More questions regarding the Liability Management program and processes will be added as they become available. There are Q and A's for the following areas:

General

Digital Data Submission (DDS)

Licence Transfer

Security Deposits

Orphan Levy

LLR / LMR Assessments

Site-Specific Liability Assessments

Non-producer Licensee Netback

Oilfield Waste Liability  

General

Question: What is the purpose of the Licensee Liability Rating (LLR) Program?

The purpose of the LLR Program is to minimize the risk to the Orphan Fund posed by unfunded well, facility, and pipeline abandonment and reclamation liability. The Orphan Fund pays for the abandonment and reclamation of wells, facilities, and pipelines included within the LLR Program if a licensee or working interest participant defaults on its obligations to abandon and reclaim or to pay the costs associated with those activities. The Orphan Fund is fully funded by the oil and gas industry through a levy administered by the ERCB.

Question: Where can I update well name changes?

The ERCB does not use well names and encourages licensees not to submit well name change notifications. A licensee is, however, able to submit well name change notifications to the ERCB through DDS. Select the subsystem ERCB / Notifications / Licence / Submit Well Name Change Notification. Well names can also be changed during well licence transfers. Proposed well name changes must be consistent with the Oil and Gas Conservation Regulations . The ERCB does not accept notification of facility name or facility name changes.

Question: What are the conditions and benefits of filing a multiwell pad notification?

A licensee may establish a multiwell pad for those sites on which it has more than one well on a single surface lease. Both the well licences and the surface lease must be held by the same licensee. The establishment of a multiwell pad provides for a reduction in the reclamation liability of the wells located on the pad.

Question: When do I notify the ERCB of my facility abandonment?

A licensee must notify the ERCB within 30 days of the completion of the abandonment of a licensed facility.

Question: I am the licensee of a well and there has been a change to one of the working interest participants (WIP). Can I update this information?

Yes, WIP information is only required by the ERCB during four stages in the life of a well (when licensed, transferred, suspended, and abandoned). .

Question: Is there a help line number that I can access that can provide assistance when needed?

Yes. The help line number is (403) 297-3113; if calling long distance, contact the RITE operator (310-0000) for toll free access. You can also e-mail the Liability Management section at LiabilityManagement@ercb.ca

Top

DDS

Question: What is the Digital Data Submission (DDS) system?

This system supports the transmission of digital data from authorized ERCB customers to the ERCB via an Internet connection.

Question: Where do I find the DDS system on the ERCB Web site?

From the ERCB home page, follow the path: ERCB Home : Industry Zone : Data Submission and Reporting OR you can find it in the drop-down menu under Quick Links on the ERCB home page.

Question: How do I logon to the DDS system if I don not know our logon identification code and password?

It is recommended that you contact your system administrator. If your system administrator is unavailable, go to the DDS help screen and request a new username and password (subject to meeting DDS set-up requirements) from the ERCB's DDS administrator.

Question: Why am I not allowed access to certain DDS screens even though I have a valid login identification code and password?

The system administrator in your company assigns the access privileges for each individual or account.

Top

Licence Transfer

Question: Do licence transfer applications have to be submitted via DDS?

Yes, licence transfer applications can only be filed electronically via DDS.

Question: How do I create a licence transfer application?

Access the ERCB's DDS system and select subsystem Applications / Licence Transfer / Submit Licence Transfer Application. Enter all required information and when completed, click the 'Submit' button. The applicant is responsible for contacting the other party to notify that the application has been submitted, as the application requires second party acceptance before it is electronically submitted to the ERCB. Before a licence transfer application will be accepted by the Licence Transfer subsystem, both parties must confirm that the information contained within the application is correct and accept a declaration stating they have complied with a list of specified ERCB requirements.

An online demonstration is available. Select either link: [Small-size] [Full-size]

Question: How do I accept a licence transfer application as the second party?

Access the ERCB's DDS system and select subsystem Applications / Licence Transfer / Submit Licence Transfer Application. Retrieve the existing application from the drop-down menu and review the application information. If the application is acceptable, click the 'Approve' button for the application to be submitted to the ERCB.

An online demonstration is available. Select either link: [Small-size] [Full-size]

Question: If I have a number of licences to transfer from the same transferor or transferee, do I have to enter each licence into separate licence transfer applications or can I enter them all into one single transfer application?

It is recommended that all licences be entered into a single application.

Question: Is there another method of submitting an application with numerous licences other than through the ERCB's standard licence transfer system?

