The Municipal District of Bighorn will lose a portion of its annual revenue in 2015 due to the planned shutdown of the Burnt Timber gas plant.
Glen Sine, a representative of Shell Canada, which owns the plant, told Bighorn councillors Dec. 10 during a regular council meeting that Shell is planning to shut the plant down in 2014. The pipelines, however, will remain buried in place.
Shell’s operating license for the plant expires June 15 and the shutdown will begin then, Sine said.
Bighorn Reeve Dene Cooper said closure of the Burnt Timber gas plant would mean the municipality loses approximately 10 per cent of its annual income.
The Burnt Timber gas plant contributes roughly 20-25 per cent of the MD’s revenue, however, as Cooper pointed out, taxation on the pipelines, also known as linear taxation, will remain even after the plant has been decommissioned.
“We don’t lose it all,” he said. “That is the plant taxation plus the linear taxation.The linear taxation is still in place, so where it might have been a $700,000 hit, I’m expecting a $300,000 to $400,000 hit.”
Cooper added later that the conservative estimate is $300,000, or six per cent of the MD’s total taxation revenue.
Sine told councillors it is no longer economical for Shell to keep operating the plant, located in the MD 117 kilometres northwest of Calgary, due to declining production and the current and future forecasts of natural gas.
Some of the remaining gas in the Burnt Timber gas field will be piped to other nearby plants for processing.
“This shutdown was expected and expected this decade. That field in the ’60s produced over 89 per cent of the gas available to us with the well we have drilled and that is a best-in class, a world-class, number,” Sine said.
Shell has no plans to sell the property. Instead, it will decommission the facilities and reclaim the land.
“At this time there is no consideration of any other use on this landscape. It was always our intent to reclaim it in discussions with partners, but it is Shell’s intent to shut it down and properly remediate that site.”
Cooper described Shell Canada and the Burnt Timber gas plant as a valuable asset.
“In the 1960s, we were very remote and a very low development ID (improvement district). In 1988, the ID became the MD and the fact that the boundaries were changed and Burnt Timber gas plant was put into the MD was the tipping point to give us sufficient assessment to move forward and become an MD.
“They are excellent corporate citizens and have been. Their presence in our community has been greatly appreciated and their contribution has been appreciated. We’re sad to see them go and we know that they are at 90 per cent exhaustion and we wish them well as they move into other endeavours.”
The closure of the Burnt Timber gas plant is a wake-up call for the MD, Cooper said, as it reminds the municipality that resource extraction, including rock quarries, have a life span.
“This is why we’re taking our communities and making them taxation balanced, with a certain amount of light industrial and a certain amount of residential. As our resource-based taxation diminishes we have to use those monies to find ourselves in a new commercial market base.
“That could be tourism. It could be light industry. It could be light production. We have to now understand that on the horizon, we have to have a plan and it has to be in place over time,” Cooper said.