Petroleum Marketing Regulation

(Consolidated up to 136/2026) ALBERTA REGULATION 174/2006 Petroleum Marketing Act Mines and Minerals Act PETROLEUM MARKETING REGULATION Table of Contents 1 Definitions 2 Miscellaneous interpretive rules 3 Petrinex Part 1 Royalty Reporting 4 Monthly royalty reports 5 Reporting deadlines 6 Automatic penalties related to royalty reports 7 Penalties related to inaccurate reporting 8 Penalties for underdeliveries and overdeliveries 9 Invoicing for penalties 10 Appeals respecting penalties Part 2 Underdelivery and Overdelivery of Oil 11 Field delivery point for royalty oil 12 Direction to deliver royalty deficiency 13 Money in lieu of royalty deficiency 14 Money amounts owing under section 12 or 13 15 Overdelivery of crude oil Part 3 Penalties Related To Inaccurate Forecasting 16 Interpretation 17 Notice to furnish information 18 Flow‑through penalties 19 Waiver of penalty 20 Invoicing for penalties 21 Appeals respecting penalties Part 4 General 22 Truck transportation allowances 23 Commission ’ s right of set‑off 24 Monthly statements 25 Lessee ’ s liability unaffected 26 Commission directions 26.1 Direction to transmit or store goods Definitions 1 In this Regulation, (a) “actual deliveries”, in relation to a delivery month and a battery, means the quantity of crude oil actually delivered to the Commission from the battery to a field delivery point during the delivery month, as determined by the Commission on the basis of the information in the possession of the Commission, including the final shipper’s balance that related to or included that quantity; (b) “agency contract” means a contract under which the Crown in right of Alberta and the Commission appoint a person as their agent for the purpose, among others, of marketing certain quantities of the Crown’s royalty share of crude oil; (c) “agent” or “Commission’s agent” means a person appointed as an agent under an agency contract; (d) “agreement” means an agreement as defined in the Mines and Minerals Act ; (e) “amendment report” means a report furnished or required to be furnished to the Commission pursuant to a notice given under section 4(5); (f) “battery”, in relation to any crude oil, means each battery at which the crude oil is measured after its recovery from a well; (g) “Commission” means the Alberta Petroleum Marketing Commission; (h) “Commission’s field price” means (i) with respect to royalty oil delivered to the Commission in a delivery month, the value to the Crown of the oil, in dollars per cubic metre, as determined by the Commission at the field delivery point to which it was required to be delivered in that month; (ii) with respect to royalty oil that should have been but was not delivered to the Commission in a delivery month, the value to the Crown of the oil, in dollars per cubic metre, as determined by the Commission at the field delivery point to which the oil should have been delivered; (i) “delivery month” means June 2006 or any subsequent month; (j) “field delivery point” means the place at which royalty oil is required to be delivered to the Commission by or pursuant to section 11; (k) “final shipper’s balance” means a document prepared by the operator of a crude oil pipeline in accordance with normal oil industry practice showing the actual volume of crude oil delivered into and transported by the pipeline during a particular month for the account of a particular shipper; (l) “monthly statement” means a statement prepared and sent by the Commission to a battery operator pursuant to section 24(1); (m) “Petrinex” means the electronic information system administered by the Department; (n) “prescribed royalty quantity”, in relation to a delivery month and a battery, means the quantity of crude oil required to be delivered to the Commission in the delivery month in payment of the royalty owing to the Crown on crude oil recovered pursuant to one or more agreements from one or more wells whose production is delivered to that battery in that delivery month; (o) “reported royalty oil deliveries”, in relation to a delivery month and a battery, means (i) the quantity of royalty oil shown in a royalty report for the delivery month as having been delivered to the battery in that month, or (ii) where an amendment report pertaining to the battery is furnished for the delivery month, the quantity of royalty oil shown in the amendment report as having been delivered to the battery in that month; (p) “reporting deadline” means (i) in relation to a royalty report for a delivery month, the time in the next delivery month prescribed by the Commission pursuant to section 5(1) as the deadline for the furnishing of the report, and (ii) in relation to an amendment report, the time shown in the notice given under section 4(5) as the deadline for furnishing the amendment report; (q) “royalty oil” means the Crown’s royalty share of crude oil recovered pursuant to an agreement; (r) “royalty report”, in relation to a delivery month, means a report furnished or required to be furnished in respect of that delivery month by section 4(1); (s) “shipper” means the person for whose account crude oil is transported by a pipeline; (t) “underdelivery balance”, in relation to a delivery month and a battery, means the quantity, according to the records of the Commission, by which (i) the prescribed royalty quantity in respect of the battery for that delivery month exceeds (ii) the actual deliveries from the battery for that delivery month. AR 174/2006 s1;140/2014 Miscellaneous interpretive rules 2 (1) A reference in this Regulation to a month, whether by its name or not, shall be construed as the period commencing at 7:00 a.m. on the first day of the month and ending immediately before 7:00 a.m. on the first day of the next month. (2) A reference in this Regulation to the operator of a battery for or in respect of a delivery month shall be read as a reference to the person who was, according to the records of the Alberta Energy Regulator, the operator of that battery for that delivery month. (3) For the purposes of this Regulation, (a) crude oil delivered to a field delivery point for the account of the Commission is deemed to be royalty oil until proven otherwise, and (b) when crude oil recovered pursuant to an agreement is delivered to a field delivery point during a delivery month, the Crown’s royalty share of that crude oil is deemed to be delivered first. (4) The Minister may specify a date in 2007 as the “operational date” for the purposes of sections 6, 7 and 8. AR 174/2006 s2;254/2007;89/2013;136/2026 Petrinex 3 (1) Subject to this section, where (a) a royalty report or amendment report is required to be furnished to the Commission in respect of a delivery month, or (b) a battery operator furnishes a claim for a transportation allowance in respect of a delivery month pursuant to section 22, the