Yes, an alternative for submitting licence transfers is the file upload process. Access DDS and select subsystems Applications / Licence Transfer / Submit Licence Transfer Application . From this screen, identify if your company is the transferor or transferee and then select ‘Upload File.' This will direct you to the requirements for the Upload File process. Files that are to be uploaded MUST be in XML format. Samples of the required format are shown on this screen. Once you have the file prepared, select browse to retrieve the file and then select upload. Once the file has been uploaded, you will get a submission acknowledgement screen. Print this for your records. Go back into subsystems Applications / Licence Transfer / Submit Licence Transfer Application and select the existing submission. Review to ensure that all information within the application is correct and then 'Submit' the transfer.

Question: I am trying to transfer a licence, but it isn't showing up in DDS. Why is that?

The licence number may be incorrect; the transferor may not be the licensee of record for that licence; or the status of the licence is either reclamation exempt or reclamation certified.

Question: Can a well or facility with a reclamation certificate be transferred?

No, a well or facility with a reclamation certificate cannot be transferred.

Question: Can a well or facility that is abandoned and reclamation exempt be transferred?

No, a well or facility that is reclamation exempt cannot be transferred.

Question: How long does a licence transfer application take to process?

A licence transfer application with no deficiencies will be approved in 2 business days. An application that is deficient will be approved within 2 days of deficiency resolution.

Question: Will I receive a notice of approval when my licence transfer application is approved?

Yes, a copy of the approval notification letter will be mailed to both the transferor and transferee .

Question: I submitted the wrong licence number to be transferred. How can I fix this?

Contact the other party and ask them to 'Reject' the application via the DDS system. Once the submission is rejected, it will be sent back to the applicant. The applicant can then log into DDS to retrieve the submission and make any revisions to it .

Question: How do I obtain copies of ERCB approved licence transfer applications?

Copies of approved licence transfer applications can be ordered and purchased from the ERCB Information Services at (403) 297-8190.

Question: How do I acquire a list of all our licences?

A licence list can be ordered and purchased from ERCB Information Services at (403) 297-8190.

Top

Security Deposits

Question: Why are we required to establish a security deposit with the ERCB?

A licensee is required to establish a deposit when it is determined that its liabilities exceed its deemed assets. Deposits are equal to the difference between the licensee's deemed liabilities and its deemed assets (refer to Directive 006).

Question: What forms of security deposit does the ERCB accept?

The ERCB will accept only cash or letters of credit that meet the requirements of Directive 068: ERCB Security Deposits to satisfy security deposit requirements .

Question: How do I know if the ERCB has received my security deposit?

Once the ERCB receives the required deposit amount, the ERCB's Finance Branch will send a confirmation letter to the licensee.

Question: Can I establish a security deposit on behalf of another party?

The ERCB will only accept a security deposit from a licensee required to submit the security deposit or from a trustee, receiver, or receiver manager acting on behalf of that licensee. A security deposit submitted on behalf of a licensee by any other party will not be accepted.

Question: What conditions does our company need to meet in order to be eligible for the return of our security deposit?

Licensees that have an LMR value (deemed assets/deemed liabilities) above the threshold of 1.0 are eligible for a full refund of their security deposits. Incremental (partial) refunds are also available for cash security deposits when the difference between the deemed liabilities and deemed assets is less than the security deposit held in trust by the ERCB. No partial refund can be made for letter of credit security deposits unless a new letter of credit has been submitted for the reduced security deposit amount. In this instance, the letter of credit held for the larger amount, which would no longer be required, would be returned to the licensee.

Question: What is the method for requesting a refund of our security deposit?

A written refund request must be submitted on company letterhead and contain appropriate contact information. The request must be sent to the attention of the security deposit administrator of the ERCB's Liability Management Section.

Question: How long does it take to refund security deposit?

You should receive your security deposit refund from the ERCB Finance Branch within two to three weeks.

Question: How do I know the total amount of security that is held in our name?

Monthly account statements are sent by the Royal Bank to each licensee that has established a security deposit.

Question: We have not received an account statement for a number of months. Who should we notify to get this corrected, the bank or the ERCB?

Your company will need to call the ERCB Finance Branch at (403) 297-8790 to have the address corrected with the bank. Companies are not authorized to make changes directly with the bank.

Top

Orphan Levy

Question: How can I find out what wells and facilities were assessed in the levy?

