Resolution 29-02A 

WHEREAS, Saskatchewan Agriculture and Food is compensated by energy companies for surface damage encountered with oil and gas development; and

WHEREAS, the compensation is generally in the form of an annual lease; andWHEREAS, the areas leased for gas and oil development are removed from grazing leases, however the grazing leaseholder is still responsible for all taxes on the surface lands leased by the energy company; and

WHEREAS, the grazing leaseholder is allowed $200 per site for the first year of development and an annual fee of $100 per year thereafter; and

WHEREAS, Saskatchewan Agriculture and Food does not actively manage properties leased to oil and gas companies; and

WHEREAS, the management responsibility lies with the energy company and the grazing lease holder;

THEREFORE BE IT RESOLVED, that the fee to grazing leaseholders be increased to $400 for the first year and the subsequent annual fee be increased to $200 per site.

Response From the Hon. Clay Serby:

The Provincial Land Regulations provides the authority to issue surface lease for oil and gas development on land included in an agricultural lease. Upon issuing the surface lease, the land is removed from the agricultural lease and the farmer/rancher is no longer charged rent on the removed parcel, although they do have to continue to pay taxes.

At this time, the compensation that is currently paid is considered an equitable sharing of the revenue that is generated by the oil and gas development. No changes are contemplated for the 2002-03 fiscal period.