SEVENTY-FIVE
MINUTE DEBATE
Natural Gas Prices
Mr.
Wall:
— Thank you. Thank you, Mr. Speaker. Well I think the priorities
of the Assembly over the last two days have been exactly right,
Mr. Speaker. We have been talking about an issue that clearly is
the most important issue currently facing the province of
Saskatchewan and that is, Mr. Speaker, the largest utility rate
hike in the history of our province, the current recommended rate
hike of an average of 35 per cent currently before the cabinet of
the province of Saskatchewan. And, Mr. Speaker, I think it’s
very important to point out that while the average increase is 35
per cent, when you take out the distribution fee from the equation
— around, ranging up to $2 a gigajoule — we are talking about
a 60 per cent increase in the price of natural gas. That’s what
we’re talking about and that’s significant for the larger
institutional customers of SaskEnergy and of other companies in
the province because for them, the distribution isn’t as
important as the cost of gas. And so a 60 per cent increase in the
cost of gas is crippling, Mr. Speaker, for those institutions. Now
we know that the government, based on the commitment of the
Minister of Finance — and we’ll take him at his word — is
looking at options to provide relief for Saskatchewan people,
should they approve that increase. But before we decide that issue
and before that cabinet decides that issue, Mr. Speaker, they
ought to decide if this increase is needed as it is presently
constituted before the cabinet in this recommendation. That’s
the heart of the question that we’ve been asking here for a
couple of days. And I think finally Saskatchewan people are waking
up to the fact that this rate request, even though it’s been
diluted slightly by the panel, is based on $7 a gigajoule going
forward to October of 2002. And we have demonstrated without
equivocation that the price going forward to 2002 is much, much
less. In fact we’ve demonstrated today that if you go to the
Alberta Natural Gas Exchange, the intra-Alberta settlement . . .
Well the Minister of Finance has a confused look on his face.
That’s where you purchase gas, on the . . . (inaudible
interjection) . . . Pick your exchange then, Mr. Speaker. I’d
say to the Minister of Finance, pick any exchange he wants today
and the price will be in the range of $5.56 a gigajoule —
that’s the price. And it’s not just for today. Later on in
this debate someone like the member for Regina Dewdney, Mr.
Speaker, will stand up and say, well that’s the price today.
That’s what he said yesterday — that’s the price today but
tomorrow it’ll change. No, Mr. Speaker. We’ll explain it
slowly for the members opposite. This is a futures market and for
the gas year — and the initials here, GY — November 2001, and
that gas year, Mr. Speaker, is November 1, 2001 to the end of
October 2002. That’s the gas year. And what’s the price? Is it
$7 a gigajoule, Mr. Speaker? Is it 6.50 a gigajoule as proposed by
the government? No. Is it 6.50 as offered by EPCOR even yesterday,
which we raised? No. The price is 5.56 today — 5.56. And 5.56 it
. . . (inaudible interjection) . . . Well, here we go again. Mr.
Deputy Speaker, the member for Moose Jaw Wakamow says well it was
$5 yesterday. In point of fact, on the spot market yesterday it
was $4.80. We are . . . (inaudible interjection) . . . Well $5
then. Round it up. I can’t believe this, Mr. Deputy Speaker. But
if you want to secure the supply — if you want to secure the
supply — over the entire period of this increase all the way to
October 2002 you can still buy it, you can still buy it, for
$5.56. And the comments we get from across the way and the looks
we get from the Minister of Finance clearly demonstrate that they
don’t have a clue. They do need to take an arithmetic class.
This is the minister responsible for coming up with our provincial
budget, Mr. Deputy Speaker. I can’t believe it. Here are the
facts from the exchanges of the world. And the member for Moose
Jaw North will want to get on the Internet and find out what the
price of gas is before he makes his decision at the cabinet table.
