Effective May 1, 2013, the Alberta Energy Resource Conservation
Board (the ERCB) is implementing changes to the
Licensee Liability Rating Program (the LLR Program). These changes
will result in amendments to ERCB Directive 006:Licensee Liability
Rating(LLR) Program and
Licence Transfer and Directive 011:Licensee
Liability Rating(LLR) Program: Updated Industry Parameters
and Liability Costs (collectively, the LLR Program Changes).
One major effect of the LLR Program Changes is that it will require
248 licensees to post financial security of $297 million in
accordance with the LLR Program, up from the current 88 licences
that have posted deposits of approximately $13 million to date.
According to the ERCB, the changes were made to address concerns
raised by industry groups that the LLR program, which was last
updated in 2006, significantly underestimated abandonment and
The purpose of the LLR Program is to minimize the risk to the
Orphan Well Fund in Alberta posed by unfunded well, facility, and
pipeline abandonment and reclamation liability. The LLR program
compares a licensee’s assets with its liabilities, and
requires companies to post security if liabilities exceed the
licensee’s assets. The Orphan Well Fund pays for the
abandonment and reclamation of wells, facilities, and pipelines
included within the LLR program if a licensee or working interest
participant, who has not provided security in accordance with the
LLR program, defaults on its obligations to abandon and reclaim or
to pay the costs associated with those activities.
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guide to the subject matter. Specialist advice should be sought
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The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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