report or claim must be furnished by electronic transmission to Petrinex in accordance with the directions of the Minister respecting the operation of Petrinex. (2) The Commission may (a) on application or its own initiative, exempt a battery operator from the requirements of subsection (1) in respect of one or more delivery months, and (b) give directions to the operator respecting an alternative mode by which the operator must furnish reports and claims for that delivery month or those delivery months, as the case may be. (3) Where the Commission considers it necessary to do so by reason of technical or other difficulties affecting the operation of Petrinex, the Commission may give general directions to all or any battery operators respecting an alternative mode for furnishing royalty reports, amendment reports and transportation allowance claims in respect of one or more delivery months, and in that event those reports and claims in respect of the delivery month or months must be furnished in accordance with the Commission’s directions. (4) The Commission may send to a battery operator (a) a monthly statement, and (b) where the monthly statement shows a net money amount owing to the Commission, the invoice for that amount referred to in section 24(3), by electronic transmission to Petrinex in accordance with the directions of the Minister respecting the operation of Petrinex, and a monthly statement and an invoice sent in accordance with those directions is deemed for the purpose of this Regulation to be received by the battery operator when it is received by Petrinex. AR 174/2006 s3;140/2014;197/2014 Part 1 Royalty Reporting Monthly royalty reports 4 (1) Every person who is the operator of one or more batteries in Alberta in respect of a delivery month shall, in accordance with this section and section 5, furnish to the Commission a report in respect of all of those batteries for that delivery month. (2) Subsection (1) does not apply to an operator in respect of a delivery month if there are no prescribed royalty quantities for that delivery month in respect of any of the operator’s batteries in Alberta. (3) A royalty report furnished in respect of a delivery month must show in respect of each of the operator’s batteries from which royalty oil was required to be delivered to the Commission in that delivery month, (a) the prescribed royalty quantity for that battery for that month, and (b) the field delivery point to which the prescribed royalty quantity was required to be delivered. (4) If a royalty report in respect of a delivery month includes a battery but shows no prescribed royalty quantity for that battery, then, for the purposes of this Regulation, the prescribed royalty quantity for that battery for that delivery month shall be deemed to be reported as nil. (5) If a royalty report is furnished in respect of a delivery month and the Commission is satisfied, on the basis of other records in its possession, that the reported royalty oil deliveries shown in the report for one or more of the operator’s batteries is greater than the respective prescribed royalty quantities for those batteries for that month, the Commission may, by a notice to the operator, direct the operator to furnish to the Commission at or before the deadline specified in the notice an additional report for that delivery month reflecting the amended information in respect of those batteries. (6) The following requirements apply with respect to the furnishing of royalty reports and amendment reports in respect of a delivery month: (a) the person furnishing the report (i) must be the person who was the operator in respect of the batteries required to be included in the report for the delivery month, and (ii) must be identified in the report by the operator code number assigned to that person by the Department; (b) the report must be in a format prescribed by the Commission; (c) each battery referred to in the report must be identified by the code number assigned to it by the Alberta Energy Regulator; (d) each field delivery point referred to in the report must be identified by the code number assigned to it by the Alberta Energy Regulator. (7) A royalty report and an amendment report (a) must contain all the information required by, and (b) must be prepared in accordance with, any general directions posted by the Commission on Petrinex respecting the format of those reports. (8) The Commission may by a general or special direction exempt from any provision of this section (a) any operator or class of operators in respect of one or more delivery months, or (b) any operator in respect of one or more of the operator’s batteries for one or more delivery months. AR 174/2006 s4;254/2007;89/2013;140/2014 Reporting deadlines 5 (1) The Commission shall, in respect of each year, (a) by order prescribe, for each delivery month in that year, the time in the next delivery month that constitutes the deadline for furnishing a royalty report for the delivery month, and (b) publish the reporting deadlines so prescribed in a manner that ensures that all battery operators are notified of them, including posting them on Petrinex and on the Department’s website. (2) If an operator is required to furnish a royalty report in respect of a delivery month, (a) the royalty report shall be furnished to the Commission by the reporting deadline for the delivery month to which it relates, and (b) any amendment report pertaining to the same delivery month shall be furnished to the Commission by the deadline specified in the notice given under section 4(5). (3) For the purposes of this section and section 6, where the Commission prescribes a reporting deadline for a royalty report for a particular delivery month, (a) each reporting deadline for each succeeding delivery month is a subsequent reporting deadline for that royalty report, and (b) with respect to an amendment report for the same delivery month, each royalty report reporting deadline subsequent to the reporting deadline for the amendment report is a subsequent reporting deadline for that amendment report. (4) For the purposes of this Part, a royalty report or an amendment report shall be considered to be furnished to the Commission (a) when it is received by Petrinex, or (b) if the report is required to be furnished by an alternative mode pursuant to directions under section 3(2) or (3), when it is actually received by the Commission in accordance with those directions. (5) The Commission may by a general or special direction extend the time limited by subsection (2)(a) or (b) for the furnishing to the Commission of a royalty report or amendment report in respect of a delivery month. AR 174/2006 s5;140/2014 Automatic penalties related to royalty reports 6 (1) A battery operator is liable to pay to the Commission a penalty, calculated in accordance with subsection (3), in the following cases: (a) where the operator is required to furnish to the Commission a royalty report in respect of a delivery month but fails to do so by the reporting deadline for that report, (i) each of the batteries that should have been included in the report is an unreported battery for the purposes of this section, and (ii) the operator is liable for a penalty in respect of each of those unreported batteries; (b) where the operator is required to furnish to the Commission an amendment report in respect of a delivery month but fails to do so by the reporting deadline for the amendment report, (i) each of the batteries that should have been included in the amendment report is an unreported battery for the purposes of this section, and (ii) the operator is liable for a penalty in respect of each of those unreported batteries; (c) where the operator furnishes a royalty report in respect of a delivery month by the reporting deadline for that report but the report omits one or more batteries that should have been included in the report, (i) each of the omitted batteries is an unreported battery for the purposes of this section, and (ii) the operator is liable for a penalty in respect of each of those unreported batteries; (d) where the operator furnishes an amendment report in respect of a delivery month by the reporting deadline for the amendment report but the amendment report omits one or more batteries that should have been included in the amendment report, (i) each of the omitted batteries is an unreported battery for the purposes of this section, and (ii) the operator is liable for a penalty in respect of each of those unreported batteries. (2) If a battery operator fails to furnish a royalty report or amendment report by a reporting deadline for the report and the failure continues beyond one or more of the subsequent reporting deadlines for the report, the operator is liable to pay to the Commission a penalty, calculated in accordance with subsection (3), for each time such a subsequent reporting deadline occurs without the royalty report or amendment report having been furnished. (3) If a battery operator is liable for a penalty under subsection (1)(a), (b), (c) or (d) or (2), the amount of the penalty is (a) $100 for each unreported battery not exceeding 10, and (b) $50 for each unreported battery in excess of 10. (4) Despite subsection (3), penalties arising under subsections (1) and (2) in respect of an operator in a month shall not exceed $5000. (5) If a royalty report or an amendment report is furnished to the Commission by its reporting deadline or by a subsequent reporting deadline for the report, but the report as it exists when the deadline occurs is not in compliance with section 4(6)(a), (b), (c) or (d), the royalty report or amendment report, as the case may be, shall, for the purposes of this section, be deemed to have not been furnished to the Commission by the reporting deadline for the report or the subsequent reporting deadline, as the case may be. (6) If any or all of the unreported batteries under subsection (1)(c) or (d) in relation to a royalty report or amendment report remain unreported batteries beyond one or more subsequent reporting deadlines for the royalty report or the amendment report, as the case may be, the operator is liable to pay to the Commission, for each time such a subsequent reporting deadline occurs, a penalty equal to (a) $100 in respect of each battery remaining unreported, not exceeding 10, and (b) $50 in respect of each battery in excess of 10 remaining unreported. (7) Despite subsection (6), penalties arising under that subsection in respect of an operator in a month shall not exceed $5000. (8) The person liable for a penalty under this section in relation to an unreported battery is the operator of the unreported battery for the delivery month concerned. (9) Despite any other provision of this section, liability for a penalty in relation to an unreported battery does not arise under this section prior to the operational date. (10) The Commission may, on application, waive all or part of a penalty imposed under this section on being satisfied (a) that the battery operator required to furnish the royalty report or amendment report to which the penalty relates failed to furnish it by the deadline referred to in section 5(2)(a) or (b), as the case may be, by reason of (i) circumstances beyond the operator’s control, or (ii) circumstances that the operator could not reasonably foresee, and (b) that, having regard to all the circumstances of the case, the operator furnished the royalty report or amendment report within a reasonable time after the reporting deadline for the report. Penalties related to inaccurate reporting 7 (1) Subject to this section, the Commission may impose penalties on a battery operator if the operator furnishes a royalty report for a delivery month and the report contains errors of any of the following kinds: (a) the information in the report in respect of a particular battery of the operator shows either (i) an incorrect code number for the battery, (ii) an incorrect code number for the field delivery point, (iii) the code number for a field delivery point other than the one prescribed under section 11 for that battery, or (iv) an incorrect amount as the prescribed royalty quantity for that battery for that delivery month; (b) the report includes a battery that was not one of the operator’s batteries. (2) The penalties that may be imposed on a battery operator pursuant to subsection (1) are (a) $100 for each battery in respect of which the report contains one or more errors described in subsection (1)(a), and (b) $100 for each error described in subsection (1)(b). (3) Despite subsection (2), penalties arising under subsection (1) in respect of an operator in a month shall not exceed $10 000. (4) The Commission may not impose a penalty under this section in respect of a royalty report furnished before the operational date. (5) The Commission may, on its own motion, reduce or revoke a penalty imposed under this section on the basis of new evidence which, if it had been known to the Commission when it made its decision to impose the penalty, would have affected that decision. Penalties for underdeliveries and overdeliveries 8 (1) Subject to subsection (4), the Commission may impose on the operator of a battery in respect of a delivery month a penalty computed in accordance with subsection (2) if, according to the records of the Commission, (a) the actual deliveries made from that battery in the delivery month are less than or greater than (b) the prescribed royalty quantity in respect of that battery for that delivery month. (2) A penalty imposed on an operator pursuant to subsection (1) in respect of a delivery month and a battery shall be an amount equal to the lesser of (a) $500, and (b) the product obtained by multiplying (i) the number of cubic metres of the underdelivery balance or the excess delivered quantity, as the case may be, referred to in subsection (1) by (ii) 10% of the Commission’s field price for that delivery month for (A) the underdelivery balance, or (B) the royalty oil with which the excess delivered quantity was commingled, as the case may be. (3) Despite subsection (2), penalties arising under subsection (1) in respect of an operator in a month shall not exceed $10 000. (4) The Commission may not impose a penalty under this section in respect of an underdelivery balance that arises before the operational date, unless the underdelivery balance remains outstanding on or after the operational date. (5) Where, after a penalty is imposed pursuant to subsection (1) in respect of a particular battery and delivery month, the Commission determines (a) that the penalty was calculated or imposed in error and that the error was wholly or partly attributable to a person other than the battery operator, or (b) that the penalty was otherwise incorrectly calculated, the Commission may adjust the penalty accordingly and cause the adjustment to be reflected in the next monthly statement to the operator of the battery for that delivery month. (6) If while a penalty imposed pursuant to subsection (1) remains wholly or partly unpaid the person liable under subsection (1) for the penalty is succeeded as operator of the battery, that person and each of the successors of that person as operator of the battery concerned are jointly and severally liable to the Commission for the penalty or the unpaid part of the penalty, as the case may be. Invoicing for penalties 9 (1) Where a penalty is imposed on an operator by or pursuant to this Part, the Commission must include that penalty in a monthly statement sent to the operator for the delivery month to which the penalty relates and must indicate in the statement the reason for the imposition of the penalty. (2) If a penalty is not imposed by virtue of section 6(9), 7(4) or 8(4) that would otherwise be imposed by or pursuant to this Part in the absence of that section, the Commission may nonetheless include in the monthly statement sent to the operator for the delivery month to which the penalty would have otherwise related, a statement indicating (a) the amount of the penalty had it been imposed, (b) the reason for which the penalty would have been imposed, and (c) the date when penalties of that kind can start to be imposed. Appeals respecting penalties 10 (1) Subject to this section, a person on whom a penalty is imposed by or pursuant to section 6, 7 or 8 may file with the Commission a notice of an appeal to the Minister respecting (a) that person’s liability for the penalty, (b) the amount of the penalty, or (c) in the case of a penalty imposed by section 6, the Commission’s refusal to grant a penalty waiver pursuant to section 6(10). (2) A notice of appeal must be filed with the Commission within (a) 2 months after the date of the monthly statement that includes the penalty that is the subject of the notice, or (b) one month after the date of the Commission’s notice to the battery operator of the Commission’s refusal to waive the penalty, in the case of an appeal under subsection (1)(c). (3) On the filing of a notice of appeal, the Minister shall conduct a review of the penalty and the representations in or accompanying the notice. (4) On considering an appeal under this section, the Minister may (a) confirm the penalty, (b) revoke the penalty on the ground that the appellant was not liable for it, (c) reduce the amount of the penalty, or (d) in the case of an appeal under subsection (1)(c), grant any penalty waiver pursuant to section 6(10) that the Commission could have granted, and must inform the appellant of the Minister’s decision. (5) The Commission may establish general directions respecting the filing of and content of notices of appeal under this section and the procedures for the conduct of those appeals. Part 2 Underdelivery and Overdelivery of Oil Field delivery point for royalty oil 11 (1) Subject to subsection (2), the place at which royalty oil shall be delivered to the Commission is prescribed as follows: (a) if the battery at which the Crown’s royalty share of crude oil is calculated is connected directly to a pipeline, the place where the royalty oil is to be delivered to the Commission is the point on the pipeline at which the battery is connected to it; (b) if the battery at which the Crown’s royalty share of crude oil is calculated is not connected directly to a pipeline, the place at which the royalty oil is to be delivered to the Commission is (i) the nearest unloading facility connected to a pipeline, or (ii) if there is another unloading facility connected to a pipeline entailing a higher net revenue return to the Crown, that other unloading facility. (2) The Commission may in a particular case direct or consent to the delivery of royalty oil at a place other than that prescribed under subsection (1), either indefinitely or for a specified period. Direction to deliver royalty deficiency 12 (1) If there is an underdelivery balance at a battery for a delivery month, the Commission, by a notice given to the operator of the battery for that delivery month, may direct that the default under the agreement or agreements resulting from the deficient delivery be remedied by the delivery in kind to the Commission of crude oil in equal quantity and of like quality to the underdelivery balance (a) in the month in which the direction is given, (b) in a particular subsequent month, or (c) in instalments in 2 or more particular subsequent months, whichever is specified in the direction. (2) A direction to an operator under subsection (1) relating to the underdelivery balance for a particular delivery month may include underdelivery balances for the same battery for any previous delivery months if the operator to whom the direction is given was also the operator of that battery for each of those previous delivery months. (3) The Commission may, with or without conditions, direct or consent to the postponement of delivery in kind of all or part of the volumes of royalty oil specified in a direction under subsection (1) to a later month or months and, on doing so, the direction is deemed to be amended accordingly. (4) If a direction under subsection (1) is not complied with, then, (a) to the extent that the quantity of crude oil delivered pursuant to the direction is less than the underdelivery balance or the aggregate of the underdelivery balances, as the case may be, specified in the direction, the Commission may, in a monthly statement, charge the operator with the payment to the Commission of an amount of money equal to, whichever of the following amounts is shown in the monthly statement, (i) the