Assessments can be viewed by accessing the DDS system and selecting subsystem Reports / Liability Rating / View Liability Rating. Go to the History tab and choose the February 02, 2008 monthly assessment. The Wells and Facilities tabs will provide the liability assessed for each licence for the 2008 Orphan Levy.

Question: Why are we assessed a levy when we transferred all our wells and facilities?

At the time the levy was assessed, the wells and facilities were still licensed to your company.

Question: Can a third party pay the levy invoice on behalf of the licensee?

Yes, third party payment will be accepted, but must be submitted with a copy of the invoice.

Top

LLR / LMR Assessments

Question: How can I view our monthly LLR / LMR assessment?

Assessments can be viewed by accessing the DDS system and selecting subsystem Reports / Liability Rating / View Liability Rating. These assessments can be downloaded.

Question: Why is the status indicator for my well showing active when my well has not produced in the last few months?

A well is considered active if it has reported an operation (production or injection) in the last 12 calendar months.

Question: What conditions do I need to meet in order to receive a 50 per cent reduction in the reclamation liability determined for my abandoned well or facility?

A licensee may request a 50 per cent reduction in the reclamation liability determined for an abandoned well or facility by the LLR formula if all of the work required to obtain a reclamation certificate from Alberta Environment or Alberta Sustainable Resource Development has been completed, and the delay in obtaining a reclamation certificate is solely related to the re-establishment of vegetative cover.

Question: What is the formula for calculating the LLR?

The LLR calculation is provided under Appendix 4 of Directive 006.

Question: Can I view the detailed monthly assessment of another company?

No, the monthly assessment is only accessible to the licensee.

Top

Site-Specific Liability Assessments

Question: What are the differences among Types A, B, C, and D suspension and abandonment costs?

Type A - Suspension and abandonment cost estimates fully meet Directive 001. These estimates must be based on the full current day estimate to suspend, abandon, remediate and reclaim based upon third-party unit costs, with no credit applied for salvage value. These estimates are based on sites-specific information including on-site inspections, as built construction diagrams, materials inventory, and intrusive environmental assessments of contaminant issues. These types of assessments may be based solely on phase I environmental site assessments only where a complete historical and current day assessments clearly indicates that assessment of contaminant and similar issues is not warranted.

Type B - An estimate based on partial site-specific construction or environmental data. May include assessment based on plot plans rather than as-built construction diagrams, or partially completed intrusive environmental assessments rather than full contaminant delineation and characterization. A contingency budget must be provided for the liability issues identified but not quantified as required.

Type C - An estimate based on preliminary site-specific construction or environmental information and supplemented as needed with information from other sources. Suspension and abandonment estimates are based on typical component costs for that that type of facility rather than a site-specific inventory and materials assessment. Environmental issues identified using a phase I site assessment but contaminant issues not characterized or delineated.

Type D - The best corporate cost estimate possible of outstanding suspend, abandon, remediate and reclaim obligations based on similar types of facilities. This estimate must be based on the undiscounted current day assessment of asset retirement obligations provided in financial reports.

Question: When is a liability assessment based on a phase I environmental site assessment acceptable (Type C liability estimate)?

When a complete phase I site assessment that thoroughly assesses both historical and current conditions of the site indicates that there are no contaminant concerns, physical disturbance, or reclamation issues warranting further assessment.

A completed phase I assessment must include the following:

a) Review of past records regarding operations, waste management, and environmental impacts of the facility or well from when the facility was first built to until it was decommissioned. This includes records, correspondence, notes, plot plans, and, where available, as-built construction diagrams. A complete record review must examine records as described above from both company and government sources and, to the extent available, third party sources to develop a detailed understanding of the past operations of the site and assessment of potential liability issues associated with that.

b) A review of time series air photographs from before facility construction to decommissioning with regular intervals (approximately 5 years) being assessed. Air photos must be of good quality and of sufficient resolution to allow identification of site features.

c) Interviews with staff familiar with operations from when the facility was first operated until it was decommissioned.

d) An on-site visual inspection to identify environmental issues warranting further assessment conducted prior to facility decommissioning, regrading, resurfacing, or other significant disturbance that would impair the visual assessment.

Contaminant issues warranting further assessment include, but are not limited to. releases of regulated substances such as vessel or pipe leaks or drips of liquid, soil staining or cumulative operational staining, damage or flaws of spill contaminant systems (e.g., cracks in floor sumps, hole in tank liner), documentation of past spills of regulated substances for which a remediation report with confirmatory sampling has not been prepared, documentation of operational practices likely to result in remaining environmental concerns (e.g., on-site disposal of gas plant filters, use of degreasers to clean floors, etc.).

