Alberta Regulation 12/2025 introduces amendments to the Oil and Gas Conservation Rules, updating security deposit requirements and modifying regulatory definitions and procedures. The regulation replaces and revises several sections of the existing framework to improve financial accountability and ensure environmental protection.

The amendments include changes to Section 1.020(2), which eliminates outdated definitions and updates terminology, particularly references to Directive 011 and the renaming of government departments. These changes align regulations with current administrative structures and improve clarity. Furthermore, Part 1.1, which governs security deposits for wells and facilities, has been completely repealed and replaced with new provisions emphasizing financial security for licensees and approval holders.

Under the new Part 1.1, security deposits are now mandatory for applicants seeking a license or approval, including those applying for amendments or transfers. The regulation also requires licensees and approval holders to provide security deposits in cases where wells or facilities are inactive or abandoned, when a site-specific liability assessment is required, or when financial distress indicators are high. Additionally, the AER retains the authority to demand security deposits at any time if it deems them necessary for suspension, abandonment, remediation, or reclamation of oil and gas sites. This provision ensures that operators maintain financial responsibility for environmental liabilities.

The regulation specifies that security deposits can be in the form of cash, irrevocable letters of credit, or other forms deemed acceptable by the AER. Moreover, the AER has the discretion to require full or partial deposits at specified times and to adjust the required amounts if existing deposits are deemed insufficient. If an operator fails to meet its obligations, the AER has the authority to utilize these deposits to cover costs associated with site remediation and environmental protection. In cases where third parties undertake the required activities, the AER may allocate security funds to them accordingly.

Refund procedures for security deposits have also been clarified. A full refund is granted when all obligations have been met, while partial refunds may be issued for partial compliance. If a licensee or approval holder fails to provide the required security deposit, the AER may suspend operations until compliance is achieved. Additionally, any security deposits provided under the previous regulations remain applicable and will be retained to offset new requirements.

Overall, Alberta Regulation 12/2025 aims to strengthen the financial security requirements for oil and gas operators, improve regulatory transparency, and reinforce environmental protection measures. By implementing stricter security deposit mandates and broadening the AER’s enforcement powers, the amendments aim to ensure that industry participants remain accountable for their liabilities while safeguarding public and environmental interests.

Alberta (12/2025) February 15, 2025