He’ll have a role to play when cabinet decides what they’re
going to do. And he’ll want to do that from an informed
perspective. And the informed perspective is to know what can you
buy natural gas for through until October 2002 and the answer is
$5.56, Mr. Deputy Speaker. That’s the answer. It’s not 7.22 as
proposed by the government. And so we have another motion before
us, Mr. Deputy Speaker, to discuss this important issue. And it
refers specifically again to the confusion of this government as
regard to the price of gas. Because we have SaskEnergy basing
their entire application on $7 a gigajoule . . . actually 7.62 a
gigajoule. That’s the price they based on for their entire
application to SaskEnergy, Mr. Deputy Speaker. What is the price
that the minister based his projections on in the provincial
budget? What was that price? Well was it half of 7.62? No it was
even lower. For the same period, it’s $3.39 a gigajoule.
That’s the price the Minister of Finance has come up with for
the price of gas. And then he gets up and smugly answers all of
the questions that we have on this issue — specific questions.
He throws back rhetoric, Mr. Speaker, when we have asked this
basic question on behalf of the people of Saskatchewan. Why is
there such a difference? And why, when we ask Ron Clark at the
Crown Corporations Committee, when we asked him what he thought of
Eric Cline’s numbers, he told the committee . . .
Mr.
Wall:
— For that transgression, the members opposite are asking me to
resign, Mr. Deputy Speaker. And there is too much . . . we have
too much work to do on this side of the House to even be thinking
about that, including dealing with this motion. But I’ll
apologize for my reference to the minister in the first person.
And what I was saying though, Mr. Deputy Speaker, is we had Ron
Clark, the president of SaskEnergy before the Standing Committee
on Crown Corporations, and the member for Regina South did an able
job of chairing that particular meeting, and he’ll remember
that, Mr. Deputy Speaker. And so we asked Ron Clark, we asked him,
well what do you think of the Minister of Finance’s projections
for natural gas? Because we had heard rumours about a pending
SaskEnergy increase. So we said, Mr. Clark, how do you feel about
the Minister of Finance’s projection for the price of natural
gas at $3.39 a gigajoule to the end of 2002? And do you know what
he said, Mr. Deputy Speaker? I’m going to paraphrase a little
bit, but he said the Minister of Finance was all wet. He said he
was wrong. He said, I’d like to buy some gas from the Minister
of Finance. That’s what he said to the Standing Committee on
Crown Corporations. He didn’t believe him. So we came to the
Assembly, Mr. Speaker, and my colleague the member for
Canora-Pelly asked a question, and it was an important question,
given what Mr. Clark had said. And given that the consumers of the
province have a huge stake in what the price of natural gas is. So
the member from Canora-Pelly and our Finance critic, stood in this
Assembly and he asked the question, who’s right? Who’s right
in the government, Mr. Deputy Speaker? Was it the Minister of
Finance at $3.39, or was it the minister of SaskEnergy at $7 a
gigajoule. Who was right? The Minister of Finance, as I recall,
fielded the questions that day and he seemed to imply that he was
right. But there was still no definitive answer. Why? Because the
rate request was proceeding. And the rate request was based on 7.
So the minister’s projections were proceeding at 3.39, maybe
lowballing the revenues the government were expecting from the gas
royalties. Maybe that’s what he was doing, Mr. Deputy Speaker.
Purposely lowballing the numbers so he could build up his election
slush fund. But here’s the question. If he was . . . if his
projections were going forward at 3.39 and SaskEnergy’s
projections were going forward at $7 as they were going through
the rate review panel process, then they continue to maintain two
sets of books. One for the Minister of Finance to lowball his
revenue projections, and one for SaskEnergy to justify an increase
that we have now learned may be up to $2 too high — per
gigajoule, per gigajoule.
And
you spread that out over the consumer base and over what
SaskEnergy says they’re going to buy, and the figure you come up
with that taxpayers will be on the hook for because they didn’t
act at $5.56, is $100 million plus. That is what they cost the
taxpayers because they couldn’t get their act together; because
they couldn’t decide what the price of gas was. Well, Mr.
Speaker, there’s a constructive reason for the motion. It
isn’t just to get a final and definitive explanation as to why
these prices are different. There’s the other constructive
motive behind this particular motion, Mr. Deputy Speaker, is to
make the government fully understand the gravity of the situation.
