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AER Issues Corporate Abandonment Order to Tallahassee Exploration Inc.

In a decisive move, the Alberta Energy Regulator (AER) has issued a corporate abandonment order to Tallahassee Exploration Inc. due to repeated non-compliance. This order mandates Tallahassee to decommission its sites and implement a comprehensive reclamation plan.

 

This development raises a crucial question: How could such a scenario have been prevented through better compliance practices?

 

We’ve compiled 11 Key Areas to address to avoid ending up in a similar situation.

 

1. Strengthen Governance and Internal Controls

Implement strong governance frameworks and internal controls to ensure all regulatory and operational processes are followed. This includes setting up compliance committees, regular internal audits, and stringent oversight mechanisms to identify and address potential issues early.

 

2. Conduct Regular Risk Assessments

Perform regular risk assessments to identify potential operational, financial, and regulatory risks. Develop and implement risk mitigation strategies to address identified risks. This proactive approach can help prevent issues from escalating.

 

3. Implement Comprehensive Care and Maintenance Plans

Develop and maintain comprehensive reasonable care and measure plans for all sites. These plans should outline preventive actions to avoid environmental damage, ensure public safety, and detail how to handle potential risks. Regularly update and review these plans to adapt to changing conditions and regulations.

 

4. Proactive Asset Management

Maintain accurate and up-to-date records of all assets, including wells and other infrastructure. Implement a robust system for tracking the status of wells, facilities and pipelines, ensuring timely abandonment and reclamation of mineral lease-expired wells. Regularly assess and document the condition of assets to plan for maintenance, abandonment, or reclamation activities proactively.

 

5. Ensure Compliance with Regulatory Orders

Consistently monitor and comply with all regulatory orders issued by authorities like the AER. This includes promptly addressing non-compliances, meeting deadlines, and adhering to all specified measures and requirements.

 

6. Collaboration and Communication with Regulatory Bodies

Maintain open and transparent communication with regulatory bodies like the AER. Engage with them proactively to understand regulatory expectations, seek guidance when needed, and provide regular updates on compliance status and plans. When expectations or commitments cannot be achieved be forth coming with information and provide explanations why agreed to timelines cannot be met. 

 

7. Implement a Digital Compliance Management System

Implement a digital compliance management system designed to track and monitor ongoing compliance with regulatory requirements. Such a system can automate the tracking of deadlines, document submissions, and ensure all regulatory requirements are met. This proactive approach helps to prevent oversight and ensures timely compliance with all regulations, reducing the risk of non-compliance issues.

 

8. Financial Planning for End-of-Life Obligations

Allocate sufficient financial resources to meet all end-of-life obligations, such as site decommissioning, abandonment, and reclamation. Establish a financial assurance mechanism or fund to cover the costs of these activities, ensuring that they can be carried out without delay due to financial constraints.

 

9. Strategic Divestiture and Regulatory License Transfers

Proactively manage your asset portfolio through strategic divestiture and regulatory license transfers. Regularly review and evaluate the performance and strategic value of all assets. Identify non-core, underperforming, or high-risk assets and prepare them for sale to entities capable of managing them effectively. Coordinate with regulatory bodies to ensure all necessary approvals and documentation for license transfers are obtained. This approach helps maintain operational focus, financial stability, regulatory compliance, and risk management.

 

10. Engage Third-Party Experts

When necessary, engage third-party experts and consultants to provide independent assessments, audits, and advice on compliance, risk management, and operational improvements. External expertise can provide valuable insights and help address complex challenges.

 

11. Focus on Long-Term Sustainability

Align business strategies with long-term sustainability goals, considering the potential impacts of climate change, regulatory changes, and market shifts. A focus on sustainability can help future-proof the business and ensure ongoing compliance and viability.

 

Compliance is all about preparedness, prevention, and doing the upfront work and provides the best defence if the AER decides to take action against your organization.

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