Question: If a phase I site assessment finds evidence of contamination can we estimate liability based upon the phase I investigation?

No, the requirement in Directive 001 states "Contaminant and similar environmental issues warranting further assessment identified in the phase I report must be further evaluated....". This sentence makes it clear that by definition, contaminants warrant further assessment. It does leave open to professional judgement what are "similar environmental issues warranting further assessment "; however the requirement for further intrusive investigation of contamination is clear.

The evaluation of contaminant concerns based upon observation alone is not acceptable. Observation alone cannot be used to evaluate the significance of contaminant issues nor quantify the effects. Visual observation, smell, texture, etc. may indicate the minimum areas of concern. For example soil staining may show the top few centimeters of soil are affected (e.g., release of crude oil will stain soil). But these observations alone cannot be used to determine the extent of contamination that has leached from the original source and is not detectable to human observation (e.g., migration of BTEX constituents). It is the regulatory limits that determine the extent of liability issues and regulatory limits cannot be assessed by observation.

Question: When estimating volumes of affected soil, do we need to develop a "polygon diagram"?

Yes, you must develop a polygon diagram of affected spatial areas which illustrates the location of soil samples and the analytical results used to define plume dimensions. A polyhedron diagram must also be prepared to document the three dimensional nature of the plume when soil contamination at depth has been found.

Question: Do we need to provide a copy of the polygon diagram?

Yes, the polygon or polyhedron diagram is an integral part of the liability assessment and must be provided if the ERCB elects to audit the liability data provided and requests the complete liability assessment report.

Question: What is a 'plume irregularity factor" and why is it needed?

A "plume irregularity factor" is referred to in Appendix 2 of ERCB Directive 001 and is a multiplier to adjust preliminary soil volume estimates to account for the irregular and curvilinear nature of plume boundaries (plume fingers). The extrapolation techniques used to define the boundaries of the plume result in a polyhedron with smooth edges connecting the data points; however, contaminant plumes rarely, if ever, have straight edges as contaminants migrate irregularly and follow preferential flow pathways. The plume irregularity factor compensates for the underestimated plume volume resulting from using a straight edged figure.

Question: Why do we need to apply a plume irregularity factor when we already make generous estimates of affected soil volumes?

Considerable experience of both industry and government indicates that predictions of affected soil volumes made during remediation planning almost invariably underestimate the actual soil volume requiring treatment. Overestimates of affected soil volumes do occasionally occur but these are relatively rare and generally small. Underestimates of affected soil volumes are common. They can result in underestimates of costs that are orders of magnitude less then the original estimate made. The required inclusion of a plume irregularity factor that is transparent and easily verified is one means of improving the estimation of soil volumes.

Question: What do you mean by contaminant treatability study?

A treatability study is a series of laboratory tests used to assess the efficacy of a proposed remediation approach and to estimate the time required to meet remediation end points. These tests may evaluate biodegradation potential of hydrocarbons but can also be used to evaluate if chemical oxidation or physical stabilization will similarly meet desired remediation end points.

Question: Why is there no place to report salvage value on Form 001-A?

As ownership of equipment on a facility site can be held by a party other than the licensee, there is no provision for claiming its salvage value on Type A site-specific liability assessments.

However, a scrap metal value can be claimed, provided that is based on third-party quotes and reflects only its undiscounted, current value.

Question: How can I report the value of saleable sulphur?

For most sites, sulphur inventory is considered to be a liability as its value has been less than the costs associated with removing, loading, and transporting it. If there is currently value for part of the sulphur inventory, this should be reported as part of the facility-specific asset value and not as a discount to the liability value.

Question: Do leased buildings and equipment need to be included in abandonment cost estimates?

Yes, the costs for abandonment of leased buildings and equipment must be included in the liability estimate submitted for the purpose of the ERCB's Liability Management Programs. There is a legislative obligation to abandon all buildings, equipment, and appurtenances, etc. subject to an ERCB approval or license. That obligation makes no reference to ownership and the ERCB holds the licensee or approval holder and working interest participants fully responsible for the liabilities on sites approved by the ERCB. Leased buildings (including those which existed prior to the approval) or leased equipment that must be returned are governed by contractual arrangements between lessor and lessee and the ERCB is not privy to these contracts. Therefore, the abandonment cost estimate submitted to the ERCB must include all equipment or buildings associated with that facility licence.

