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 and reclamation of the site.
We are developing a broader security framework to replace security collection described in Directive 006. As the AER works to implement the new liability management framework in phases, the security collection framework will also be updated in phases. In this first phase, the improvements within Directive 088 to the security framework using the holistic licensee assessment will apply to the licensee management program, inventory reduction program, and transfer applications. In future phases, the broader security framework will replace the liability management rating security collection described in Directive 006. Further information on the border security framework will be released in 2022.
More detailed information on security deposits can be found in Manual 023: Licensee Life-Cycle Management and in Directive 068: ERCB 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.
Question: How long does it take to refund a security deposit?
Answer: Refund applications are subject to a mandatory 30-days Public Notice of Application period, during which time the AER cannot issue a decision. The AER endeavours to process refund applications within 45 business days.
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 403-297-8790. 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.