POP: Fees for Drilling Additional Legs off an Existing Oil and Gas Well

POP: Yes
Res #: POP 1-13A
Number: 1
Year: 2013
Midterm: No
Expired: No
Responses Received: No
Departments: Saskatchewan Ministry of Government Relations

WHEREAS municipalities are authorized under The Municipalities Regulations to charge fees for the drilling of oil and gas wells; and

WHEREAS municipalities are not afforded the same authority to charge fees for the drilling of additional legs off of an existing well; and

WHEREAS the drilling of an additional leg(s) off of an existing well can result in impacts to municipal infrastructure similar to those from the drilling of new oil and gas wells;

BE IT RESOLVED that SARM lobby the Province to allow municipalities to charge fees for the drilling of additional legs off of an existing oil and gas well similar to those for new oil and gas wells as set out in The Municipalities Regulations.

Response from Honourable Jim Reiter, Minister of Government Relations

The provisions under The Municipalities Regulations respecting fees for drilling oil and gas wells are consistent with the current provincial practice.  The province charges an initial development fee for the vertical drilling of an oil and gas well.  Any additional legs that are drilled horizontally from the existing well are not subject to further fees.

Before amendments of this natme would be considered, extensive consultations would be required with industry stakeholders such as the Canadian Energy Pipeline Association, Enbridge Pipeline Inc., the Canadian Association of Petroleum Producers, the Explorers and Producers Association of Canada and the Ministry of Economy.  As with the above proposal, government would also need to consider whether such amendments are consistent with the Saskatchewan Plan for Growth.

Updated response from the Ministry of Government Relations dated July 4, 2017