Province shifting from orphan well tax to liability levy to meet obligations
Photograph By DANIELAZOCAR/ISTOCK
An energy company operating in B.C.’s northeast and now in receivership has left 300 to 500 wells facing possible designation as orphan – or abandoned – at a potential cost of $40 million to $90 million to the B.C. Oil and Gas Commission (BCOGC).
The figures were delivered in the provincial energy regulator’s 2019-20 to 2021-22 service plan released as part of the provincial budget Feb. 19.
B.C. has an orphan well tax, aimed at covering costs of abandonment and restoration of orphan wells, test holes, production facilities and pipelines. The current tax is $0.06 per cubic metre of oil production and $0.03 per 1,000 cubic metres of marketable gas.
This spring, Currie said, that tax will be eliminated and a liability levy phased in over three years. MORE