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In accordance with Part 11 of the Oil and Gas Conservation Act, the Energy Resources Conservation Board (ERCB) is, by regulation, prescribing an Orphan Fund Levy in the amount of $12 million. This levy is based on the revenue requirements identified by the Alberta Orphan Oil and Gas Abandonment and Reclamation Association (Orphan Well Association) in its 2012/2013 budget.
The ERCB will allocate the Orphan Fund Levy among licensees and approval holders included within the Licensee Liability Rating (LLR) and Oilfield Waste Liability (OWL) programs based on the February 2012 monthly assessment. Information on these programs is contained in Directive 006: Licensee Liability Rating (LLR) Program and Licence Transfer Process; Directive 011: Licensee Liability Rating (LLR) Program – Updated Industry Parameters and Liability Costs; and Directive 075: Oilfield Waste Liability (OWL) Program.
All licensee and approval holders within the LLR and OWL programs will be invoiced for their proportionate share of the Orphan Fund Levy in accordance with the following formula:
Levy = A/B × $12 000 000
A is the licensee’s or approval holder’s deemed liability on February 4, 2012, for all facilities, wells, and unreclaimed sites included in the LLR and OWL programs, as calculated in accordance with Directive 006, Directive 011, and Directive 075, and
B is the sum of the industry’s liability on February 4, 2012, for all facilities, wells, and unreclaimed sites included within the LLR and OWL programs, as calculated in accordance with Directive 006, Directive 011, and Directive 075.
Each licensee’s or approval holder’s required Orphan Fund Levy is based on its ERCB licensed and approved properties, according to ERCB records, as of February 4, 2012. Facilities included under the Large Facility Program are excluded.
A licensee or approval holder may review its deemed liability in the LLR and OWL programs at any time through the Digital Data Submission system on the ERCB web site at www.ercb.ca.
All Orphan Fund Levy invoices and penalties will be sent to the attention of the chief financial officer and mailed to the address on file with the ERCB at the time of issuance. Orphan Fund Levy invoices will be mailed no later than February 8, 2012. If a licensee or approval holder does not receive its Orphan Fund Levy invoice by February 15, 2012, it is the responsibility of the licensee or approval holder to contact the ERCB, using the contact information below, and request a copy.
All Orphan Fund Levy invoices must be paid by the licensee or approval holder no later than March 9, 2012. Payment must be in Canadian currency and by either cheque, money order, bank draft, or cash.
Please note that all payments must be made payable to the ERCB, and that failure to pay the full invoiced amount by March 9, 2012, will result in a penalty of 20 per cent of the original invoiced amount being assessed to the licensee or approval holder along with the issuance of a notice of low risk noncompliance in accordance with Directive 019: Compliance Assurance.
Subsequently, where a licensee or approval holder fails to comply with a notice of low risk noncompliance, the licensee or approval holder will be issued a low risk enforcement action and be subject to any one or more of the enforcement consequences provided for in Directive 019.
Any appeal of the invoiced amount must be made in writing by March 9, 2012, in accordance with Section 76 of the Oil and Gas Conservation Act, and be either mailed to:Rob Kennedy
or submitted electronically, to the attention of Rob Kennedy, at LiabilityManagement@ercb.ca
Notwithstanding the filing of an appeal, payment in full of the original invoiced amount is required by March 9, 2012, to avoid the 20 per cent penalty and the issuance of a response in accordance with Directive 019. The ERCB will refund any overpayment resulting from a successful appeal to a licensee or approval holder within 30 days of the appeal decision.
Questions about this bulletin should be directed to the Liability Management Helpline at (403) 297-3113 or to LiabilityManagement@ercb.ca.
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Field Surveillance and Operations Branch