Liability Management Rating and Reporting

Liability Management Rating 

The liability management rating (LMR) and the associated programs will be replaced by the new liability management framework (LMF). The LMR is used to assess liability in three of our liability management programs:

• Licensee Liability Rating Program – described in Directive 006: Licensee Liability Rating (LLR) Program
• Large Facility Liability Management Program – described in Directive 024: Large Facility Liability Management Program
• Oilfield Waste Liability Program – described in Directive 075: Oilfield Waste Liability (OWL) Program

The LMR is integrated in several of our directives, as well as the Oil and Gas Conservation Rules, and cannot be easily or quickly removed without careful thought and consideration to impacts it could cause in other areas. The AER released Bulletin 2023-41 to outline some of the regulatory instruments likely to be affected with the replacement.  

The Liability Rating Report in the Digital Data Submission (DDS) system is no longer supported and will eventually be removed.  For now, the LMR summary reports are below: 

Disclaimer: As the AER transitions away from the LMR, this information is not being used and is no longer being updated by the AER. 

Liability Management Framework 

The holistic licensee assessment outlined in Directive 088: Licensee Life-Cycle Management will replace the use of the LMR over time. As our first step, the holistic assessment has replaced the use of the LMR for programs outlined in Directive 088.  

In 2022, with the shift to the new LMF, the AER began reviewing how estimated liability was calculated. In 2022, the AER included liability from sweet multiwell batteries that had not been included previously, resulting in a total estimated liability of approximately $33 billion.  

In addition, the AER has been transitioning and updating estimated liability as part of the LMF. With the release of updated Directive 011: Licensee Liability Rating (LLR) Program: Updated Industry Parameters and Liability Costs to contain values for both the deemed liability used for LMR and the estimated liability used for LMF.   

With the recent Directive 011 revisions which updated well abandonment costs, this resulted in the total estimated liability increasing to approximately $36 billion as of July 2024. Further information related to these changes can be found in this presentation on the Directive 011 well abandonment cost update. 

A company can view the full breakdown of their LMF estimated liability through the OneStop Liability Assessment Report. For oil and gas estimated liability trend, please refer to the Liability Management Performance Report.