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“We’re working on and putting the final touches on a whole suite of policies,” Savage said, adding that changes are necessary because using an LMR to gauge a company’s ability to remediate its oil and gas infrastructure, “hasn’t been working.”

“For the liability management issue, we’re looking at decades where no government has been willing to move on this file,” she said.

Taken on its own, the LMR is not a good indicator of a company’s financial health, said AER spokesperson Shawn Roth in an email.

“For this reason, we are no longer posting the LMR reports for individual licensees,” he said, adding the AER is working with the Alberta government “on a more holistic assessment of a company’s ability to address its end-of-life obligations.”

In emails to industry seen by the Financial Post, the AER has been openly critical of the LMR system.

“Changes are coming to (the AER’s directives on clean up obligations), but in the meantime the AER will not perpetuate the false sense of security offered by this flawed system,” reads an email from an AER licensee management, closure and liability manager to an external source.

Photo by Darren Makowichuk/Postmedia

The regulator had previously touted its LMR system, and a similar scheme called the licensee liability rating (LLR), as best-in-class methods to measure an oil company’s ability to pay for environmental remediation in the oilfield.