Alberta Energy Regulator reveals shocking findings in 2023 liability report
- In 2023, over $1 billion was spent on closure work in Alberta's oil and gas industry.
- A 5% decrease in inactive wells was reported, falling from 83,000 to 79,000.
- The AER's report indicates continued effort will be essential to manage oil and gas liabilities effectively.
On December 5, 2024, the Alberta Energy Regulator (AER) released the 2023 Liability Management Performance Report, highlighting significant progress in the cleanup of oil and gas infrastructure in Alberta, Canada. The report indicates that over $1 billion was spent on closure work in the province, which includes funds from licensees and government programs aimed at rehabilitating inactive sites. The AER noted that the amount spent by licensees exceeded the closure quota by 10%, reflecting a proactive stance towards managing conventional oil and gas liabilities. In 2023, the total amount reported by industry licensees reached $769 million, funded through various initiatives including $174 million from the Government of Alberta’s Site Rehabilitation Program and $149 million from the industry-funded Orphan Well Association. Notably, compliance with the closure quotas stood at 91%, with only 54 licensees failing to meet their obligations, representing less than 1% of total closure spending requirements. This indicates a concerted effort among industry players to address their environmental responsibilities. The report also showed a 5% decrease in the number of inactive wells, dropping from 83,000 to 79,000. This reduction in inactive infrastructure is a direct result of the enhanced focus and funding towards closure activities. It underscores the AER's commitment to improving the management of oil and gas industry liabilities and establishing transparency in this process. The previous strategies and programs initiated by the Government of Alberta since 2020 have clearly worked towards improving compliance and transparency in liability management, but continued efforts will be needed to sustain this momentum. The Liability Management Report not only tracks the overall progress of the industry but also serves as a benchmark for individual licensees. It includes an analysis of trends in infrastructure growth, liability estimates, and closure activities, providing a comprehensive overview of the sector's performance in maintaining ecological stewardship. As Alberta progresses towards an environmentally responsible future, these reports are essential for assessing how well the oil and gas sector adapts and fulfills its regulatory and liability obligations.