News Release 2013-03-12


News Release 2013-03-12

News Release 2013-03-12 (NR2013-04)

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ERCB updates LLR program to protect Albertans from abandonment and reclamation costs

For immediate release

Calgary, Alberta (Mar 12, 2013)… The Energy Resources Conservation Board (ERCB) has updated its Licensee Liability Rating (LLR) program to ensure abandonment and reclamation of oil and gas facilities are covered by industry.
The ERCB requires oil and gas operators to post financial security deposits to cover the abandonment and reclamation costs of upstream oil and gas wells, facilities, and pipelines in the event a licensee becomes defunct. Following an extensive review, the ERCB determined that liability costs must be increased to minimize financial risk to the Orphan Well Association and to protect Albertans from the costs to abandon and reclaim upstream oil and gas facilities from defunct licensees.

Effective May 1, 2013, the ERCB will require 248 licensees to post financial security of $297 million over a three year period. Licensees may pursue options to lower the amount of financial security, including transferring licenses, returning suspended wells to production, or abandoning suspended wells.

The ERCB’s Licence Liability Program compares a licensee’s assets with its liabilities; and requires companies to pay a security if liabilities exceed assets. If a company fails to pay the required security, the ERCB may take enforcement measures, which include ordering a facility’s suspension and abandonment.

The ERCB is Alberta’s primary energy regulator. For almost 75 years we have been committed to our mission: to ensure that the discovery, development, and delivery of Alberta’s energy resources occur in a fair and responsible manner that takes into account public safety, environmental protection, and resource conservation.


The ERCB is requiring oil and gas operators to increase their financial security deposits to offset the costs of abandonment and reclamation if a company becomes defunct. The changes, effective in May 2013 will require 248 licensees to post a total of $297 million in securities over a three year period.

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For more information, please contact:

Darin Barter, ERCB Communications
Phone: 403-681-0946
Media line: 1-855-474-6356