In accordance with Part 11 of the Oil and Gas Conservation Act, the Alberta Energy Regulator (AER) is prescribing an oil and gas orphan fund levy in the amount of $135 million.
This regulation, which was updated on March 26, 2024, establishes licencing and production standards for oil and gas extraction to encourage the efficient development and conservation of Alberta’s oil and gas resources. This regulation enacts rules governing well licencing and abandonment, drilling spacing units, blocks, projects, and holdings, and other oil and gas production operations. It also establishes administrative standards for recording, collecting, and reporting oil and gas well data.
The Government of Alberta has approved this levy to fund the Orphan Well Association’s (OWA’s) operating budget for fiscal year 2024/25. The AER will allocate the orphan fund levy among licensees and approval holders included within the Licensee Liability Rating (LLR) and Oilfield Waste Liability (OWL) programs based on the April 2024 liability management rating assessment.
The calculation for the levy is outlined in Part 16.5 of the Oil and Gas Conservation Rules. A licensee or approval holder may review its deemed liabilities in the LLR and OWL programs at any time through the Digital Data Submission (DDS) system on the AER website at www.aer.ca. The numbers reported in the OneStop Liability Assessment report were not used to calculate the levy.
Orphan fund levy invoices will be emailed by April 10, 2024. It is the licensee’s or approval holder’s responsibility to ensure that the invoice is directed to the appropriate person. If the licensee or approval holder does not receive their orphan fund levy invoice on April 10, 2024, they must contact OrphanLevy@aer.ca to request a copy. All orphan fund levy invoices must be paid in full by the licensee or approval holder and received by the AER by May 10, 2024.
Further information on these programs is contained at Directive 006: Licensee Liability Rating (LLR) Program and Licence Transfer Process, Directive 011: Licensee Liability Rating (LLR) Program – Updated Industry Parameters and Liability Costs, and Directive 075: Oilfield Waste Liability (OWL) Program.
