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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 2011/2012 budget.(1)
(1) In June 2009, the Orphan Well Association received a $30 million grant from the Government of Alberta as part of the government’s economic stimulus plan. Conditions of the grant are that it be spent over two years and that the ERCB continue to collect the Orphan Fund Levy.
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 2011 monthly assessment. Information on these programs is 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 and 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 or approval holder’s deemed liability on February 5, 2011, for all of its 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 5, 2011, 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.
A licensee or approval holder may review its deemed liability at any time through the Digital Data Submission (DDS) system on the ERCB Web site at www.ercb.ca.
Invoices for the 2011 Orphan Levy will be mailed to, and must be paid by, the licensee or approval holder of record at the time of the February 05, 2011 assessment. Payment must be made in Canadian currency using a negotiable financial instrument payable in Canadian currency including a cheque, money order, bank draft, or cash. Orphan Fund invoices will be mailed no later than February 16, 2011, with payment required no later than March 18, 2011.
Please note that all payments must be made payable to the ERCB, and that failure to pay the full invoiced amount by March 18, 2011 will result in a penalty of 20 per cent of the original invoiced amount being assessed to the licensee or approval holder.
Failure to pay the invoiced amount by the due date will also result in the licensee being subject to the enforcement provisions of Directive 019: Compliance Assurance.
Any appeal of the invoiced amount must be provided in writing and either mailed to:Rob Kennedy
or submitted electronically, to the attention of Rob Kennedy, to:
Fax: 403-297-8114 or
Notwithstanding the filing of an appeal, payment in full of the original invoiced amount is required by March 18, 2011 to avoid the assessment of the 20 per cent penalty and the application of the enforcement provisions of Directive 019. The ERCB will refund any overpayment resulting from a successful appeal to a licensee or approval holder within 30 days of the receipt of its appeal.
Questions regarding this bulletin should be directed to Matthew Jordan at 403-355-4300 or Anu Nandiwada at 403-297-6417, Liability Management Group, of the Field Surveillance and Operations Branch.
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Field Surveillance and Operations Branch