New Liability Management Framework For Oil And Gas In Alberta

Overview

In its continued effort to reduce the number of orphan and inactive wells in the province, the Government of Alberta introduced a new Liability Management Framework in July 2020. In December 2021, the Alberta Energy Regulator (AER) released Directive 088: Licensee Life-Cycle Management, and the accompanying Manual 023, to implement the new framework. Licensees are responsible for ensuring their infrastructure and sites are safely closed and cleaned up. The AER describes the costs associated with this closure work as end-of-life obligations or "liability." The new framework uses a wider variety of parameters to perform a holistic assessment on licensees at all phases of energy development and ensures timely closure. The holistic assessment shows a licensee's risk and performance profile throughout the energy development life cycle. The new framework does not apply to oil sands mines and coal mines.