The provincial government is introducing a new oil and gas royalty system that will eliminate the Deep Well Royalty Program, BC’s largest fossil fuel subsidy.
Provincial officials say it will also eliminate other outdated and ineffective programs, such as the Marginal Well, Ultramarginal Well, Low Productivity Well Rate Reduction and Clean Growth Infrastructure Royalty programs.
“Our province is endowed with abundant resources, which belong to all of us. But for too long, a broken system of fossil fuel subsidies has failed to align with our climate goals or ensure people fully benefit from these resources,” Premier John Horgan said in a statement.
“That’s why we’re fixing the outdated oil and gas royalty system by eliminating BC’s largest fossil fuel subsidy. This will give British Columbians a fair return and allow us to invest in their priorities, such as improving services, reducing costs and fighting carbon pollution.
According to the province, the new system will apply to all new wells and will be phased in over two years beginning Sept. 1.
“This new system is long overdue and will replace an outdated system that has been in place for almost three decades,” said Bruce Ralston, Minister of Energy, Mines and Low Carbon Innovation in a statement. .
“This will support vital public services, like roads and hospitals, while advancing ongoing environmental protection for British Columbians.”
The minimum royalty rate is increased from 3% to 5%.
Provincial officials say the increase will provide more revenue for public services and climate action.
They say existing credits will expire in four years unless they are transferred to an environmentally focused land healing and emissions reduction pool.
– With files from Josiah Spyker