Oil and Gas Storage Tanks
Department: Saskatchewan Ministry of Government Relations
WHEREAS oil and gas storage tanks have historically been treated by assessors as structures which is consistent and equitable with the treatment of storage tanks elsewhere in the province, such as underground tanks at service stations;
WHEREAS industry has appealed the assessment of storage tanks associated with oil and gas sites and facilities arguing that they should be considered resource production equipment (RPE) based on the existing definition of improvement and wording in legislation;
WHEREAS the Saskatchewan Court of Appeal’s decision that oil and gas tanks are RPE will result in the potential removal of all storage tanks at non-well facilities (batteries) and storage tanks at active well sites would qualify for a -10% “downtime” allowance which is an adjustment for routine maintenance that is normally only applied to oil and gas well equipment;
WHEREAS the total potential tank assessment loss would be over $600 million if oil and gas tanks are deemed RPE instead of structures;
BE IT RESOLVED that SARM lobby the Ministry of Government Relations to amend existing legislation so that storage tanks, regardless of location, are assessed as improvements and not resource production equipment to avoid future misinterpretation of the intent of the legislation.