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ARTICLE · 06 AUGUST 2020

Alberta Announces New Oil And Gas Liability Management Framework

The Alberta government has announced a long-awaited new liability management framework (LMF) for the oil and gas industry to better address the growing inventory of inactive and orphaned sites...

CanadaEnergy and Natural Resources

The Alberta government has announced a long-awaited new liability management framework (LMF) for the oil and gas industry to better address the growing inventory of inactive and orphaned sites requiring permanent closure and to provide a more comprehensive and accurate assessment of oil and gas operators' financial capabilities to meet the new site closure requirements. The new LMF details are to be announced and implemented by the Alberta Energy Regulator (AER) “over the next few months” following consultation with industry and other stakeholders.

The problem

  • Currently licensees must abandon wells at the end of their productive lives (i.e., permanently plug them with cement and remove downhole and surface equipment), remediate any contamination and reclaim the site (i.e., replace the soil and re-establish surface drainage and vegetation), but there are no legislative timelines to do such work.

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