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November 30, 2020 November 30, 2020

Alberta Energy Regulator gives 2020 update

Posted on November 12, 2020 by Vauxhall Advance

By Cole Parkinson

Vauxhall Advance

As concerns continue to come forward around abandoned oil/gas wells across the province, Municipal District of Taber council was hoping to get some answers to their questions from the Alberta Energy Regulator.

A delegation from the AER — Susan MacDonald, Marcie Nieman and Russ Deacon — was digitally in council chambers during the M.D.’s regular meeting on Oct. 26 and gave an update on where they were late in 2020 and answered some questions posed by councillors.

AER regulates 433,000 kilometres of pipeline, over 146,000 operating natural gas/oil wells, over 230 primary/enhanced recovery projects, over 30,000 oil facilities, over 21,000 gas facilities, 16 experimental in situ projects, 72 thermal/enhanced in situ projects, eight operating oil sands mines, four active bitumen upgrades, three coal processing plants and eight producing coal mines.

Their presentation also explained that they don’t regulate electricity, the natural gas rate, gasoline, renewables and pipelines that cross borders.

AER implements and enforces government policy, oversees energy development and ensures the environment and public are protected.

As far as concerns being raised, the AER touched on the fact they realize patience is starting to wear thin with many municipalities.

“The province as a whole is in a frustrating position and we understand that the folks at the M.D. of Taber have concerns about license transfers, taxes, weeds and unpaid surface leases amongst others,” said MacDonald. “Alberta has a pretty complex regulatory environment and as a result, our work consists of many aspects like reviewing applications, inspections, working with stakeholders and also holding hearings.”

One of the biggest concerns brought forward to AER from landowners and municipalities comes from weed control and maintenance on sites with oil/gas wells.

The delegation explained to council what falls under their control and what doesn’t.

“What we hear from landowners and from yourselves, is issues around weeds. When it comes to this, AER doesn’t have the jurisdiction to enforce the Weed Control Act on private lands. We do have jurisdiction to enforce it on public lands when it comes to noxious and prohibitive noxious weeds. If a company is unresponsive to a notice from the M.D. or landowner requests, then the landowner or M.D. can contact the AER to ensure they have the correct contact information. If you initiate a complaint with us, we may inspect that site and take a look,” continued MacDonald.

They also went over the issues around surface leases.

“That is under the jurisdiction of the Surface Rights Board. Where we can help here though is sometimes it can become confusing as to who the responsible party is on the site. If a landowner calls and has questions about that, then we can take a look in our system and see who you should put in your Section 36 application to the Surface Rights Board,” added MacDonald.

In terms of licences and taxes, the AER also went over the fact they don’t have jurisdiction when it comes to licence transfers.

“This is a spot where we don’t have the jurisdiction to deny license transfers if a company is in tax arrears. We know that we need more tools here and we know that we need to make decisions on more than just the liability management rating, we know that’s not reliable. The LMR is based on only two parameters — deemed assets and deemed liability. We are looking at a more holistic way of determining company health so this is called a licensee capability assessment. This will take more things into account when assessing companies, things like financial, operational, closure and compliance performance as a company,” stated MacDonald.

A question from council came around AER’s responsibility for a well from abandonment until Orphan Wells takes over and who looks after weeds and maintenance at that point.

“There’s kind of a no man’s area there for lack of better words but who has to look after weeds and maintenance? We’ve got wells in my area that I know haven’t been looked at all summer because they are in the middle of a field and there are no tracks going out to the well. Sooner or later these wells are going to rot and start leaking,” inquired Coun. Brian Brewin.

“It will be situation dependent,” replied Deacon. “It will be wherever it sits and if the company is insolvent or they are just struggling, if their receiver has been appointed or if they have gone to OWA. A lot of these wells, when companies go insolvent, there are a lot of wells that go on the chopping block and the receiver has the ability to walk away from some of those wells as well.”

“If it’s within the Orphan Well Association, the responsibility lies with the OWA. If there is still a viable licensee, that responsibility should lie with them or any working Interest participants.”

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