amount calculated by multiplying the quantity of the undelivered royalty oil by the Commission’s field price or respective field prices, as the case may be, for the delivery month or months in which the royalty oil was originally payable, or (ii) the amount calculated by multiplying the quantity of the undelivered royalty oil by the Commission’s field price or respective field prices, as the case may be, for the month or months in which the royalty oil should have been delivered in accordance with the direction, and (b) to the extent the quality of crude oil delivered pursuant to the direction is less than that required to be delivered pursuant to the direction, the Commission may, in a monthly statement, charge the operator with the payment to the Commission of an amount of money that in the Commission’s opinion is equal to the difference in value between the crude oil delivered and that required to be delivered. (5) When an amount of money becomes owing to the Commission under subsection (4), the direction under subsection (1) ceases to apply. (6) The Commission may not give a notice under subsection (1) in respect of an underdelivery balance for a delivery month if it has charged the operator under section 13(1) with the payment of a money amount in respect of the same underdelivery balance. Money in lieu of royalty deficiency 13 (1) If there is an underdelivery balance at a battery for a delivery month, the Commission, in a monthly statement sent to the operator of the battery, may charge the operator with the payment to the Commission of an amount of money calculated by multiplying the underdelivery balance by the Commission’s field price for that underdelivery balance for that month. (2) The Commission may not charge a battery operator with the payment of an amount of money under subsection (1) of this section in respect of an underdelivery balance for a delivery month if a notice has been given under section 12(1) in respect of the same underdelivery balance. Money amounts owing under section 12 or 13 14 (1) If the operator of a battery is charged with the payment of an amount of money owing in respect of an underdelivery balance pursuant to section 12(4) or 13(1), (a) the obligation to pay the amount of money so charged replaces the obligation to deliver the underdelivery balance in kind to the Commission, (b) full payment of the amount of money so charged operates to fulfil the obligation to deliver the underdelivery balance in kind to the Commission, and (c) any crude oil delivered to the Commission in purported payment in kind of the underdelivery balance shall be dealt with by the Commission under section 15 as though it were an overdelivery of crude oil to which that section applies. (2) If after a battery operator has been charged with the payment of a money amount under section 12(4) or 13(1) it is found that the amount owing to the Commission is greater or less than the amount charged, the Commission may adjust the amount owing to the Commission by decreasing or increasing it and cause the adjustment to be reflected in a subsequent monthly statement to the operator. (3) Where a money amount is owing to the Commission under section 12(4) or 13(1) by reason of a charge contained in a monthly statement and the amount remains wholly or partly unpaid after the person so charged is succeeded as the operator of the battery concerned then, despite anything in section 12 or 13, (a) the person charged with the payment of the amount, and (b) each of that person’s successors as operator of the battery, are jointly and severally liable to the Commission for the amount or the unpaid part of the amount, as the case may be. (4) Nothing in section 12 or 13 precludes the Commission from agreeing to accept, in lieu of payment of any money amount owing to the Commission under either of those sections, the delivery to the Commission of a quantity of crude oil having a value, based on the Commission’s field price, at least equal to the money amount owing. Overdelivery of crude oil 15 (1) For the purposes of this section, there is an overdelivery of crude oil to the Commission from a battery in a delivery month if, according to the records of the Commission, (a) the actual deliveries from the battery for that delivery month exceed (b) the prescribed royalty quantity in respect of the battery for that delivery month. (2) If there is an overdelivery of crude oil from a battery in any delivery month, the Commission must, by itself or through its agent, act on behalf of the owner of the excess quantity of crude oil for the sale and delivery of that excess quantity to a purchaser. (3) Where an excess quantity of crude oil is sold or delivered pursuant to subsection (2), (a) the Commission or the Commission’s agent, as the case may be, must negotiate the sale of the excess quantity of crude oil on the same terms and conditions that apply to the sale of the royalty oil unless the Commission or its agent is unable to do so because of market factors, and (b) subject to subsection (5), the Commission must pay to the operator concerned, in respect of each cubic metre of the excess quantity of crude oil, an amount equal to the sale proceeds received by the Commission for the excess quantity less the amount per cubic metre prescribed by the Commission as a fee for its services in carrying out the sale and delivery of the excess quantity. (4) If a payment of an amount is made under subsection (3)(b) to the operator of the battery, (a) the operator is responsible for paying that amount to the former owner or owners of the excess quantity to the extent that the operator was not its owner, and (b) the payment to the operator operates to discharge the Commission of any liability to pay that amount to the former owner or owners of the excess quantity. (5) The Commission is not liable (a) to any person for the payment of interest in relation to any amount received by the Commission under this section, or (b) to pay any amount to the battery operator or any owner or former owner of the excess quantity in respect of any portion of the excess quantity lost or destroyed before delivery to the purchaser of the excess quantity. Part 3 Penalties Related To Inaccurate Forecasting Interpretation 16 (1) In this Part, (a) “avoidance charge” means a cost or charge reasonably incurred by a shipper for the purpose of avoiding the imposition of a non‑performance penalty, or reducing the amount of a non‑performance penalty, that would otherwise be imposed on the shipper; (b) “cleaning plant” means a crude oil cleaning plant that (i) is connected to a gathering pipeline but is not operated by the owner of that pipeline, or (ii) is not connected to a gathering pipeline; (c) “connected battery” means a battery that is connected directly to a gathering pipeline or feeder pipeline; (d) “document” means a document