expensive process. Registry searches cost money, even when you know where and whom you are looking for. In this case, it is unreasonable for any citizen to contemplate an appropriate search for landowners.

The government of course has free access to various land and mineral rights registries, but thus far have been unwilling to put the Hopes in touch with the other landowners. So, the Hopes have to resort to running advertisements on their own, also a potentially expensive undertaking.

According to the Ministry of Energy and Mines, there may be 600 landowners in the province who also own coal rights. If you are one, please get in touch with Brad Hope at 250-295-3512 or email bhope@nethop.net.

The possibility of legal action exists, particularly if a number of coal rights owners are working together.

 


What we find objectionable. At Dogwood Initiative, we’re not objecting to government trying to maximize returns to the people of BC from fossil fuels. Quite the opposite. Fossil fuel use is contributing signficantly to global warming, and any policy initiatives that tend to reduce fossil fuel production or combustion, is good.

We support, also, maximizing returns to the First Nations and people of BC from fossil fuel production, if that production is going ahead anyway. We support diversion of funds into a “heritage fund” that can be used to underwrite sustainable energy initiatives, support smaller communities hit by economic hardship, and provide an economic buffer for British Columbia.

Instead, the Liberals have turned BC into a resource giveaway.

The Coalbed Gas Act is strangely schizophrenic in this respect. On the one hand, it is a barefaced cynical revenue grab. On the other hand, the government has slashed the already pathetically low (more about this in a future bulletin – watch for it) royalty “regime” for conventional natural gas to encourage coalbed methane development in BC.

We are concerned about the absence of fairness in the design of the Act. If there was not a good chance that the government could be sued, and lose the case, then section 7 would not have been necessary.

The application of the Act is discriminatory and biased. Because having stripped owners of coal rights of their methane rights, the government then concocted deals with the four largest owners of coal rights (approximately 70% of the coal in BC) whereby the coalbed methane rights would be returned to them. Another group of coal rights owners were sent letters advising them about the Coalbed Gas Act. But the vast majority of the 600 or so holders of coal rights in British Columbia, landowners like the Hopes from Princeton and Susan Holvenstot from Courtenay, were told nothing.

The apprehension is unavoidable that the Liberals are appeasing a large corporate donor. TeckCominco is the largest single contributor of money to the BC Liberals, handing over some $678,511 between 1996 and 2002. Fording Coal gave another $105,450. With Elkview Coal Corp, these companies formed the Elk Valley Coal Partnership which is the largest holder of coal rights in BC. And for whom, it is perceived, the government back-doored its own Coalbed Gas Act and cooked up a sweetheart of a deal.

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