The industry closure quota is set each year and proportionally distributed among licensees as licensee quotas to ensure that closure activity is prioritized. Closure quotas support a net decrease in the overall amount of inactive oil and gas operator liability in Alberta.
Licensees can complete closure work independently or collaboratively with other licensees to abandon (i.e., decommission), remediate, and reclaim sites. Licensees and oilfield service providers can use the mapping tool in OneStop to plan and coordinate work for added closure efficiency.
Industry Closure Quota
The industry closure quota is reviewed each year. Before setting the amount, we evaluate factors such as market conditions and the results of the previous year’s closure spend to ensure that licensees are meeting their spend quota and continuing to close oil and gas infrastructure.
The 2027 industry closure quota has been set at $750 million.
| Year | Industry Closure Quota |
|---|---|
| 2027 | $750 million |
| 2026 | $750 million |
| 2025 | $750 million |
| 2024 | $700 million |
| 2023 | $700 million |
| 2022 | $422 million |
Licensee Quota
A licensee’s quota is its proportional share of the industry closure quota. A licensee’s share is based on its total inactive liability, which is estimated using Directive 011 regional values or site-specific liability assessments when they are required for specific inactive sites.
In 2027, each licensee’s proportional share of inactive liability was calculated using the equation outlined in Manual 023: Licensee Life-Cycle Management.
Licensees can view their annual licensee quota in the licensee quota report. Their respective inactive liability estimates are in the liability assessment report. Both reports are available in OneStop.
Small Dry Gas Producers
Since 2024, certain micro and junior dry gas producers have been exempted from their licensee quota. The exemption will remain for 2027 for licensees that meet the 2027 exemption criteria. The total exempted licensee quota amounts for 2027 will be redistributed among the remaining licensees.
For information about eligibility for the 2027 exemption, see Bulletin 2026-33.
Banked Spend
Banked spend is being piloted for licensees from 2025 through 2027. Licensees that exceed their 2025, 2026, or 2027 licensee quota by at least 20% will have the excess eligible spend banked and applied to any 2026, 2027, or 2028 quota shortfall.
Banked spend does not apply to licensees that do not have an assigned licensee quota. This includes licensees that received an exemption as a micro or junior dry gas producer.
In early 2027, the banked spend approach will be evaluated to determine whether the Inventory Reduction Program objectives continue to be achieved. Following this evaluation, a decision will be made on whether to continue it beyond 2027.
Closure Summary Reporting
Closure activity reporting enables us to better understand the costs to complete each closure stage (abandonment, remediation, and reclamation) of an energy development site.
Licensees must provide detailed reporting for each infrastructure type (e.g., wells, facilities, or pipelines) across the various closure stages. This information improves our ability to estimate the amount of liability across the province for all types of infrastructure and closure activity, and track industry performance related to liability management.
Our annual Liability Management Performance Report is released in the fall and includes an analysis of data from the previous year. For more information on closure activity completed in 2024 and previous years, see the Liability Management Performance Report webpage.