To present to them what the price of gas is, through until October
2002, as defined by the markets today and yesterday and Friday
when it was announced, and to plead with the cabinet to make their
decision based on the real price of gas, not the imaginary price
of gas, not the price that apparently — and given by the answers
we got in question period today — not by the price that
SaskEnergy apparently has locked us into. Because this government
opposite has stood on every occasion and trumpeted the
accomplishments of SaskEnergy. And we also have recognized what
the hedging program did for consumers over the winter months —
there’s no question of that; it’s a matter of the public
record, Mr. Deputy Speaker. But if you are practicing hedging,
when the prices are falling, it is . . . it absolutely will lead
to disaster because you will lock in at a higher price as the
market falls. And that is the basic question we ask and we will
continue to ask until we get an answer: did SaskEnergy lock us in
at a high price for natural gas, higher than $5 to 5.56, for
example? And if they did, and if they did, Mr. Deputy Speaker, how
much did they lock in at that price, and exactly what was the
price? How can the people of Saskatchewan have a meaningful
discussion about potential relief this government might provide
them, that this government might provide them, without a knowledge
of what SaskEnergy has charged for the gas, what they’ve locked
in at? And now the House Leader is yelling from his seat, as he
often does, Mr. Deputy Speaker. The House Leader is yelling from
his seat. And it’s a sign, Mr. Speaker, because he leads in
terms of this Assembly, in this House, he leads a group of people
whose track record is all about broken promises. He leads a group
of people who thought nothing of breaking their health care
promises in terms of the wait to get emergency attention. He leads
a group of people that say they oppose privatization and in the
back room they’re . . .
Mr.
Wall:
— Well, Mr. Deputy Speaker, truth be known, I’m also
interested in how I might tie that to the issue that we’re
discussing, except to say this: that this motion, Mr. Deputy
Speaker, again speaks to the fact that the government seems to
have two sets of books. And now we know that in this debate —
and now the House Leader’s listening and I’m glad to hear it
because he’ll agree with this I think — in this debate there
are three prices that we’re talking about. There’s the
minister of SaskEnergy’s price. There’s the minister of
SaskEnergy’s price . . .
Mr.
Wall: — Thank you, Mr. Deputy Speaker. There are
three prices in this debate we’re talking about. Two of them are
referenced in the motion. There is the price of the minister of
SaskEnergy. That’s about $7 a gigajoule. And they have been firm
on that. They have been firm on that. It’s all over their rate
application. It’s all over it. It’s what the minister has
said. It’s what Ron Clark told the Standing Committee on Crown
Corporations. They’ve been on that, Mr. Speaker. There’s a
second price and that’s the Minister of Finance’s price for
natural gas. And that price is 3.39 a gigajoule to 2002. And
he’s been all over that one too, Mr. Deputy Speaker. He stood up
in this House and basically said his colleague, the minister of
SaskEnergy, is all wet. He said he’s wrong; I’m right — 3.39
is the price. And he’s never bothered to realize, amazingly
enough, he’s never bothered to realize that that means we will
be getting gouged if the price will be 3.39 by the end of this gas
year — the one we’re talking about. We are going to be gouged.
We will be gouged, to be sure, by this government. But anyway,
that’s the second price — $3.39. And then there’s the third
price, Mr. Deputy Speaker. There’s the third price. And that’s
the prices we’ve been raising in the Assembly; the one we raised
today; the price the market has determined. The real price for
natural gas bought over until October 2002. I’ll make that point
again because they’ll stand up and say, well what happens if the
price changes tomorrow? No, no, Mr. Deputy Speaker, you could have
bought as much gas as you wanted today through until October 2002
for $5.56 a gigajoule. That’s the real price and it’s time
this government — this government in this debate — stood up
and explained why they’ve got two prices for natural gas and
none of them are right, Mr. Deputy Speaker. It’s time they had
an explanation for that. And so I move,
Mr. Deputy Speaker, seconded by the member for Saskatchewan
Rivers: That this Assembly request that the Minister of Finance
and the Minister of CIC immediately give a full explanation
regarding the discrepancy between the budget projections for
natural gas prices of $3.39 per gigajoule for 2002 and
SaskEnergy’s projection for natural gas prices of approximately
$7 per gigajoule for 2002 on which the NDP government based its
request for a 42 per cent rate increase to SaskEnergy customers.
Thank you, Mr. Speaker. |
