Industry Levy – Facilities
In 2019, the Government of Alberta permitted the AER to review the administration funding of the AER. In two phases, the AER evaluated the calculation of the fees.
In Phase 1, the AER reduced the base fees for service wells and wells producing less than 600 cubic meters per year for 2020/2021.
In Phase 2, the AER reviewed other jurisdictions and evaluated options to change based on jurisdictional review and survey results. The AER also held workshops with each industry sector (oil and gas, oil sands, and coal) to review proposed changes.
The objectives of this review were the fair allocation of the levy to the sectors it regulates. Following its findings from Phase 2, the AER determined that the following changes are the most effective:
Base the levy allocation on a three-year rolling average of AER staff effort for each sector (i.e., full-time equivalent personnel supporting the sector), starting with the invoices issued in September 2021. Currently, levy allocations are based on the estimated AER staff effort spent supporting each sector. Levies for pipelines, larger facilities, and new industry sectors, such as geothermal, would also be calculated using the three-year rolling average.
Add two additional production classes for wells producing over 8000 m3/year and new base fees for each class to the rate tables for the oil and gas sector for Fall 2021.
Include inactive oil and gas wells in the oil and gas sector levy in the rate tables for the oil and gas sector for 2021, charging a base fee of $42/well before applying an adjustment factor that ensures that the total administration fee collected for the sector satisfies the revenue requirement for the AER.
Introduce a new levy on pipelines based on pipeline classes determined by their diameter. The levy would be phased in for spring 2022 and reflect the total amount of staff effort by 2024 as each year of effort is determined.
A new larger facility levy that would apply to 26 gas plants with approved inlet rates greater than 10 million m3/day and four stand-alone oil sands facilities. The larger facility sector allocation would be prorated based on gas plants’ inlet rate and production capacity for stand-alone facilities. The levy will be phased in for spring 2022 and reflect the total staff effort by 2024 as each year of effort is determined.
A review of the changes and decision regarding the proposed changes from the Government of Alberta is expected in the Fall of 2021.
For the 2021/2022 levy, the Government of Alberta approved a total industry levy of $207.6 million.