Question: We recently submitted a site-specific liability assessment and are now modifying that facility. Do we need to “redo” the liability assessment?

A significant change to the facility, such as the addition of a new process unit or a new landfill cell, requires that the site-specific liability assessment be updated if those changes materially affect the associated liability. When the assessment report is very recent, a supplement to that report is sufficient rather than rewriting the whole report.

The liability assessments submitted for ERCB Liability Management Programs must include liability estimates for all phases of the final retirement of the facility: suspension, abandonment, decontamination, and reclamation. Modifying the facility typically would require a re-assessment of the suspension and abandonment liabilities or for landfills, the cell closure and long term monitoring costs. The need to re-assess the liability for decontamination and reclamation after facility modification depends on the effect of construction on the outstanding decontamination and reclamation obligations. If the construction does materially affect (approximately 10 per cent) the cost of the outstanding decontamination and reclamation obligation, then the liability attributed to those tasks does not need to be updated.

Question: Why does the ERCB require submission of decommissioning reports or environmental reports (e.g. soils and groundwater monitoring) in addition to the estimate of liability?

A detailed evaluation of the site is essential to ensure that all potential liability issues have been identified, verified and where needed, quantified. It has been the experience of the ERCB that identification and quantification of liability issues has as much effect on the accuracy of liability estimates as the actual method used to estimate the associated costs. In order to validate the liability estimates provided, the ERCB first reviews the most critical aspects of the assessment which includes historical file and air photo review, interviews, on site assessments, sampling program design (if needed), analytical treatment and interpretation of results. These details are provided in the environmental monitoring or abandonment planning reports which the ERCB requires be submitted with the liability assessment. Once we are satisfied the issues are reasonably quantified, then we examine how the associated costs to address them are estimated.

Question: Why not apply a net present value (NPV) to the deemed liability of new facilities?

The intent of applying a deemed liability value in the LLR/LMR is to 'crystallize' the existing liability at the time of transfer. For sites subject to site-specific liability assessments, the age and condition of the facility is inherently taken into consideration when evaluating site conditions. The deemed liability is an estimate of the current day costs to suspend, abandon, remediate, and reclaim whereas an NPV is applied in financial reporting to reflect the current value of a cost to be realized in the future.

Top

Non-producer Licensee Netback

Question: What documentation is required to support an Appendix 13 - Nonproducer Licensee Netback calculation form (Directive 006) and an Appendix 9 - Facility Netback calculation form (Directive 024)?

The supporting documentation is as follows:

• Annual report or audited financial statement or income tax return and unaudited year-end financial statements for the company's most recent year-end.
• The ERCB needs to be able to verify the information submitted on the netback calculation form to the financial information provided. Where this verification is not evident, in-house profit and loss statements are required to enable us to track back the figures provided on the netback calculation form to the financial statements.
• The financial information and the production volumes recorded on the netback form needs to correspond with the same accounting period used for the year-end financial statements provided. (i.e., If a licensee has a December year-end, the information presented on the netback form is for January - December of the same year.)
• Production volumes refer to the total received inlet volumes reported to the Petroleum Registry of Alberta against the reporting facility ID codes attached to your facility licences. You are to report only third-party volumes from which you generate revenue. Do not include volumes from your own production.
• Netback information submitted should be marked "confidential". The Appendix 13 submissions are protected by the Freedom of Information and Protection of Privacy Act. Appendix 9 submissions are protected under the Oil and Gas Conservation Regulations for 5 years absolutely and after the 5 years it is protected by the Freedom of Information and Protection of Privacy Act.
• Excluded revenues are to be recorded in the “other revenue / expense” column to reconcile totals to the financial information provided.
• Non-cash expenses such as depreciation and accretion do not need to be included in the expense category.
• If the licensee's net revenue is negative for all the types of operation that would be recorded on the Netback Calculation Form, no netback submission is required. An asset value will not be generated for a negative net revenue value.
• For additional specific information pertaining only to Appendix 9 (Directive 024) refer to the next questions below relating to licences in the Large Facility Liability Management Program (LFP).

Question: What do I record for the production volumes when we are not the 100% owner / operator of the facility?

Where this is the case, the licensee needs to provide the financial information for the third party volumes that they receive revenue from. They also need to indicate what percentage of the overall third party volumes this represents for the facility and whether this netback value would be representative of the netback for the facility as a whole.

