The Government of B.C. is conducting a comprehensive review of its oil and gas royalty system and will release the outcome in February 2022.

The ministry of energy announced the review on Thursday, saying it’s to ensure the system is modernized, aligned with the government’s climate goals and provides a fair return for British Columbians.

The system was implemented in 1992, almost 30 years ago, in the Petroleum and Natural Gas Royalty and Freehold Production Tax Regulation. Natural gas production, market conditions, technology and costs, have “changed significantly,” the ministry said.

The Deep Well Royalty Credit Program was created in 2003 to offset higher drilling and completion costs incurred by wells that are considered particularly deep.

“The review process we are launching will allow the public to have their say on a new, modernized royalty system that meets our goals for sustainable economic development,”  said Bruce Ralston, Minister of Energy, Mines and Low Carbon Innovation, who was tasked with the review from Premier John Horgan.

Additionally, the ministry is releasing an independent review of the royalty system conducted by Simon Fraser University professor Nancy Olewiler and University of Calgary professor Jennifer Winter.

“I want to thank Dr. Olewiler and Dr. Winter for their independent, thorough and fact-based assessment of B.C.’s current royalty system,” Ralston said. “Government takes this situation very seriously and will work toward an overhaul of the current system that eliminates outdated, inefficient fossil-fuel subsidies and ensures British Columbians get a fair return on our resources.”

The ministry says the duo’s review will be released in November and will support the development of a discussion paper on options to establish a modernized system.

A public consultation is set to take place after the independent assessment. The ministry says it will seek feedback from industry, stakeholders, First Nations and residents.