Category: Energy Page 2 of 52

PDF Version: Grading the 2023 AER Liability Management Performance Report

On December 5, 2024 the Alberta Energy Regulator (AER) published the 2023 Liability Management Performance Report (2023 Report). This is the second AER Liability Management Performance Report to the public on progress to reduce Alberta’s massive unfunded closure liability in the conventional (non-oil sands) oil and gas sector. We gave the 2022 Liability Management Performance Report a failing grade here because it offered little in relation to understanding whether industry performance was adequate and almost nothing at all about the AER’s performance. We note with disappointment that the AER has apparently removed the 2022 Report from its website, since historical comparison is also a method of measuring performance. The 2023 Report receives a slight improvement to a D grade because of enhanced data transparency, but the AER continues to offer little in terms of measuring effectiveness and performance in the administration of liability management.

The Modernization of the Columbia River Treaty: Interim Arrangements to Implement the Agreement-in-Principle

By Nigel Bankes

On February 6, 2025

In Energy, Water Law

By: Nigel Bankes

Matters Commented On: (1) Canada/US Exchange of Notes re Columbia River Treaty Assured Operating Plan for 2024-25, (September 18 and 20, 2024) and re Entity Agreement on the Interim Period Determination of Downstream Power Benefits (September 13, 16 and 17 September, 2024), (2) Canada/US Exchange of Notes Regarding Interim Pre-Planned Flood Risk Management Arrangements (November 18 and 22, 2024), and (3) Entity Agreement regarding Pre-Planned Flood Risk Management Arrangements (November 14 & 15, 2024).

PDF Version: The Modernization of the Columbia River Treaty: Interim Arrangements to Implement the Agreement-in-Principle

This post deals with the interim measures that the United States and Canada (the Parties) have adopted to address the temporal gap (the “Interim Period” between the Agreement-in-Principle (AiP) on a “modernized” Columbia River Treaty (CRT or Treaty) (1961)) adopted in mid-2024 and the conclusion and ratification of final modernized treaty text at some future time. In practice, the Parties and their operating Entities (see discussion of the term “Entities” below) are using the operational capability offered by the Treaty (and especially Article XIV(4)) to selectively implement some of the terms of the non-binding AiP. The Parties and their Entities have chosen to prioritize the early implementation of the changed flood control and power provisions of the AiP but have not extended that same priority to other elements of the AiP, including ecosystem considerations, and the creation of the Joint Ecosystem and Indigenous and Tribal Cultural Values Body (JEB). Neither do the interim arrangements address two groups of provisions in the AiP that were clearly intended to confer an advantage on Canada; first an additional annual compensation payment to Canada for “additional benefits” brought about by coordinated operations, and second, certain flexibility rules designed to allow Canada (British Columbia) to “undertake Treaty operations for domestic priorities, such as environmental, Indigenous cultural values and socioeconomic purposes.”

Going Through the Motions to Trigger the Sovereignty Act: Another Paper Tiger?

By Nigel Bankes

On December 16, 2024

In Energy, Oil & Gas

By: Nigel Bankes and Martin Olszynski

Matters Commented On: (1) Motion re the draft federal Clean Electricity Regulation, oral notice given, November 27, 2023, adopted by recorded vote on February 28, 2024, (2) Motion re proposed federal Oil and Gas Sector Greenhouse Gas Emissions Cap Regulations, debated and adopted December 2, 2024 and (3) Proposed Oil and Gas Sector Greenhouse Gas Emissions Cap Regulations, 158 (45) Canada Gazette, Part 1, November 9, 2024 and accompanying regulatory impact analysis statement.

PDF Version: Going Through the Motions to Trigger the Sovereignty Act: Another Paper Tiger?

This post assesses the second motion tabled pursuant to the Alberta Sovereignty Within a United Canada Act SA 2022, c A 33.8 (Sovereignty Act or the Act). The first motion was with respect to the draft federal Clean Electricity Regulation (the CER Motion), adopted on February 28, 2024. The second motion relates to the proposed federal Oil and Gas Sector Greenhouse Gas Emissions Cap Regulations (the Emissions Cap Motion), debated and adopted December 2, 2024. Our focus is on the Emissions Cap Motion simply because it is the most current (but we also note that, ten months later, there do not appear to be any relevant developments in relation to the CER Motion – at least none that are publicly available and certainly none that take the form of implementing regulations under the Sovereignty Act).

The Draft Alberta Quantification Protocol for CO2 Capture and Permanent Geologic Sequestration, Version 2

By Nigel Bankes

On November 18, 2024

In Energy, Oil & Gas

By: Nigel Bankes

Document Commented On: Draft Quantification Protocol for CO₂ Capture and Permanent Geologic Sequestration v2.0, November 1, 2024

PDF Version: The Draft Alberta Quantification Protocol for CO₂ Capture and Permanent Geologic Sequestration, Version 2

Nearly ten years ago I posted an ABlawg comment on a draft of the first version of this Offset Quantification Protocol. The Quantification Protocol (QP) was developed at that time so as to be ready for when Shell’s Quest Project came on stream. A QP is designed to establish the circumstances under which a project, in this case a carbon capture and storage (CCS) project, might generate offset credits under Alberta’s CO₂emissions legislation and regulations, which could then be used to meet the compliance obligations of a regulated emitter. At that time, the relevant regulation was the Specified Gas Emitter Regulation, Alta Reg 139/2007 (SGER); the current regulation is the Technology Innovation and Emissions Reduction Regulation, Alta Reg 133/2019 (TIER Regulation). My earlier post identified a number of issues that remain pertinent today, including the transparency of the process, issues of liability in the event of a reversal, and a question as to the apportionment of regulatory responsibilities between the mechanisms of the QP and the responsibility of the energy regulator (then the Energy Resources Conservation Board, now the Alberta Energy Regulator (AER)) for scheme approvals for injection activities. This latter point continues to present some difficulties in the current draft of Version 2.0, particularly with respect to monitoring for containment assurance, which is explicitly dealt with in s 5.1.6 and Appendix C of the Draft QP (but also relevant to the sections of the QP dealing with reversals). I explore these issues in more detail below.

The AER’s Proposed Amendments to Closure Liability Management Directives: Much Ado about Not Much

By Drew Yewchuk

On November 4, 2024

In Administrative Law, Energy, Oil & Gas

By: Drew Yewchuk and Shaun Fluker

Matter Commented On: Bulletin 2024-25, Invitation for Feedback on Revised Liability Directives

PDF Version: The AER’s Proposed Amendments to Closure Liability Management Directives: Much Ado about Not Much

On 8 October 2024, the AER issued Bulletin 2024-25, Invitation for Feedback on Revised Liability Directives, announcing the AER is taking public comments on a proposal to restructure AER directives relating to the closure liability management framework. The AER’s description of the changes, and a video presentation describing the changes, are here. At a high level:

Four directives are being amended: Directive 001: Requirements for Site-Specific Liability Assessments; Directive 011: Estimated Liability (previously Licensee Liability Rating (LLR) Program: Updated Industry Parameters and Liability Costs); Directive 068: Security Deposits; Directive 088: Licensee Life-Cycle Management.
Three directives are being rescinded as their contents are either being reorganized into the four amended directives or are no longer necessary: Directive 006: Licensee Liability Rating (LLR) Program; Directive 024: Large Facility Liability Management Program; Directive 075: Oilfield Waste Liability (OWL) Program.