The AER has released a draft update to Directive 011: Estimated Liability, and it changes how Alberta’s closure liability is valued.
This is the output of a multi-year AER initiative, started in 2024, to modernize the liability values used across the province. The draft moves from flat per-well reclamation costs to itemized, region-specific estimates covering Phase 1 and Phase 2 ESAs, remediation and reclamation. It also adds new valuations for pipelines, shallow-gas SWBs and MWBs.
What stands out at first read:
- Per-well reclamation in the draft’s base table runs about $17K to $194K by region and well age, against $16.5K to $42K under today’s flat rates.
- Pre-1996 produced wells see the largest changes, roughly +90% to +360% depending on region.
- Confirmed Phase 2 findings raise the remediation and Phase 2 line items further, with step-ups of up to roughly 14x.
- Pipelines move to a length-based formula (fixed plus $/m), with discontinued lines valued at 86% of the base.
- Facility reclamation is now set by region.
What this means
For many operators, these changes will show up as new costs when liability is evaluated. In practice, much of the increase brings regulatory values closer to what closure actually costs to carry out. The draft narrows the gap between the AER’s liability estimates and the true cost of closure, which is something our team sees on projects every day.
The AER will be accepting comments from October 29, 2026 to January 29, 2027. This is an opportunity to understand how the draft applies to your own portfolio and to share feedback with the AER.
What’s next:
- Over the coming weeks, 360 EEC will publish summaries of the changes.
- We plan to host an industry night before the comment period closes. Details to follow.
Resources:
- Read the AER Bulletin 2026-44 here Bulletin 2026-44 | Alberta Energy Regulator
- View the proposed changes to Directive 11 here Directive 011: Liability Estimates
- Attend one of the AER’s November information sessions here: Upcoming Information Sessions on Proposed Revisions to Directive 011: Estimated Liability | AER
For more on the impacts, or details on the industry night, contact Director of ARO, Graeme Hawkins.
