Liability Risk Stratification
In the shadow of the SCC Redwater decision, optimized situational awareness related to asset liability is critical.
Not all end-of-life asset liability is created equal. In the shadow of the SCC Redwater decision, all parties involved in the sale, purchase or financing of energy assets require significantly expanded assessment capabilities to ensure that liability risk is understood and offset. Where legacy ARO systems in the market had functioned largely as “Deemed Liability” aggregators used to model Licensee Liability Ratio’s (LLR) the targeted AI powering LEL’s Insights considers second, and third order closure costs not captured in current estimated liability methodologies allowing for site-specific risk across five levels of severity
In response to the economic exposure created by the Redwater decision, LEL developed a weighted, characteristic-based liability scoring system. This system provides all transaction parties with a normalized view of liability risk, even across provincial jurisdictions with varying regulatory reporting standards. It is particularly effective at identifying site-specific liabilities that exceed the Regional Estimated Liability guidance published by regulators, often treated as a cap by legacy ARO evaluation models.