Operators Take Note: Stricter Liability Management Regime Is Proposed In British Columbia

A stricter oil and gas liability management regime may soon be in effect in British Columbia. The BC government recently introduced Bill 15 (the "Bill") in response to the growing number of oil and gas sites in BC with insolvent operators ("Orphan Sites"). The abandonment and restoration costs of these Orphan Sites are estimated to be between $40 and $60 million while the Orphan Site Reclamation Fund (the "Fund") holds only $5.3 million according to a recent report published by the BC Oil & Gas Commission (the "Commission").

The Bill would increase contributions to the Fund and enhance the powers of the Commission to enforce permit holder abandonment and restoration obligations. The result will be a stricter and more expensive liability management regime for current and prospective permit holders in BC.