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The AER has authority through the Oil and Gas Conservation Rules to require security deposits throughout the energy development life cycle. The AER will consider results of the holistic licensee assessment, whether the licensee poses an unreasonable risk, and any other factor the AER considers appropriate when determining if security will be required. The maximum amount of security that may be required is the licensee's total liabilities, including the cost of providing care and custody and the cost to permanently end operations, which includes the abandonment, remediation and reclamation of the site.

As the AER works to implement the new liability management framework in phases, the security collection framework will also be updated in phases. The first phase, completed in 2021, made improvements within Directive 088 to use the holistic licensee assessment when considering whether to require security deposits and when determining the amount of security collected. These improvements apply to the licensee management program, inventory reduction program, and transfer applications. Our next phase is to replace the liability management rating security collection described in Directive 006 and develop a broader security framework for oil and gas. Further information on the development of the broader security framework is described in Bulletin 2023-41.

More detailed information on security deposits can be found in Manual 023: Licensee Life-Cycle Management and in Directive 068: Security Deposits.

Question: How do I request a refund of our security deposit?
Answer: A written refund request must be submitted on company letterhead and contain appropriate contact information. The request must be sent to the attention of the security deposit administrator of our Liability Management Group at @email.

Question: How do I know the total amount of security that is held in our name?
Answer: The Royal Bank of Canada provides a monthly account statement to each licensee that has paid a security deposit to us.

Question: We have not received an account statement for a number of months. Who should we notify to correct this? 
Answer: Your company will need to call our Finance Branch at 403-355-4574. Licensees may not make changes directly with the bank.

Question: Which financial institutions are eligible to issue letters of credit?
Answer: The Alberta Treasury Board and Finance has developed guidelines for the acceptance of letters of credit (LCs). Under the guidelines, the Treasury Board highly recommends (but does not require) that the financial institution have a physical branch in Alberta. Under AER requirements, the bank issuing the LC must appear in schedule 1, 2, or 3 of the Bank Act of Canada. We will not accept LCs from credit unions in amounts greater than two million dollars.

LCs that do not conform to these requirements will not be accepted.