Observers criticize Alberta’s energy minister’s oil well cleanup prospects Achi-News

Observers are criticizing Alberta Energy Minister Brian Jean’s suggestions for how the province could clean up its thousands of abandoned oil wells, saying they are pro-industry and lack public input.

“Albertans are due a better explanation than they’ve received so far as to 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 a 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 this is not his preferred solution, some form of public assistance may be needed to clean up the mess despite the industry’s legal obligations. He also suggested that municipalities may have to cut their tax levy and the regulatory burden on the industry may need to be eased.

But Olszynski said many energy companies are thriving. Any kind of publicly funded bailout would raise serious questions, Olszynski said.

“There is no logical explanation for this support when you realize that this industry is not a monolith. In the absence of a better explanation, Albertans are left to wonder what’s going on. “

Katie Morrison of the Parks and Wilderness Association of Canada said using public resources on the problem doesn’t address how it got there 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 to prevent this. I don’t see anything in what (Jean) has been talking about so far that is going to stop the situation from happening again and again.”

Alberta Rural Municipalities president Paul McLauchlin said municipal taxes are way down the list of well owner costs and 94 percent of companies pay their taxes properly.

“This narrative that (reducing) municipal taxes is what’s going to save the industry is a completely ridiculous idea,” he said.

He said business groups such as the Alberta Enterprise Group — once led by now front-runner Danielle Smith — have been lobbying for municipal tax reductions for years.

“The government is 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 obligations for energy companies with public resources was 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,” he said.

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Olszynski also questioned Jean’s statement that the Alberta Energy Regulator’s footprint was too large. He pointed to the province’s auditor general finding in a January report that the regulator underestimated cleanup obligations and didn’t have a good handle on pipeline recovery or the condition of 59,000 pieces of Alberta’s energy infrastructure.

“It’s hard to reconcile the auditor general’s concerns with the idea of ​​a lighter regulatory burden.”

If anything, the regulator’s reach should be stronger, Al-Guneid said.

“I think we have great regulations,” he said. “They are not forced.”

Olszynski and Morrison criticized the lack of public input in Jean’s consultations.

“Often that (this government) looks at the industry perspective and the economic perspective but not at the whole picture,” said Morrison.

Olszynski said leaving the public out of such discussions is how Alberta ended up with such a large liability in the first place.

“Surely, by now, you’d 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 list of inactive wells by 18,000 between 2018 and 2023. The overall percentage of inactive wells has dropped from 21 to 17 over the past four years.

“Although there is more to be done to speed up the process for further closure of wells, (the association) looks forward to working with other stakeholders on possible regulatory, policy and financial measures that may be required to go to the 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.

& copy 2024 The Canadian Press