January 9, 2001
Kamloops Daily News


If you ignore the hardship to Canadians caused by the rising
cost of heating homes with natural gas, free enterprise is a
great success story.

A recent report from the National Energy Board puts it this
way: "the natural gas market has been functioning so that
Canadian requirements for natural gas have been satisfied at
fair market prices."  The invisible hand of the marketplace
is blind to hardship.

Deregulated natural gas prices have brought windfall profits
to gas producers, and to governments in the producing
provinces of Alberta, B.C., and Saskatchewan.  The lion's
share goes to Alberta with 83 per cent of all Canada's
natural gas, followed by B.C. at 12 per cent and
Saskatchewan at 4 per cent.

B.C.'s natural gas was once a public utility, like our
electricity now is.  That all changed on 31 October 1985,
when the Social Credit Government of British Columbia, along
with the Governments of Alberta, Saskatchewan, and Canada, 
signed the Agreement on Natural Gas Markets and Prices.

From that time on, we were thrown to the whims of the
marketplace. Natural gas was no longer a utility -- a
publically resource -- but a commodity to be traded on stock
exchanges.  Pipelines were built to move this commodity to
the United States.

Although the use of natural gas in Canada is primarily for
heating, in the United States natural gas is increasingly
being used for the generation of electricity.  The
popularity of gas fired electrical generating plants is easy
to understand.  The electrical plants are relatively cheap
to build and they are virtually non-polluting.

And the demand for electricity is growing rapidly - - 
faster than any other energy source.   In our increasingly
high tech world, the use of computing equipment,  electrical
appliances, air conditioning, telecommunications, home
entertainment systems, cordless phones and the like, have
all increased.

So guess what happens when there is an unusually hot summer,
like last year,  in California?  To keep cool, Californians
turn up their air conditioners.  Electrical generating
plants buy more natural gas to supply the demand.  Increased
demand drives the cost natural gas up.  As a result, we pay
more to keep warm so that Californians can keep cool.

To add insult to injury, we end up buying our own natural
gas at inflated prices, with 67 cent dollars. It's a
perverse example of a value added resource.  Natural gas is
exported to the United States where it is marked up, and we
buy it at American prices.

Canada supplies 25 per cent of all North American needs.
Most of it comes from the Western Canada Sedimentary Basin
which stretches from northeastern B.C., through central
Alberta, and southeastern Saskatchewan.  We have more than enough
natural gas to supply our own needs.   If natural gas were
regulated like B.C.'s electricity is, we would be paying the
lowest price in North America.  

But that isn't going to happen.  Once a utility is
deregulated, privatized, and sold to the highest bidder, the
price of that energy source is out of our hands.  And that's
the way politics is going.  Whatever big business wants, big
business gets. For example, the Canadian Manufacturers and
Exporters Association wanted, and got,  a trade agreement
with the United States ensured that our cost for natural gas
was linked to what Americans will pay. 

Privatization of our natural gas utility has not provided
the lowest cost to consumers -- public utilities such as
B.C. Hydro have.  Utilities should be a public service, not
a commodity.  In addition to serving the owners of the
resource, utilities are the engine of our economy.  It's
impossible to have a made-in-B.C. industrial strategy when
our resources are controlled by others

You might think that the high cost of natural gas would
cause free enterprisers to despair. But remember, what's bad
for consumers is good for natural gas producers. 
Entrepreneurs hope to recreate this success story with
water.

Canadians now rightfully think of water as our heritage. 
Entrepreneurs see it as a valuable commodity.  They want
water pipelines built to the United States, and sold on the
open market.  We won't be able to afford to buy our own
water once it is commodified. The marketplace is not
concerned a whit if we are cold and thirsty.

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