The Inventory Reduction Program aims to increase the amount of closure work occurring in Alberta, reduce liability, and to increase the amount of land being returned to equivalent capabilities—or to a state similar to what it was in before development took place.
There are two components under the program—closure quotas (formerly called closure targets) and closure nomination.
Closure quotas specify the minimum amount of money that licensees are required to spend on oil and gas closure work each year and encourages oil and gas companies to collaborate to increase efficiency of projects and complete more closure work.
Licensee-specific quotas are based on an industry-wide closure spend requirement that the AER establishes by considering a variety of factors, such as a significant change in the amount of inactive oil and gas infrastructure, commodity pricing, amount of closure work completed in the previous year, or unforeseen exceptional circumstances.
Closure nomination is a process that provides an opportunity for eligible requesters to nominate a well or facility site for closure that has been inactive or abandoned for five or more years. Eligible requesters can nominate a site by submitting a closure nomination form. Nominations that have been accepted by the AER are posted on a closure nomination dashboard, which is updated regularly and includes information about the progress of closure activities.
