AER Bulletin 2014-15

AER Bulletin 2014-15: 2014 AER Administration Fees (Industry Levy)

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2014 AER Administration Fees (Industry Levy)

Apr 15, 2014

Energy Regulation Program

The Alberta Energy Regulator (AER) regulates energy resource development within Alberta and has a mandate to ensure the safe, efficient, orderly, and environmentally responsible development of hydrocarbon resources over the entire life cycle. This includes allocating and conserving water resources, managing public lands, and protecting the environment while providing economic benefits for all Albertans.

For 2014/15, the revenue required to support the AER’s operations, as approved by the Government of Alberta, is $207.3 million.

2014 Administration Fees (Industry Levy)
                        Allocation ($000)
Sector 2014 2013 & 2013B
Oil and gas 150 422 119 380
Oil sands  53 752 42 368
Coal     3 094     2 650
Total 207 268 164 398

The AER’s revenue requirement affects operator levy invoices. Other factors also contribute to the fee determination at an operator level, including an increase or decrease in wells or entities within the sector, ownership transfer and amalgamations, new entrants, and volume fluctuations. Invoices vary according to individual operations and are based on operating statistics for the 2013 calendar year. Invoices to operators detailing the fee calculations will be mailed on April 15, 2014, and payments are due by May 15, 2014.

TheResponsible Energy Development Act (REDA) authorizes the AER to make rules to levy an administration fee on the sectors that it regulates. REDA also authorizes the imposition of a late-payment penalty, which is set at 20 per cent on any portion of the fee that remains unpaid after the due date. The AER may also close producing facilities for failure to pay an invoice or late-payment penalty.

Oil and gas, oil sands, and coal-sector invoices for 2014 administration fees are sent to and are payable by the party that was the operator as at December 31, 2013.

For conventional wells and oil sands schemes, “operator” means the entity that files well production, injection, and/or disposal data with PETRINEX, Canada’s Petroleum Information Network (formerly the Petroleum Registry of Alberta). If the operator fails to pay the fee, the licensee is responsible for paying the invoiced amount plus any penalty.

Oil and Gas
Determination of Administration Fees

The administration fee in the conventional oil and gas sector is based on individual well production of oil/bitumen or gas and the number of production and service wells for the year ended December 31, 2013.

All operating wells are classified into one of eight base fee classes as set out in the Alberta Energy Regulator Administration Fees Rules (AER AFR) and illustrated in the table below. In addition, an adjustment factor is specified and applied to each base fee. This adjustment factor ensures that the total administration fee collected for the sector satisfies the revenue requirement for the AER.

Class Min. production Max. production Base fee
  (m3/yr)* (m3/yr)  
1 Service wells $100.00
2 0.01 300 $100.00
3 300.1 600 $125.00
4 600.1 1200 $312.00
5 1200.1 2000 $750.00
6 2000.1 4000 $1250.00
7 4000.1 6000 $1625.00
8 6000.1 $1875.00
* m3/yr: cubic metres per year.

The adjustment factor is set at 3.151048 of the base fee specified for wells in all classes in the AER AFR.

Alberta Upstream Petroleum Research Fund (AUPRF) previously known as Broad Industry Initiatives (BII)

The Canadian Association of Petroleum Producers (CAPP) and the Explorers and Producers Association of Canada (EPAC) have requested that the AER immediately discontinue the collection of voluntary BII funding. In previous years, the required BII funding amount was invoiced and collected at the same time as the administration fees. Although there are references to the BII program on the AER administrative fees levy invoice, this year you will not be invoiced for any BII amount.

Oil Sands

Fees are levied in five categories based on operating information for the calendar year 2013. An operator may have activities in more than one category. Each category is subject to an adjustment factor as identified below.

Category Allocation ($000) Adjustment factor
Primary ongoing 6 374 2.981075
Thermal ongoing 20 821 4.908045
Thermal growth 12 747 3.510598
Mining ongoing 7 861 1.849809
Mining growth  5 949 6.361472
Total 53 752  


The administration fee for coal is based on each mine’s share of total production volumes for the year ended December 31, 2013. It is set at $0.103932 per tonne of coal as specified in the AER AFR.

If you have questions about the 2014 administration fees, please contact
Anila Kaceli
Team Lead, Revenue & Cash Management
Alberta Energy Regulator
Finance Branch
Suite 1000, 250 – 5 Street SW
Calgary AB T2P 0R4
Telephone: 403-297-6985
Fax: 403-297-3195

Any appeal must be made in writing (faxes are not acceptable) to
Tom Heywood, CA
Vice President of Finance & Chief Financial Officer
Alberta Energy Regulator
Finance Branch
Suite 1000, 250 – 5 Street SW
Calgary AB T2P 0R4
Telephone: 403-297-2133

Payment of all invoices is required by May 15, 2014, regardless of whether an appeal has been filed. Subsequent adjustments may be applied, if needed, following decision of the appeal. 

<original signed by>

Tom Heywood, CA
Vice President, Finance & Chief Financial Officer

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