Alberta Energy Regulator's Liability Closure Report

You may have seen news stories about the Alberta Energy Regulator’s (AER’s) most recent report on closures and liability last week. This article presents some of the report's highlights and considers municipalities’ next steps.

Closure refers to an energy company’s responsibility to decommission, remediate and reclaim their sites. Liability refers to an energy company's costs and responsibilities associated with closure.

Highlights from AER’s report

The number of active wells in Alberta declined between 2002 and 2010. The number of inactive wells grew by five per cent annually from 2000 to 2020. Industry is responsible to address the liability for closing these wells.

The quota set by the AER to address this liability was set at $422 million a year in 2022. In this same year, industry spent $696 million on closures. Through this period, the number of inactive wells decreased by nine per cent, meaning approximately 8,000 wells were closed and removed from the backlog of inactive wells.

Next steps for municipalities

It is in municipalities' best interests to know the location of inactive wells located within municipal boundaries, and if any inactive wells are located on lands that are under annexation.

The AER plans to release a follow-up report that presents this information at the municipal level. The AER will consult municipalities to find out how this data can be shared with municipalities most effectively. The AER plans to conduct an engagement session at the upcoming ABmunis Infrastructure Committee meeting.

Please contact Director clint [at] (Clint Neufeld )if you would like more information on this initiative.