2020-02 - Alberta Energy Regulator Closure and Liability Management Systems for Alberta’s Upstream Oil and Gas Infrastructure (for Technical Expertise)

The auditor general is conducting a performance audit to assess if the Alberta Energy Regulator (AER), Department of Energy (DOE) and Alberta Environment and Parks (AEP) have adequate liability management systems to mitigate the risks associated with the clean-up of upstream oil and gas infrastructure, including orphan sites, in the province of Alberta. Alberta has modeled its systems around the “polluter pay principle”, which means that the industry operators regulated by the government bear responsibility for the environmental costs and clean up.

The Alberta Energy Regulator is the provincial regulator responsible for holding industry operators accountable for managing the liabilities associated with the lifecycle and end of life obligations that result from energy development activities in the province. The Departments of Energy and Environment and Parks are responsible for developing the related policies pronounced by the Government of Alberta. Given the prolonged economic downturn in the province, it is important the Government of Alberta has processes in place to mitigate the financial and environmental risks of closure cost liabilities associated with upstream oil and gas infrastructure.

The auditor general needs to contract an expert to assist the audit team in the audit examination and reporting phases of the audit. Specifically, the expert would be engaged in assisting on technical components of the audit. The audit team has prepared a comprehensive audit work plan and will direct the work of the expert.