The Patch

State­ment from the Al­berta En­ergy Reg­u­la­tor

The McLeod River Post - - The Patch - Spe­cial to the 3ost

Sev­eral me­dia out­lets have re­ported li­a­bil­ity es­ti­mates pro­vided by the AER in pre­sen­ta­tions to in­dus­try. We want to apologi]e for the con­cern and con­fu­sion that this in­for­ma­tion has caused. The num­bers are stag­ger­ing ± $260 bil­lion in to­tal li­a­bil­ity, which is $200 bil­lion more than we have con­sis­tently re­ported. This par­tic­u­lar es­ti­mate was cre­ated for a pre­sen­ta­tion to try and ham­mer home the mes­sage to in­dus­try that the cur­rent li­a­bil­ity sys­tem needs improve­ment. While the mes­sage to ad­dress li­a­bil­ity is im­por­tant, the num­bers were not val­i­dated and were based on a hy­po­thet­i­cal worst-case sce­nario. Us­ing these es­ti­mates was an er­ror in Mudge­ment and one we deeply re­gret. The AER-ver­i­fied cal­cu­la­tions es­ti­mate the cur­rent to­tal li­a­bil­ity at $58.65 bil­lion. We know that we have a lot of work ahead of us in the li­a­bil­ity space this was made ob­vi­ous dur­ing the re­cent eco­nomic down­turn and high­lighted in par­tic­u­lar with the Red­wa­ter rul­ing.

While we are still wait­ing for a de­ci­sion from the Supreme Court of Canada on the Red­wa­ter case, we have not been idle. Through 'irec­tive 067, we now re­quire more in­for­ma­tion at the time of ap­pli­ca­tion and have more dis­cre­tion to reMect ap­pli­ca­tions where an ap­pli­cant poses a risk to pub­lic safety or the en­vi­ron­ment. The di­rec­tive also al­lows the AER to re­view ex­ist­ing li­censees to man­age risk. En­ergy op­er­a­tors must dis­close fi­nan­cial in­for­ma­tion to the AER, such as au­dited fi­nan­cial state­ments and the ex­is­tence of in­sol­vency pro­ceed­ings. The AER has the author­ity to re­voke or vary ex­ist­ing li­cense el­i­gi­bil­ity or deny el­i­gi­bil­ity based on a com­pany’s fi­nan­cial dis­clo­sure.

We have also helped in­tro­duce the are­abased clo­sure pro­gram, which en­cour­ages op­er­a­tors to work to­gether in an area to close oil and gas in­fra­struc­ture. The pro­gram ben­e­fits in­dus­try and Al­ber­tans by re­duc­ing costs and the num­ber of in­ac­tive sites in the prov­ince.

Re­gard­less of the es­ti­mates, we are work­ing to pro­tect Al­ber­tans’ in­ter­ests ± from in­tro­duc­ing pro­gres­sive recla­ma­tion and area-based clo­sure to work­ing di­rectly with com­pa­nies to re­duce in­ven­tory and in­tro­duc­ing new re­quire­ments that im­prove over­sight of which com­pa­nies can hold a li­cence.

The AER will con­tinue to pro­tect what mat­ters to Al­ber­tans safety, the en­vi­ron­ment, and the eco­nomic ben­e­fit that comes from the de­vel­op­ment of our en­ergy re­sources.

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