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The BC Oil and Gas Commission (Commission) will be implementing an industry natural gas production levy decrease from $0.85 per 1,000 m3 of marketable gas produced, to $0.77.

EFFECTIVE: April 2020 Production

The BC Oil and Gas Commission (Commission) will be implementing an industry natural gas production levy decrease from $0.85 per 1,000 m3 of marketable gas produced, to $0.77 to compensate for an increase in the liability levy for orphan site restoration. The effect is revenue neutral and the cost to industry remains the same.

The Fee, Levy and Security Regulation (FLSR) under the Oil and Gas Activities Act (OGAA) is the tool by which the Commission acquires funds to meet its regulatory obligations and recover expenses. Current fees, levies and securities are noted in the FLSR.

Current estimates require $15 million of industry levies to sustain the Orphan Site Reclamation Fund (OSRF). As previously announced in INDB 2019-01, the liability levy ensures permit holders pay their share of the total deemed liability for wells and facilities and is being phased in over three years. For the 2020/21 fiscal year, a greater share of OSRF funding will come from the liability levy (75 per cent) and a lesser share of OSRF funding will come from the Commission’s production levy (25 per cent). By the 2021/22 fiscal year, 100 per cent of levies required to fund the OSRF will come from the liability levy. To account for the lesser share of OSRF funding from the Commission’s production levy, natural gas levies are being reduced to $0.77 per 1,000 m3 of marketable gas.

The Commission’s regular rate review has resulted in this change, which takes effect beginning with April 2020 production, and will appear on the June 23, 2020 invoices.

If you have any questions regarding this Industry Bulletin, please contact:

Joel Cave

Director, Finance & Administration

BC Oil and Gas Commission

Joel.Cave@bcogc.ca

250-419-4412

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