or other memorandum of information whether in writing or in electronic form or represented or reproduced by any other means; (e) “feeder pipeline” means a crude oil pipeline in Alberta that is connected to and transports crude oil to a trunk line; (f) “flow‑through penalty” means a penalty imposed by the Commission pursuant to section 18(1); (g) “Form A forecast” means a document, commonly referred to in the oil industry as a Form A forecast, provided prior to a delivery month in accordance with normal oil industry practice by the operator of a connected battery, truck terminal, cleaning plant or gathering pipeline to the operator of a feeder pipeline and showing (i) a forecast of the volume of crude oil to be delivered by the operator of that unconnected battery, truck terminal, cleaning plant or gathering pipeline in the delivery month, (ii) the shippers for whose account the crude oil is to be delivered by those operators in the delivery month, and (iii) the portions of that volume allocated to the accounts of those shippers; (h) “Form C forecast” means a document, commonly referred to in the oil industry as a Form C forecast, provided prior to a delivery month in accordance with normal oil industry practice by the operator of a feeder pipeline to (i) each operator of a connected battery, truck terminal, cleaning plant or gathering pipeline that is expected to deliver crude oil to the feeder pipeline in that delivery month, and (ii) each shipper for whose account crude oil is to be delivered to the feeder pipeline in that delivery month, and showing a forecast of the volume of crude oil that will be tendered for delivery to that feeder pipeline in that delivery month, the shippers for whose account the crude oil is to be delivered by those operators and the portions of those volumes allocated to the accounts of those shippers; (i) “gathering pipeline” means a crude oil pipeline in Alberta that is connected to one or more batteries, truck terminals or cleaning plants and transports crude oil to a feeder pipeline; (j) “non‑performance penalty”, in relation to a delivery month, means a penalty imposed on a shipper by the operator of a crude oil pipeline pursuant to its tariff by reason of a failure by the shipper to tender for delivery to the pipeline in that delivery month (i) the volume of crude oil that the shipper notified the pipeline operator would be tendered for delivery to the pipeline by that shipper in that delivery month, or (ii) the percentage specified in the tariff of that volume of crude oil; (k) “notice of shipment” means (i) a document, commonly referred to in the oil industry as a notice of shipment, given by a shipper to the operator of a crude oil pipeline prior to a delivery month in accordance with normal oil industry practice and showing, among other things, the volume of crude oil to be tendered for delivery by the shipper to that pipeline during the delivery month, (ii) if the shipper prepares a corrected notice of shipment after being notified of discrepancies in the initial notice referred to in subclause (i), the corrected notice of shipment, or (iii) if the pipeline operator informs the shipper of an apportionment among shippers of the total volume of crude oil that may be tendered for delivery to the pipeline in that delivery month, the revised notice of shipment given by the shipper to the operator reflecting the reduction of the volume of crude oil to be tendered for delivery by that shipper in that delivery month resulting from the apportionment; (l) “oilfield facility” means a battery, a truck terminal, a cleaning plant or a gathering pipeline; (m) “transfer forecast” means a forecast that (i) is part of a series of transfer forecasts forming part of the reporting and forecasting system administered by the oil industry, (ii) is prepared by an oilfield facility operator in accordance with normal oil industry practice, and (iii) shows, among other things, the volumes of crude oil intended to be delivered by that oilfield facility operator to another oilfield facility operator in a delivery month; (n) “truck terminal” means a crude oil tank terminal connected to a gathering pipeline or feeder pipeline not operated by the operator of that pipeline and to which crude oil is transported by truck; (o) “trunk line” means an extra‑provincial crude oil pipeline; (p) “unconnected battery” means a battery that is not directly connected to a gathering pipeline or feeder pipeline. (2) If the Commission’s agent, in its capacity as a shipper, is liable to the operator of a crude oil pipeline for a non‑performance penalty in respect of a delivery month and the agent is entitled under the agency contract to recover all or part of the amount of the penalty from the Crown and the Commission, the amount so recoverable shall, for the purposes of this Part, be deemed to be a non‑performance penalty imposed on the Commission by the operator of the pipeline. (3) If the Commission’s agent, in its capacity as a shipper, incurs an avoidance charge in respect of a delivery month and the agent is entitled under the agency contract to recover all or part of the avoidance charge from the Crown and the Commission, the amount so recoverable shall, for the purposes of this Part, be deemed to be an avoidance charge incurred by the Commission. (4) The Commission may determine what constitutes normal oil industry practice for the purposes of this Regulation and in doing so shall have regard to the system of forecasting and reporting administered by the oil industry. Notice to furnish information 17 (1) Subject to this section, the Commission may give a notice to a person who is or was the operator of an oilfield facility or feeder pipeline for a delivery month to furnish to the Commission, by the deadline specified in the notice, (a) a copy of a transfer forecast or a Form A forecast prepared by or on behalf of that operator in respect of that delivery month, or (b) information relating to the preparation of the transfer forecast or the Form A forecast. (2) The Commission may give a notice under this section only for the purpose of obtaining information for the purpose of determining (a) the liability of an oilfield facility operator for a flow‑through penalty in respect of the delivery month concerned, and (b) the amount of the penalty. (3) A person who is required to comply with a notice given under this section is liable to pay to the Commission (a) a penalty of $100, if the copy of the forecast or the information referred to in the notice is not furnished to the Commission by the deadline specified in the notice, and (b) if the failure to comply with the notice continues for one or more months following the deadline specified in the notice, a further penalty of $100 for each time any of those months expires without the notice having been complied with. (4) If a