The Province has approved $13.7 million in royalty deductions to support the construction of 13 clean infrastructure projects through British Columbia’s new, innovative Clean Infrastructure Royalty Credit Program (CIRCP).

The CIRCP is the first of its kind in Canada, created alongside British Columbia’s new Climate Leadership Plan (CLP) in August 2016, to attract private-sector funding for clean technologies which will reduce greenhouse-gas emissions (GHGs) linked to the exploration and production of B.C.’s petroleum and natural gas resources, commonly referred to as upstream development.

The projects approved under the program include changing out older pneumatic devices and pumps for new, lower emitting machines and solar electric pumps. Other projects will install new infrastructure that can capture vented methane from compressors and recycle it for use.

Collectively, the 13 total projects are expected to reduce 0.18 megatonnes (MT) of greenhouse gas (GHG) emissions each year linked to upstream development.

British Columbia is aggressively reducing emissions from the petroleum and natural gas sector using a combination of targets, incentives, and new standards. The CIRCP is a major aspect of the incentives component of the new CLP, which targeted a 45% reduction in methane emissions by 2025 from upstream oil and gas infrastructure built before Jan. 1, 2015. Anticipated reductions from the 13 approved projects represent approximately 18 per cent of the methane reduction target set out in the CLP.

The total amount invested in new, clean infrastructure as a result of the CIRCP is expected to be $27.4 million. Companies will be required to fund the entire cost of their respective projects, and have emissions reductions verified, before they are eligible to recover up to 50% of their costs through royalty deductions – the $13.7 million total in royalty deductions. This is a similar competitive process used for B.C.’s long-running Infrastructure Royalty Credit Program (IRCP) where royalty deductions are awarded to companies who invest in new or upgraded roads and pipelines.

British Columbia’s royalty programs prompt year-round activity and create jobs by providing companies with an incentive to invest and help the petroleum and natural gas sector grow. The CIRCP complements British Columbia’s work to develop a liquefied natural gas industry (LNG) and export clean energy to Asia.

In July 2016, the Province awarded $120 million in royalty deductions through British Columbia’s IRCP that is supporting the construction of 15 infrastructure projects.

That program is expected to result in approximately $185 million reaching private sector companies, creating more than 1,640 new jobs. The most recent instalment of the IRCP was initiated on March 2, 2017.

Quotes:

Rich Coleman, Deputy Premier and Minister of Natural Gas Development –

“This program is about furthering our use of clean technology in the natural gas sector so we decrease greenhouse gas emissions while also supporting jobs for British Columbians. The program effectively garners new investment, supports economic growth and complements our work to have a cleaner, technologically advanced natural gas sector operating in the province.”

Quick Facts:

• The 13 projects will be built across a variety of locations: northeast of Fort Nelson in the Desan area, the Bivouac area southeast of Fort Nelson, areas northeast and northwest of Fort St. John, and an area south of Dawson Creek.
• There are seven upstream oil and natural gas producer companies involved in the 13 separate approved projects. The companies with projects approved, and eligible to receive royalty deductions once their project(s) are built, are: ARC Resources, ConocoPhillips Canada, Cutbank Ridge Partnership, Husky Energy, ISH Energy, Progress Energy, and Shell Canada.

Learn More:

For more information about the CIRCP: http://www2.gov.bc.ca/gov/content/industry/natural-gas-oil/oil-gas-royalties/clean-infrastructure-royalty-credit-program

For more information about B.C. royalties and royalty programs: http://www2.gov.bc.ca/gov/content/industry/natural-gas-oil/oil-gas-royalties/royalties-royalty-programs

For more details about British Columbia’s Climate Leadership Plan: https://engage.gov.bc.ca/climateleadership/