Alberta Energy Resource Conservation Board Changes Licensee Liability Rating Program

Effective May 1, 2013, the Alberta Energy Resource Conservation Board (the ERCB) is implementing changes to the Licensee Liability Rating Program (the LLR Program). These changes will result in amendments to ERCB Directive 006: Licensee Liability Rating  (LLR) Program and Licence Transfer and Directive 011:Licensee Liability Rating(LLR) Program: Updated Industry Parameters and Liability Costs (collectively, the LLR Program Changes). One major effect of the LLR Program Changes is that it will require 248 licensees to post financial security of $297 million in accordance with the LLR Program, up from the current 88 licences that have posted deposits of approximately $13 million to date. According to the ERCB, the changes were made to address concerns raised by industry groups that the LLR program, which was last updated in 2006, significantly underestimated abandonment and reclamation liabilities.