The provincial government says it is launching a review of the province’s oil and gas royalty system.
In an announcement Thursday, the energy ministry said the current royalty system was established in 1992 through the Petroleum and Natural Gas Royalty and Freehold Production Tax Regulation, but that natural gas production has "changed significantly” as have global concerns about climate change.
The Deep Well Royalty Credit Program was created in 2003 to offset higher drilling and completion costs incurred by wells that are considered particularly deep.
"B.C.'s royalty system was set up decades ago, and a comprehensive review is long overdue to make sure it is serving the interests of British Columbians," said Minister Bruce Ralston in a statement. "The review process we are launching will allow the public to have their say on a new, modernized royalty system that meets our goals for sustainable economic development."
The government has also released an assessment of the royalty system by Simon Fraser University professor Nancy Olewiler and University of Calgary professor Jennifer Winter. The ministry says their assessment will support the development of a discussion paper on options to establish a modernized royalty system, which will be released in November.
"Government takes this situation very seriously and will work toward an overhaul of the current system that eliminates outdated, inefficient fossil-fuel subsidies and ensures British Columbians get a fair return on our resources," Ralston said.
The ministry says a public consultation period will follow with industry, stakeholders, First Nations and the public. The ministry says the outcomes of the royalty review will be released in February 2022.
Read the assessment report in full below:
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