Question: Straddle plants - The Netback for Straddle plants according to Directive 024 is to be based on the licensees most recent five fiscal years. How should this information be provided?

Please submit a 5 year average netback using Appendix 9 and mark the form as "5 year average - confidential". You do not need to supply supporting financial information or financial statements as backup for the 5 year average. This information is only required for the most recent year-end information. Please supply the 5 year average in the following format:

	2004	2005	2006	2007	2008	5 Year Average
(A) Revenue ($)
(B) Operating costs ($)
(C) Specific G&A costs ($)
(D) Net Revenue ($)
(E) Production volumes (10 3 m 3 )
(F) Netback (10 3 m 3 ) (F=D / E)

Question: Straddle plants – What if we have owned a Straddle plant for less than 5 years and therefore do not have a 5 year average netback?

If a licensee has owned a Straddle plant for less than five years, the ERCB will use the average for the number of years that you have owned the facility until such time as a five year average is available.

How are the deemed asset values associated with a netback application handled when those facilities are being transferred to another licensee?

Please refer to Appendix 2 ( Directive 024 ) under Deemed Asset on Transfer.

Oilfield Waste Liability (OWL) Program and Licence Transfer Process

Question: How is the Orphan Fund involved in the OWL Program?

Waste Management (WM) approval holders included within the OWL Program will pay into an Orphan Fund levy administered by the ERCB. A licensee is assessed based on its proportionate share of any Orphan Levy based on its deemed liability in the OWL and LLR Programs to the total deemed liability within the OWL and LLR Programs.

Should an OWL non producer licensee (NPL) become defunct within the first five years of the effective date of the OWL Program, the remaining OWL NPLs will be subject to a separate OWL NPL levy to address up to the first $2 million of any suspension, abandonment, decontamination and surface land reclamation costs. Any remaining costs over $2 million will be an expense of the Orphan Fund. These costs will be recovered in the same manner as any other Orphan Levy cost, which will be payable by licensees in both the LLR and OWL Programs.

Question: Are deemed assets calculated differently in the OWL Program than in the LLR Program?

Yes. A 0.5 multiplier is used in the facility deemed asset calculation to establish a minimum asset-to-liability ratio of 2.0. An oilfield waste management facility’s deemed assets is the sum of the previous 12 months of NPL volumes multiplied by the ERCB approved netback for these volumes, multiplied by 3 years, multiplied by 0.5.

Question: My Liability Management Rating (LMR) is greater than 1.0, but I am being asked to pay a security deposit on specific WM approval facility. Why?

NPLs in the OWL Program will have their LMR calculated monthly on both a corporate and a facility-specific basis. If the deemed liabilities exceed the deemed assets for a specific WM approval facility, a security deposit must be paid for the difference for that facility.

Question: I have an LMR greater than 1.0 and recently received approval for a new WM facility. Will I be required to pay a security deposit for this new facility?

If you are a NPL, you will need to pay a security deposit until such time as the new facilities has had a minimum of 12 months of volumetric throughput. The facility’s deemed asset value is based on the previous 12 months of NPL volumes. In the absence of 12 months of throughput, the asset value is zero. New facilities in the OWL Program will thus initially be required to pay a security deposit for the full amount of the deemed liability of the facility, based on a site-specific liability cost estimate. A licensee can request a netback and provide the required financial back-up for the ERCB to review once they have had a minimum of 12 months of NPL volumetric throughput.

Question: Why are licensees in the LLR and OWL Programs treated differently?

The differences are based on feedback from industry stakeholders and their level of risk tolerance. In transitioning from a full security Program to a risk based Program, it was decided that more stringent Program guidelines were to be implemented until the Program was proven effective in protecting the public of Alberta from bearing the costs should a licensee become defunct, and to minimize the risk to the Orphan Fund posed by the unfunded liability of facilities, wells, and pipelines included within the Program.

Question: How will my Waste Management (WM) approval number be represented in the OWL Program?

In the manual tracking sheet, WM approval numbers will be used.

Question: How will the Oilfield Waste Management Facility Full Security Program be amended into a risk based Program?

