BC Oil & Gas Commission changed Orphan Liability Levy

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VICTORIA, B.C. – The BC Oil and Gas Commission (Commission) is changing how funds are collected for the Orphan Site Reclamation Fund.

The Commission states at the beginning of Apr. 1, 2019, the existing orphan tax will be eliminated and replaced by a new liability levy. The levy will ensure the Commission has adequate funds to restore all orphan sites in the province in a timely manner. The change is supported in legislation by amendments to section 47 of the Oil and Gas Activities Act authorized by Bill 15 in 2018.

The liability levy will be phased in over three years shared the Commission. The 2019/20 fiscal year will see 50 percent of orphan funding come from the new liability levy, increasing by 25 percent in each subsequent year. The remaining funding in these years will come from the Commission’s operating production levy as per Industry Bulletin 2018-20. By 2021/22, the liability levy will provide 100 percent of the annual levy required to fund restoration treatment of orphan sites.

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The proportion of the liability levy paid by permit holders is based on their share of the total deemed liability for wells and facilities under the Liability Management Rating (LMR) Program, established on the following calculation:

The Permit Holder Liability is equal to the deemed liability for each permit holder’s wells and facilities. The Total Liability is the sum of the deemed liability for wells and facilities of all permit holders in B.C. The resulting fraction is then multiplied by the amount to be raised by the liability levy, which is based on the projected orphan budget in each fiscal year.

The BC Oil and Gas Commission protects public safety and safeguards the environment through the sound regulation of oil, gas and geothermal activities n B.C. From exploration through to final reclamation, the Commission works closely with communities and landowners and confirms industry compliance with provincial legislation. It also ensures there are close working relationships; consults with, and considers the interests of Indigenous peoples.


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