Small independent oil operators who own land with wells are cashing in on a little-known loophole whereby they can haul crude to a refinery and forgo the commercial gasoline market.
This allows independents to sell gasoline and diesel without having to hand over tax revenue to different levels of government.
The Petroleum Development Act passed during the government of Ernest Manning, had a provision to locally develop resources. While most of the law has been rescinded, there is a provision that spells out that people who outright own the surface rights of the parcel and develop a well, can refine a certain quantity of oil for “…industrial uses pertaining to the development of the resources, or finance further development of the resource through small commercial sales."
For Billy Mcwiggins who lives north of Drumheller, because the family farm is still in his name, he can take advantage of the provision. Royalties are still paid to the province.
This means he can haul up to 500 Bbl a year, just over three fills of his tanker to Bowden, where he is able to receive about half the volume in gas or diesel.
Typically he would do this once a year to use for his business as well as his small cow-calf operation, but since the rise in oil prices, he has done it twice. Before he would share the discount with his neighbours, and pass along the savings of about 37 per cent without the tax.
With retail fuel hovering around $1.67, he is able to sell for about $1 per litre. He decided that he would use up his allotment, by selling to consumers.
“I feel a little like Robin Hood, but I’m not," he sheepishly grins. “While I can provide a discount for the driver, I’m also making a little bit of money on the side”.
He spent March 23 parked in Hanna and sold out within the afternoon. He specifies that he will only fill a maximum of a standard truck tank and two five-gallon jerry cans per customer.
Mcwiggins will be at the Drumheller Mail Parking lot on Friday until 12:00 noon.
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