Category: Oil & Gas Page 3 of 54

Regulatory Memo Commented On: Internal Alberta Energy Regulator Memorandum, Unintended Consequences of Ministerial Order 043/2023 in Insolvency April 11, 2024

PDF Version: The Problem with Industry Control of the OWA, and OWA Control of Oil and Gas Insolvency

The focus of this post is an internal memorandum written by the Alberta Energy Regulator (AER) Orphaning and Insolvency team: the AER Memorandum on Unintended Consequences of Ministerial Order 043/2023 in Insolvency (the Unintended Consequences Memo). We describe a regulatory problem with potentially serious consequences for municipalities and the public that has not been disclosed to the public by the AER. The Unintended Consequences Memo was obtained in records obtained by the Faculty’s Public Interest Law Clinic in its ongoing closure liabilities access-to-information project under the Freedom of Information and Protection of Privacy Act, RSA 2000, c F-25 (FOIP).

Waiting for a Credible Cost Estimate of Oil and Gas Closure Liabilities and the Problem with CARL

By Drew Yewchuk

On May 27, 2024

In Oil & Gas

Regulatory Bulletin Commented On: AER Bulletin 2024-11: Conditional Adjustment of Reclamation Liability (CARL) Program and New Edition of Directive 088 and Manual 023

PDF Version: Waiting for a Credible Cost Estimate of Oil and Gas Liabilities and the Problem with CARL

This post describes and assesses the Conditional Adjustment of Reclamation Liability (CARL) Program announced by the Alberta Energy Regulator (AER) in April 2024 and discusses a central question about Alberta’s conventional oil and gas closure liabilities: the absence of a credible official cost estimate. “Conventional oil and gas” in this context means wells, pipelines, and facilities, but excludes Large Facilities and oilsands mines, which have separate regulatory systems.

Alphabow’s Regulatory Appeal: The AER Hearing Panel Misunderstood Their Job

By Drew Yewchuk

On March 11, 2024

In Administrative Law, Appellate Practice, Energy, Oil & Gas

By: Drew Yewchuk

Decision Commented on: Alphabow Energy Ltd: Regulatory Appeals of AER Orders (Regulatory Appeals 1943516 and 1943521), 2024 ABAER 001 (Alphabow)

PDF Version: Alphabow’s Regulatory Appeal: The AER Hearing Panel Misunderstood Their Job

This is a comment on an Alberta Energy Regulator (AER) hearing panel decision following a regulatory appeal of enforcement action against a company that was failing to meet the AER’s expectations for regulatory compliance.

Because of an administrative law mistake by the AER hearing panel, the decision is not what it should be. The AER’s handling of financially troubled corporations with large closure liabilities, significant unpaid debts, compliance troubles, and financial problems is a multi-billion dollar policy problem for Alberta. The decision should have assessed the AER’s policy approach to one of these companies, but the hearing panel misunderstood their role and assessed only procedural fairness and ‘reasonableness’ in the restricted sense that word applies on judicial review. As a result, the decision is less interesting than it should be, since it only finds that what the AER did was legal and says nothing about whether it was good policy or in the public interest.

Inextricably Linked: Climate Policy and the Oil and Gas Sector’s Closure Liabilities

By Martin Olszynski

On February 21, 2024

In Energy, Environmental, Oil & Gas

By: Martin Olszynski

Matter Commented On: Study on Emerging Issues Related to the Senate Standing Committee on Energy, Environment and Natural Resources’ Mandate: Climate Change – Canadian Oil & Gas Industry

PDF Version: Inextricably Linked: Climate Policy and the Oil and Gas Sector’s Closure Liabilities

On February 15, 2024, I appeared before the Senate Standing Committee on Energy, Environment and Natural Resources’ (ENEV) in the context of its study into emerging issues related to its mandate. As has been my practice in the past (see here and here), what follows are my prepared remarks, modified only for formatting purposes and to include hyperlinks to supporting resources where relevant. A recording of the hearing is available here; a hearing transcript should also be available upon translation.

Grading the AER Liability Management Performance Report

By Shaun Fluker

On February 8, 2024

In Energy, Oil & Gas

By: Shaun Fluker, Drew Yewchuk, and Martin Olszynski

Report Commented On: Liability Management Performance Report

PDF Version: Grading the AER Liability Management Performance Report

On January 17, 2024 the Alberta Energy Regulator (AER) published a Liability Management Performance Report. This is the first published AER report to the public on progress being made by industry under the Liability Management Framework to reduce Alberta’s massive unfunded closure liability in the conventional (non-oil sands) oil and gas sector. The last comparable report from the AER on liability management was from September 2005. Somewhat predictably, in its news release, the AER reflected positively on industry’s performance and indicated that this will be an annual report with the objective of “. . . improving transparency of industry’s management of conventional oil and gas liabilities as well as to develop performance measure baselines and ongoing assessments of the industry as a whole and licensees specifically.” The response elsewhere was less enthusiastic. Some, like the Rural Municipalities of Alberta, reserved judgment pending further analysis; while others more critically noted that the Report curiously understates the overall liability amount, using a liability calculation method from 2015 that subsequent analysis by the AER revealed to be a vast under-estimation. The Report provides some aggregated data and licensee-specific information and accordingly gets partial marks for some transparency, but it absolutely fails to give the public adequate context to fully understand whether this should be read as good or poor performance by industry and says almost nothing at all about the AER’s performance. Secrecy and capture continue to govern liability management in Alberta.