Finance Minister Kevin Falcon is throwing cold water on the government's own natural gas royalties estimates, as the price of that commodity continues to come under pressure. That dampening comes just five months after his predecessor, Colin Hansen expressed continued confidence in the sector even as the government was slashing those estimates.
Speaking with Public Eye at February's budget lockup, Mr. Hansen insisted, "The upside potential (for natural gas) in the medium and long-term is very significant" as the United States switches from coal-fired to gas-fired power plants and exports to Asia increase.
At the same time, the government lowered its estimated natural gas royalties for fiscal 2010/11 to $365 million - $167 million less than initially anticipated.
But now the government is reporting its actual royalties for the past fiscal year were $313 million.
And, at a news conference today, Mr. Falcon said he's "not feeling real confident" in its estimates for 2011/12 to 2013/14 - which show a rebound. Although he is still holding hope in the possibility of natural gas exports to Asia.