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Credits issued by the provincial government to natural gas companies could cost taxpayers more than $2 billion in foregone revenue, according to the Canadian Centre for Policy Alternatives.

Between 2016 and 2018, about $1.2 billion in credits for deep-well and horizontal drilling were issued to gas producers, who can use them to reduce future natural gas royalty payments to the government when wells go into production.

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B.C. collected $145 million in natural gas royalties in the 2017-18 fiscal year and $164 million in 2018-19, according to the budget and fiscal plan.

The deep well credit program has been in place for 17 years to compensate companies for the higher costs associated with so-called unconventional gas production, which is now so common that the credits are an “embedded subsidy” to the industry, said CCPA policy analyst Ben Parfitt.

“Is the government lowering royalty fees and effectively propping up fossil fuel extraction that would otherwise be unprofitable?” wonders a report by the CCPA, a progressive think tank.