British Columbia’s oil and gas companies will pay a higher fee this year, and moving forward, to help clean up and restore orphan well sites.
The BC Energy Regulator (BCER) has increased the total Orphan Site Restoration Levy to $24 million.
In 2019, the Dormancy and Shutdown Regulation (DSR) was introduced. It requires the timely closure and restoration of oil and gas sites.
Since then, oil and gas permit holders have been invoiced $15 million annually under the Fee, Levy and Security Regulation to fund the cleanup of inactive well sites.
Companies paid that fee earlier this year, but the BCER will request an additional $9 million on November 3.
The BCER uses the Levy to hire private contractors who take care of the orphan site restoration work.
The regulator said 80 percent of orphan sites had been decommissioned and 30 percent had been restored as of March of this year.
It said additional funding is required to address recent orphan designations, adding that more wells have been decommissioned than drilled each year since 2019.
Each company’s share of the Levy is based on its deemed liability, the value of its wells and facilities, compared to the total liability across all permit holders.