Calgary-based MAGA Energy ordered to suspend operations: Alberta Energy Regulator

The Alberta Energy Regulator (AER) is ordering a Calgary-based energy company to suspend its operations after failing to pay its taxes and “meet its commitments.”

MAGA Energy Ltd. has two weeks to stop its wells, turn off equipment at its facilities, and discontinue use of any active or remaining pipelines. The company currently holds 581 wells, 108 facilities, and 801 pipeline segments.

The AER says this is being done to “protect the public and environment,” adding that the director found it cannot follow regulations.

“Based on MAGA’s unpaid municipal taxes, AER and Orphan Well Association debt, and failure to meet its commitments, the director assessed that the licensee does not have the capacity to fulfil its regulatory and liability obligations,” the AER said.

The order, made on April 22, includes a list of requirements that MAGA must address before it can resume operations. Those include addressing remediation issues at several sites, resolving outstanding field inspections, complying with pipeline rules, and spending the minimum legally required amount of money for the cleanup of inactive sites.

It also must provide monthly progress reports to the AER.

The provincial energy regulator says it may use further “compliance and enforcement tools” if MAGA doesn’t follow through.

“As described in Manual 013, these tools include notices of noncompliance, warnings, orders, administrative sanctions or administrative penalties,” the release reads.

Oil and gas companies failing to pay landowners or pay property taxes to municipalities is a long-standing issue in Alberta, with the province’s rural communities owed more than $250 million as of last year. MAGA Energy is just one company in arrears.

Landowners and the Rural Municipalities of Alberta (RMA) have been calling on the government for years to fix the problem, which has led to some policy changes.

A report from the RMA lists several recommendations the government could use to address the issue, such as requiring oil and gas companies to stay on top of their property taxes as a condition of having an operating licence.

The report also calls on the province to prevent companies not in good standing for property taxes from acquiring new leases or wells. It would replace the current rule, which says companies more than $20,000 behind aren’t able to acquire new leases.

In 2023, the provincial government implemented a rule requiring the AER to block the transfer of oil and gas leases to companies that were more than $20,000 in arrears. The Investigative Journalism Foundation reported that despite the rule, some companies, including MAGA Energy, still managed to acquire new wells.

With files from Jack Farrell, The Canadian Press