notice given under this section is only partially complied with by reason of the omission of any copy of a forecast or of any information required to be furnished then, for the purposes of subsection (3), the notice shall be deemed not to have been complied with until the omitted copy or information is furnished to the Commission. Flow‑through penalties 18 (1) The Commission may, subject to this Part, impose a penalty on one or more oilfield facility operators in respect of a delivery month in any or all of the following circumstances: (a) if the Commission, in its capacity as a shipper of crude oil, is liable to the operator of a crude oil pipeline for a non‑performance penalty in respect of that delivery month; (b) if a non‑performance penalty is deemed to be imposed on the Commission in respect of a delivery month by reason of section 16(2); (c) if the Commission, in its capacity as a shipper, incurs an avoidance charge in respect of that delivery month; (d) if the Commission is deemed to have incurred an avoidance charge in respect of that delivery month by reason of section 16(3). (2) The Commission may impose flow‑through penalties in respect of a delivery month only if it determines (a) that the non‑performance penalty imposed or deemed to be imposed on the Commission in respect of that month, or the avoidance charge incurred or deemed to be incurred by the Commission in respect of that month, was attributable to the fact that the notice of shipment for the month given by the Commission or its agent to the operator of the pipeline showed volumes of crude oil to be tendered for delivery that were greater than the actual volumes delivered, as shown in the Commission’s or the agent’s final shipper’s balance for the month, (b) that the crude oil volumes shown in the Commission’s or the agent’s notice of shipment as the volumes to be tendered for delivery in the month were based on crude oil volumes in Form C forecasts provided to the Commission or its agent by one or more operators of feeder pipelines that transported the crude oil, and that the volumes of crude oil actually delivered in the month were less than the volumes shown in the Form C forecasts, and (c) that the reason for the overforecasting of crude oil deliveries in the Form C forecasts was attributable to inaccurate forecasting of deliveries in one or more of the Form A forecasts on which the Form C forecasts were wholly or partly based or in one or more transfer forecasts on which one or more Form A forecasts were wholly or partly based. (3) The Commission may determine which oilfield facility operators are liable for flow‑through penalties on the basis of (a) the Form A forecasts and transfer forecasts provided by those battery operators who delivered, or were required to but did not deliver, royalty oil to the Commission in the delivery month concerned, (b) one or more transfer forecasts that led to an inaccurate Form C forecast on which the Commission or its agent relied in preparing the Commission’s or the agent’s notice of shipment for a delivery month, where each of those transfer forecasts either (i) contained an excessive forecast of the volume of royalty oil to be delivered by the oilfield facility operator who prepared the transfer forecast, or (ii) changed the forecast of deliveries of royalty oil in another transfer forecast that preceded it in the series of transfer forecasts for that delivery month and that caused the other transfer forecast to become excessive or more excessive in relation to royalty oil deliveries, and (c) any other information obtained by the Commission pursuant to section 17 or otherwise in the possession of the Commission and containing evidence of excessive forecasting of royalty oil deliveries. (4) The Commission may determine the amounts of the respective flow‑through penalties imposed on oilfield facility operators determined to be liable for those penalties under subsection (3), subject to the following: (a) a penalty imposed on an operator in respect of a delivery month is subject to a minimum of $250; (b) the aggregate amount of the flow‑through penalties imposed on all oilfield facility operators in Alberta for a delivery month must not exceed the aggregate of (i) the non‑performance penalties imposed or deemed to be imposed on the Commission in respect of that delivery month, (ii) the avoidance charge incurred or deemed to have been incurred by the Commission in respect of that delivery month, and (iii) an amount determined by the Commission as its administration costs incurred in connection with the imposition of the flow‑through penalties for that delivery month, unless that aggregate amount is exceeded by reason of the imposition of minimum penalties under clause (a). Waiver of penalty 19 The Commission may, on application by the oilfield facility operator concerned, waive all or part of a penalty imposed on that operator under this Part if the Commission considers the waiver warranted in the circumstances. Invoicing for penalties 20 Where a penalty is imposed on an oilfield facility operator pursuant to this Part, the Commission must (a) send to the oilfield facility operator an invoice for the penalty and inform the operator of the reason for its imposition and the deadline by which payment of the penalty must be received by the Commission, or (b) in the case of a penalty imposed on a battery operator, include the penalty in a monthly statement sent to the battery operator and showing the reason for the penalty. Appeals respecting penalties 21 (1) Subject to this section, a person on whom a penalty is imposed under this Part may file with the Commission a notice of an appeal to the Minister in respect of (a) that person’s liability for the penalty, (b) the amount of the penalty, or (c) the Commission’s refusal to waive the penalty pursuant to section 19. (2) A notice of appeal must be filed with the Commission within (a) 2 months after the date of the invoice for the penalty or the monthly statement that includes the penalty, as the case may be, or (b) one month after the date of the Commission’s notice to the battery operator of its refusal to waive the penalty, in the case of an appeal under subsection (1)(c). (3) On receiving a notice of appeal, the Minister shall conduct a review of the penalty and the representations in or accompanying the notice.

