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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 their 2013/2014 budget.
The ERCB will allocate the Orphan Fund Levy amongst licensees and approval holders included within the Licensee Liability Rating (LLR) and Oilfield Waste Liability (OWL) Programs based on the February 2013 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.
Each licensee or approval holder included 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 2, 2013, 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, and
B is the sum of the industry’s liability on February 2, 2013, 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 licensed and approved properties, according to ERCB records, as of February 2, 2013. 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 (DDS) system on the ERCB website 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 7, 2013. If a licensee or approval holder does not receive their Orphan Fund Levy invoice by February 14, 2013, it is the responsibility of the licensee or approval holder to contact the ERCB to request a copy.
All Orphan Fund Levy invoices must be paid by the licensee or approval holder and received by the ERCB no later than March 11, 2013. Payment must be made payable in Canadian currency using an acceptable negotiable financial instrument, including a cheque, money order, bank draft, or cash.
All payments must be made payable to the ERCB; failure to pay the full invoiced amount by March 11, 2013, 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 of the enforcement consequences provided for in Directive 019.
Any appeal of the invoiced amount must be made in writing by March 11, 2013, pursuant to section 76 of the Oil and Gas Conservation Act and either mailed to:Anu Nandiwada
or submitted electronically, to the attention of Anu Nandiwada, to LiabilityManagement@ercb.ca.
Even if an appeal is filed, payment in full of the original invoiced amount is required by March 11, 2013, to avoid the assessment of 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 result of its appeal.
Questions regarding this bulletin should be directed to the Liability Management help line at 403-297-3113 or LiabilityManagement@ercb.ca.
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Field Surveillance and Operations Branch