Ponoka County will take small hit if province makes changes

Ponoka County will take small hit if province makes changes

Shallow gas wells may cause more financial trouble for Alberta municipalities

The financial viability of Ponoka County won’t be compromised if more tax revenue is removed, whether it is due to the province or if more energy companies go down the hole.

Reeve Paul McLauchlin broached the topic during council’s meeting May 28, commenting on the sad state of the industry.

“There are seven coalbed methane (CBM) gas well companies in dire straits. These dry wells are assessed at the same rate, but cost $250,000 to drill,” he said, adding CBM production is a long, slow process.

“It’s a low, 30-year production run and other natural gas wells are still alive due to selling off the fluids that come with it. CBM’s don’t have that and if natural gas prices go lower, that will drive these companies out of business.”

McLauchlin added that Trident Exploration, which abruptly shutdown last month, left several counties with millions in tax arrears that can’t be collected.

“(Premier) Kenney has stated that municipal taxes on these wells will be part of the conversation. Municipalities have been asked for a solution, but the problem is that we don’t control the assessment and deferment has been tried and failed,” he said.

The county doesn’t have many of these CBM wells, so CAO Charlie Cutforth isn’t concerned about taking a tax hit. However, he added that even if the hit was serious, the county is in a good position to survive.

“If it is bad then if we have to go to residents with the first tax increase in about 30 years — that’s going to be a lot easier to pitch,” he said.

Budget report

Cutforth provided council with a status update on the 2019 financial picture and it all seems to be going well.

Penalties on taxes have already reached $181,000 on a budget of $200,000. Meanwhile, sales of some assets have taken in more this year plus water access fee funds have more than doubled the $68,000 budget already.

As for county donations, $847,000 has been dished out including over $620,000 paid to area ag society projects.