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January 2024


In July 2020, the Government of Alberta announced a new liability management framework, and the AER released new requirements through Directive 088 in December of 2021. This report tracks industry performance as it relates to liability management and the impact of the liability management requirements over time. The purpose of this report is to improve transparency about industry’s management of conventional oil and gas liabilities and to develop performance measure baselines and ongoing assessments both of industry as a whole and licensees specifically. This report will be updated annually, and additional data will be added as the liability management program expands.

  • In 2022, the industry-wide closure spend requirement was set at $422 million. Together, licensees spent over $696 million, surpassing the requirement by 65%.
  • 90% of licensees were compliant with their 2022 closure quota, leaving 51 noncompliant licensees with an outstanding amount of $4.2 million in missed closure quota (1% of industry wide closure spend requirement).
  • In total, over $1.2 billion was spent on closure in 2022, which comprised the licensees’ reported eligible spend of $696 million and closure spend funded by from the Alberta Government’s Site Rehabilitation Program (SRP) and the industry-funded Orphan Well Association (OWA).
  • Industry continues to work on the backlog of inactive infrastructure. In 2022, the inactive well count decreased from 91 000 to 83 000 (9% decrease). 

View the Liability Management Performance Report:

Section 1: Conventional Oil & Gas Infrastructure
The energy industry has been a main driver of Alberta’s economy for many decades. Over time, this has led to an accumulation of infrastructure – wells, facilities and pipelines.

Section 2: Liability Estimates
We estimate liability using calculations outlined in Directive 011 and through site-specific liability assessments.

Section 3: Closure Spend Data
When closure work is completed, industry reports the costs to the AER.

Section 4: Impact of Closure Spend on Liability Estimates
Closure work occurring in 2022 contributed to a reduction of $315 million in overall liability (from January 2022 to January 2023).

Section 5: Orphan Fund Levy
Every year, the AER issues an orphan fund levy to licensees to ensure that the OWA has an operating budget.