(4) On concluding the review, the Minister must either (a) confirm the penalty, (b) revoke the penalty on the ground that the appellant was not liable for it, (c) reduce the amount of the penalty, or (d) grant any penalty waiver pursuant to section 19 that the Commission could have granted, in the case of an appeal under subsection (1)(c), and must inform the appellant of the Minister’s decision. (5) The Commission may establish general directions respecting the filing of and content of notices of appeal under this section and the procedures for the conduct of those appeals. Part 4 General Truck transportation allowances 22 (1) Subject to this section, the Crown is liable to a battery operator for an allowance based on an average of the costs incurred in the transportation of royalty oil by truck during a delivery month from that operator’s battery to an unloading facility connected to a pipeline. (2) The Crown is liable for an allowance under this section only to the extent that the Minister consents to be liable for the allowance. (3) The payment of an allowance under this section is subject to any conditions the Minister prescribes, in addition to the following conditions: (a) the royalty oil must have been transported in an uninterrupted manner; (b) the royalty oil must have been delivered to the unloading facility to which it was required to be delivered during the delivery month concerned pursuant to section 11(1)(b) or (2), whichever applied; (c) the royalty oil must have been delivered to the unloading facility for the Crown’s account; (d) the royalty oil, while being transported, met the quality specifications for the pipeline to which the royalty oil was delivered from the unloading facility. (4) If a condition referred to in subsection (3) was breached in respect of an allowance paid under this section, the Minister may recover the allowance by action or by way of set‑off under section 23. (5) An allowance for which the Crown is liable under this section shall be paid to the operator of the battery for the delivery month in which the royalty oil was transported by truck. (6) The Minister may not consent to the payment of an allowance under this section unless a claim is made by the operator of the battery for the delivery month concerned by the end of the 2nd year following the year in which the delivery month occurred. Commission ’ s right of set‑off 23 (1) The Commission has the right to set off (a) any amount owing to the Commission by any person under this Regulation against (b) any amount owing to that person by the Commission under this Regulation. (2) A set‑off referred to in subsection (1) may be reflected in an invoice referred to in section 20(a) or in a monthly statement. Monthly statements 24 (1) The Commission shall in each delivery month prepare and send to each battery operator a statement showing, as circumstances require, the following: (a) a reconciliation of (i) the operator’s reported royalty oil deliveries for the preceding delivery month, and (ii) the operator’s actual deliveries for the preceding delivery month; (b) a reconciliation of (i) the operator’s actual deliveries for the preceding delivery month, and (ii) the prescribed royalty quantities in respect of the operator’s batteries for the preceding delivery month; (c) all money amounts calculated by the Commission as owing by the operator to the Commission under this Regulation as of the date of the statement; (d) all money amounts calculated by the Commission as owing by the Commission to the operator under this Regulation as of the date of the statement; (e) adjustments of quantities of crude oil or money amounts shown in previous statements prepared under this section. (2) If a monthly statement shows a net money amount owing by the Commission to the operator, the Commission shall pay that amount to the operator. (3) If a monthly statement shows a net money amount owing by the operator to the Commission (in this section called the “net invoice amount”), the monthly statement shall be accompanied by an invoice for that net invoice amount showing the due date for payment to the Commission of the net invoice amount and containing a statement regarding the operator’s liability for interest under subsection (4). (4) If an invoice is sent to an operator under subsection (3) and the net invoice amount in the invoice is not paid in full to the Commission on or before the due date for payment specified in the invoice, interest is owing to the Commission on the balance of the net invoice amount remaining unpaid from time to time after the due date until the date on which the entire balance of the unpaid net invoice amount is received by the Commission together with any interest on that unpaid balance to that date. (5) If interest is payable under subsection (4) in respect of any day, the rate of interest in respect of that day is the yearly rate that is 1% greater than the ATB prime rate in effect on the first day of the month in which the day occurs and interest shall, unless the Minister directs otherwise, be compounded monthly in respect of the period for which it is computed. (6) In subsection (5), “ATB prime rate” means the yearly rate of interest established by Alberta Treasury Branches as its prime lending rate on loans payable in Canadian dollars. Lessee ’ s liability unaffected 25 Nothing in this Regulation operates to relieve a lessee from the lessee’s liability to the Crown under an agreement for the payment of royalty. Commission directions 26 For the purpose of enabling it to carry out its responsibilities under the Petroleum Marketing Act , the Commission may give such directions as it considers necessary to any lessees, battery operators, pipeline operators, agents or any other persons, and the persons to whom the directions are given shall comply with them. AR 174/2006 s26;168/2010 Direction to transmit or store goods 26.1 (1) For the purposes of section 16 of the Petroleum Marketing Act , in this section “supplier” means a lessee, battery operator, pipeline operator, a representative or service provider acting on behalf of a lessee, battery operator or pipeline operator or another person involved in the transportation or storage of crude oil. (2) Subject to subsections (3) and (4), if crude oil is required to be delivered to the Commission pursuant to an agreement, a contract under section 9(a) of the Mines and Minerals Act or an enactment, the Commission may direct a supplier (a) to transmit the crude oil by the supplier’s pipeline to a storage facility in Alberta designated by the Commission or to a point in Alberta designated by the Commission that is upstream of a storage facility, or (b) to accept and store the crude oil in the supplier’s storage facility. (3) If the Commission makes a direction under subsection (2)(a) but is unable to reach an agreement with the supplier as to the just and reasonable consideration to be paid by the Commission for the transmission of the crude oil by the pipeline, section 110 of the Public Utilities Act applies. (4) The Commission shall not make a direction under subsection (2)(b) in respect of a storage facility consisting of an underground formation unless the Alberta Energy Regulator has previously approved the scheme under section 39(1)(d) of the Oil and Gas Conservation Act . AR 235/2017 s2;279/2025 27 Repealed AR 247/2018 s2.