Well Drilling License Fees

Res #: 12-02M
Number: 12
Year: 2002
Midterm: Yes
Expired: Yes
Responses Received: No
Departments: Saskatchewan Government Relations

Resolution 12-02M

WHEREAS, Section 213 (1) (b) of The Rural Municipality Act, 1989 authorizes a council to pass a bylaw for the purpose of classifying and licensing mining contractors and oil and gas well drilling contractors conducting business in the municipality; and

WHEREAS, the schedule fees applicable to this Section are subject to the approval of the Minister; andWHEREAS, the last time the schedule of fees was reviewed was January 1991, when a maximum amount of $450 for the drilling of an oil and gas well and $225 for drilling any other hole, other than seismic testing, was prescribed; and

WHEREAS, during the past 10 years the municipal costs associated with the drilling of oil or gas wells and other holes has increased dramatically (i.e. grading and gravelling

THEREFORE BE IT RESOVLED, that the Minister be requested to review the schedule of fees and prescribe fees more in line with 2002 costs, and that suggested fees be $800 for the drilling of oil and gas well and $400 for drilling a hole other than for seismic testing.

Response From GRAA:

Since 1996, provincial departments are required to review their regulations on a regular basis to keep them current and relevant. The Rural Municipality Oil Well and Gas Well Drilling Fee Schedule Regulations under The Rural Municipality Act, 1989 is scheduled for review in this fiscal year.

Stakeholder feedback will be taken into consideration before a decision is finalized. This will need to include feedback from municipalities and the oil and gas industry, as well as other provincial departments.

The licensing of oil and gas well drilling activity is a discretionary power of municipalities. Municipalities may decide to charge the license fee on oil and gas well drilling operators.

GRAA expects that the oil and gas industry will advocate for the total removal of the fee. RMs are requesting that the license fees be increased to pay for the maintenance, construction and repair of roads required by the oil industry, and to partially compensate for the delay in the collection of property taxes on new wells.

Resolving this situation will be a primary goal of the review.