Skip to main content
Open this photo in gallery:

Syncrude oil sands extraction facility near Fort McMurray, Alta. on June 1, 2014. The AER pegs total liabilities for all oil and gas operations in the province at about $59-billion.JASON FRANSON/The Canadian Press

The Alberta Energy Regulator said on Friday president and chief executive officer Jim Ellis is stepping down early next year as the watchdog contends with growing concern over unfunded cleanup costs in the oil patch.

His sudden departure comes a day after the AER was forced to apologize after the release of records that showed it could cost nearly four times what the agency had publicly disclosed to fully clean up defunct oil and gas operations.

The AER pegs total liabilities for all oil and gas operations in the province at about $59-billion. However, documents released on Thursday show costs could be closer to $260-billion, a figure the regulator said represents a “worst-case scenario” of a complete and immediate industry shutdown. The records were initially obtained by online news site National Observer and later provided to The Globe.

In a statement on Friday, the regulator said Mr. Ellis’s departure, effective Jan. 31, 2019, has been planned for several months and that it would begin an immediate search for his replacement.

Mr. Ellis joined the AER in 2013 and was the first to lead the agency after its merger with the provincial ministry in charge of environment and sustainable resources development.

The agency has struggled to cope as costs for oil-patch cleanup mount after a string of corporate bankruptcies in the sector. It has also come under fire for approving sales of oil and gas assets with high liabilities to companies who lacked the financial wherewithal to pay for cleanup, according to its own measure of financial fitness.

Under Mr. Ellis, the regulator launched an appeal to the Supreme Court to stop companies from dumping their least profitable wells through bankruptcy proceedings. A decision in the case is expected before the end of the year.

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe