Increased Security: The ERCB Revises The Licensee Liability Rating Program

On March 12, 2013, the ERCB announced important changes to the Licensee Liability Rating (LLR) Program that will have a material impact on operators of oil and gas wells, facilities and pipelines, as well as their investors and lenders.

These changes, which will become effective on May 1, 2013, will be rolled out over a three year period and will result in a significant increase to the number of operators who will be required to post security and to the amount of security which will have to be posted by those operators.

Background

The LLR Program, which governs most conventional upstream oil and gas wells, facilities and pipelines aims to reduce the likelihood that the costs to suspend, abandon, remediate and reclaim a well, facility or pipeline will be borne by the Alberta taxpayers if an operator is unable to do so.