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Tuesday, August 20, 2019
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Home Energy News Oil and Gas Commission increases levy to cover orphan site restoration

Oil and Gas Commission increases levy to cover orphan site restoration

FORT ST. JOHN, B.C. – The B.C. Oil and Gas Commission will be increasing the levy charged to producers to help raise funds for their orphan site restoration program.

The Commission announced it would be increasing the gas production levy to $.085 per 1,000 m3 of marketable gas from $.071.  The levy will also be applied to oil production.  That levy will increase to $1.58 per m3 from $1.30.

The new rates will take effect at the beginning of October.

Beginning April 1, 2019, the Commission will introduce a new liability levy that will replace the existing orphan tax ($.03 per 1,000 m3 marketable gas and $.06 per m3 petroleum). The production levy increase will also continue to support the orphan site restoration fund over a three year period, while the liability levy is phased in.

By 2021/22, the liability levy will provide the entire estimated $15 million per year required to sustain the orphan fund. Oil and gas well sites, test holes, production facilities and pipelines may be deemed as orphan sites when the operator is insolvent or cannot be located.

Due to an increase in orphan sites in recent years, spending on orphan treatment has tripled to almost $15 million in 2018/19.

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