Observers are criticizing Alberta Energy Minister Brian Jean's suggestions on how the province might clean up its thousands of abandoned oil wells, saying they favour industry and lack input from the public.
"Albertans are owed a better explanation than they have received so far about why this is necessary," said Martin Olszynski, a professor of resource law at the University of Calgary.
Jean's department is opening consultations on how to deal with Alberta's nearly half-million oil and gas wells, two-thirds of which are not producing. Estimates of the potential cost vary wildly into the hundreds of billions of dollars.
In an interview, Jean suggested that although it's not his preferred solution, some form of public assistance may be needed to clean up the mess despite industry's legal obligations. He also suggested municipalities may have to take a haircut on their tax levies and that industry's regulatory burden may need to be lightened.
But Olszynski said many energy companies are thriving. Any kind of a publicly financed bailout would raise serious questions, Olszynski said.
"There is no rational explanation for this support when you realize this industry is not a monolith. In the absence of a better explanation, Albertans are properly left to wonder what's going on."
Katie Morrison of the Canadian Parks and Wilderness Society said using public resources on the problem doesn't address how it came to be in the first place.
"We can look at the short of what needs to be done immediately, (but) we also need to be looking at how do we prevent this. I don't see anything in what (Jean's) been talking about so far that's going to prevent the situation from happening over and over."
Rural Municipalities of Alberta president Paul McLauchlin said municipal taxes are well down the list of a well owner's expenses and that 94 per cent of companies pay their taxes just fine.
"This narrative that (reducing) municipal taxes is what's going to save the industry is a completely ridiculous notion," he said.
He said business groups such as the Alberta Enterprise Group -- once headed by now-premier Danielle Smith -- have been lobbying for municipal tax reductions for years.
"The government's going to do this on the backs of rural Albertans," McLauchlin said. "Rural MLAs need to speak up."
Opposition New Democrat energy critic Nagwan Al-Guneid said reducing environmental liabilities for energy companies with public resources amounts to breaking the law.
"It is unacceptable to use public money to clean up the legal obligations of companies to clean up the environmental damage they cause," she said.
Olszynski also questioned Jean's statement that the Alberta Energy Regulator's footprint is too large. He pointed out the province's auditor general found in a January report that the regulator underestimated cleanup liabilities and didn't have a good handle on pipeline reclamation or the state of Alberta's 59,000 pieces of energy infrastructure.
"It's hard to square the auditor general's concerns with the idea of a lighter regulatory burden."
If anything, the regulator's reach should be stronger, said Al-Guneid.
"I think we have great regulations," she said. "They're not being enforced."
Both Olszynski and Morrison criticized the lack of public input in Jean's consultations.
"It's often that (this government) looks at the industry perspective and the economic perspective but not at the whole picture," Morrison said.
Olszynski said leaving the public out of such discussions is how Alberta wound up with such a large liability in the first place.
"Surely, by now, you would think maybe we should bring the public in."
Richard Wong of the Canadian Association of Petroleum Producers said government moves have helped operators reduce the inventory of inactive wells by 18,000 from 2018 to 2023. The overall percentage of inactive wells has fallen from 21 to 17 over the last four years.
"While there is more to be done to further accelerate the process for well closures, (the association) is looking forward to working with other stakeholders on potential regulatory, policy and fiscal measures that may be needed to address the challenges in regions of Alberta with mature oil and gas-producing assets through the province’s mature asset strategy consultations,” Wong wrote in an email.
This report by The Canadian Press was first published Sept. 17, 2024.
Comments
Alberta's oil industry executives are acting like spoiled brats. And when it comes to cleaning up their mess, spoiled brats will find a million excuses to delay and procrastinate... and put the burden on others. The spoiled brats of Alberta would like the pensioners of Canada to pay for their abandoned wells.
That is why the claim to 53% of the Canada Pension Plan is ludicrous! Or should we say highway robbery!
We do get what we vote for.
Listening to Brian Jean during the election the NDP won in 2015 I was shocked to hear nothing but one phrase over and over and over again: "I can tell you one thing, we won't raise your taxes".
Now this man of the single promise is illustrating for all tax whiners what he will use those low taxes for: Bailing out the richest industry on earth from its legal responsibilities to clean up their messes.
And Ax the Tax PP is running on the same old cow path.
What we should all see clearly is what they regularly do with what taxes Albertans do pay: they give them away as incentives for Fossil Fuel companies to follow the law.
Meanwhile the schools we need built and the health care we need adequately funded will have to wait. DEFENDING THE OIL COMPANIES IS THEIR TOP PRIORITY.
Axing the greenhouse gas emissions those fossil fools continue to ramp up? Jist fergit about it.
When it was discovered that 78% of CAPP's represented companies were majority foreign-owned, the first question that popped into my head was, How many of them will split the scene when the going gets rough and leave Alberta with a huge environmental mess? The second question appeared right after, Will Alberta try to goad the rest of the nation into paying for the cleanup?
There are no answers yet. As to the second question, proponents of the oil industry will try to persuade the nation that all the taxes and fees they paid and benefits they fostered to the nation over the decades require some kind of payback, such as major taxpayer assistance in the cleanup they have always been legally obligated to conduct. More than one federal political party will no doubt have members that agree with that premise, from a government revenue and industrial labour perspective.
The problem with that perspective is that it disregards the fact that a benefit is not fully realized until its associated liabilities have been addressed. It stands to reason that these liabilities extend not just to abandoned wells and oilsands moonscapes, but to fossil fuel dependency and the effects of climate change. Given the industry's history of fighting against taking responsibility to fix the planetary and localized scale problems it has created, and to obfuscate the sheer depth of the problem, it is mainly Alberta that will eventually be forced to face the music.
By then I really hope many other provinces -- not to mention the feds -- have moved deep into electrification with renewables and urban efficacy. Their collective response may be similar to the old saying, You made your own bed, now you've got to lie in it.