Part 16.6: Security of the Oil and Gas Conservation Regulations will be amended to be consistent with the requirements of the OWL Directive. Licensees who are eligible for a full or partial refund of their security deposit make a written request for a refund on company letterhead. Corporate eligibility criteria include the licensee having an LMR equal to or greater than 1.0, and compliance with ERCB security deposit requirements. Facility-specific eligibility criteria includes the licensee being compliant with ERCB security deposit requirements, a facility having reported 12 calendar months of throughput to the Petroleum Registry of Alberta (PRA), and the facility’s OWL ratio is equal to or greater than 1.0.

Landfills approved by the ERCB are excluded from the OWL Program and will remain subject to the full security requirements outlined in Part 16.6: Security of the Oil and Gas Conservation Regulations.

Question: How is the deemed liability for 1b disposal wells located on the same surface lease as a WM approval calculated?

The deemed liability for 1b disposal wells located on the same surface location as a WM approval is split between the LLR and OWL Programs. The abandonment liability is to be calculated and only reflected in the LLR Program. Decontamination and surface land reclamation liability is to be calculated and only reflected in the OWL Program. Licensees should notify the ERCB of any 1b disposal wells located on the same surface location as a WM approval to ensure the liability for these wells is captured properly.

Question: I have already provided a Type A Liability Assessment for my WM facilities as part of the Oilfield Waste Management Security Program. I am proposing to transfer this facility. Do I need to provide a new Liability Assessment?

If the assessment currently held on file by the ERCB is less than 5 years old, an update consisting of an assessment of any changes to site conditions, inflation, incidences, and any remediation or reclamation activities that have occurred since the assessment was prepared must be provided by the transferor. A cost estimate based on a new assessment meeting the requirements of Directive 001, would be required if the transferor is aware of a cumulative increase in estimated liability equal to or in excess of either $1 million or 10 per cent of the facility’s current liability, or if the assessment on file is approaching 30 days prior to the expiry of the five-year period approved for the cost estimate used for the licence transfer application.

Question: How do I submit an application to transfer a licence in the OWL Program?

WM Approval holders seeking to transfer a facility included in the OWL Program apply to the ERCB’s Waste and Storage Section. The transferor can submit a transfer application via the ERCB Digital Data Submission (DDS) System for any licenses associated with WM approvals. The approval of the transfer of these licenses will coincide with the transfer of the WM Approval.

Question: How do I report a Waste Management approval facility that is no longer operational and has been suspended, abandoned, closed, etc.?

Contact the ERCB’s Waste and Storage Section as they will need to amend the facility’s approval to reflect the current status.

Question: One of my Waste Management approvals is for a facility which does not have any reporting requirements to the PRA. How will assets for this approval be calculated?

The asset calculation for a licensee not required to report volumetric data to the PRA is the same as for a licensee reporting volumes to the PRA. The only difference is that the licensee reports the volumes directly to the ERCB rather than through the PRA. If you have any further questions, please contact Camille Sojer at (403) 297-4875

Question: What is the deadline to populate the manual OWL Program spreadsheet?

The deadline date is the date set by the PRA for Waste Management Reporting for a given month. Data or amendments submitted after this date will not be accepted until after the monthly LMR run.

Question: What happens if I fail to submit volumetric data by the deadline?

If no value is submitted for volumetric data, the volume will be entered in as zero for that month, which will lower the assets of the subject facility.

Question: What happens if I make a reporting error on the manual spreadsheet?

If a reporting error is made on the manual spreadsheet, the ERCB must be notified immediately via email to LiabilityManagement@ercb.ca . If notification is submitted prior to the PRA’s deadline for Waste Management Reporting of that month, the correction will be made before the monthly LMR run. Otherwise, the correction will be reflected in the data for the next deadline date for Waste Management Reporting to the PRA.

The ERCB will be checking the volumetric data reported against what is reported to the Petroleum Registry of Alberta. If a discrepancy is noted, the licensee will receive a letter advising of the discrepancy and has until the PRA’s deadline for Waste Management Reporting of that month to make the change. Failure to do so will result in escalating enforcement.

Question: If I meet the eligibility criteria and have submitted a written request for a refund of a security deposit on corporate letterhead, how long can I expect it to take for that request to be processed?

The ERCB will endeavor to refund security deposits within 30 days of receipt of a written request from an eligible licensee.

Question: How do I submit new liability costs for WM approvals?

Currently, the WM approval holder must conduct a site-specific liability cost estimate for the costs associated with suspension, abandonment, decontamination and surface land reclamation in accordance with Directive 001. The WM approval holder must then provide the ERCB with a completed Directive 075: Oilfield Waste Liability (OWL) Program Appendix 7 form.

Top