ALDP News

MEDIA STATEMENT

April 24, 2020

ALDP response to Alberta’s Site Rehabilitation Program

Alberta uses Canadians’ money to bail out oil and gas companies in direct attack on Polluter Pays Principle

Regan Boychuk, co-founder and lead researcher of the Alberta Liabilities Disclosure Project, issues the following statement: 

“The province’s Site Rehabilitation Program is a direct attack on Canada’s Polluter Pays Principle. Provincial and federal law are clear: industry, not taxpayers, must fund the cleanup of old oil and gas infrastructure.

 

By releasing $1 billion in Canadians’ tax dollars as grants not loans to industry, the Alberta Government is bailing out oil and gas companies that have profited from our public resources, but now refuse to adequately fund their own cleanup. In many cases, these deadbeat businesses have stopped paying municipal property taxes and compensation to farmers and ranchers.

 

It’s clear the UCP’s strategy is to delay cleanup accountability as the sun continues to set on the industry. Albertans, and all Canadians, should be outraged.

The province is touting 5,300 created by this new program, but what they’re not telling the public is that, if the Polluter Pays Principle were properly enforced, loans to industry could leverage ten times the job creation and environmental benefits.

We call on all Canadians to contact their elected officials to demand that they hold industry accountable and stop using public dollars to cover private cleanup costs.”

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For more information or to arrange an interview, please contact: 

Regan Boychuk, 403-479-8637, aldpcoalition@gmail.com  

MEDIA STATEMENT

April 17, 2020

ALDP response to federal funding for oilfield cleanup

Funding will jumpstart well cleanup, but threatens integrity of Polluter Pays Principle

Regan Boychuk, co-founder and lead researcher of the Alberta Liabilities Disclosure Project, issues the following statement: 

“The fact that a long-overdue cleanup of Alberta’s oil and gas wells can now begin in earnest is something to celebrate -- but not that the public will be paying for the vast majority of it. 

 

Our hope had been that any Federal funds to spur well cleanup would be in the form of a loan, with full, strict and short-term repayment conditions by industry. The $200M to Alberta’s Orphan Well Association falls under these conditions and is a welcome development, as are the new oversight provisions for well cleanup. 

 

But the vast majority of the support announced today is a transfer to the Government of Alberta without any mechanism to guarantee that industry will ultimately pay for its cleanup. The Polluter Pays Principle affirms that the oil and gas industry is legally responsible for the cleanup costs of the hundreds of thousands of wells they’ve drilled in Alberta.  If these funds are not repaid by industry once the cleanup work is done, today’s announcement will become another public subsidy to oil and gas, and undermine the crucial principle that polluters are responsible for cleaning up their mess.

 

Today marks the beginning of the $40-70 billion dollar cleanup of Alberta’s oil and gas wells. The precedent set during this crisis will determine whether Polluter Pays is upheld throughout the much bigger job to come. For the hundreds of thousands of people affected by aging oil and gas wells in this province -- it’s time to get organized. ALDP is here to help.”

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For more information or to arrange an interview, please contact: 

Regan Boychuk, 403-479-8637, aldpcoalition@gmail.com  

Letter to Trudeau: Cleanup loan must come with strings

Industry must pay for oilwell cleanup, not Canadians

FOR IMMEDIATE RELEASE

 

MEDIA CONTACT:

Regan Boychuk, Alberta Liabilities Disclosure Project

reganboychuk@gmail.com : 403-479-8637
 

April 14, 2020 (CALGARY, AB) — Canadians shouldn't lend oil and gas producers any money to clean up their old wells without strict conditions it will be paid back, urged the Alberta Liabilities Disclosure Project (ALDP) today in an open letter to Prime Minister Trudeau and Finance Minister Morneau co-signed by policy experts, landowners, and former regulators that make up the ALDP.

“Alberta’s oil and gas producers have a scandalous habit of dining on the profits of Alberta’s public resources, and dashing when it’s time to pay their dues to society,” says ALDP co-founder Regan Boychuk. Right now, the industry collectively owes $173 million in unpaid property taxes, owes millions in unpaid landowner compensation, and has saved less than one per cent of the $260 billion the province estimates is needed to clean up energy infrastructure in Alberta.

“Before they leave, producers must pay to undo the damage they’ve profited from. That’s the law in Canada, but Alberta's failed to hold companies to account. Now they want us to pay for it. We are not their bank machine — especially in a pandemic,” says Boychuk.

“In Alberta, industry hasn’t paid the full cost of orphan cleanup every year, either. That's also the law in Alberta, but it's ignored. If the province charged industry properly, there would be no orphaned wells at the end of the year, nor would it ever need a loan.”

“You are not allowed to dump your trash in someone else’s yard, and expect others to clean it up. They shouldn’t be, either. Without strict conditions, any aid for oilwell cleanup becomes a blank cheque to irresponsible producers.”

The open letter outlines six necessary conditions for any federal loan for Alberta’s oilwell cleanup, to create clean jobs while upholding Canada’s Polluter Pays Principle:
 

  1. Require Alberta to follow the law and collect enough from industry to reclaim all its orphans, every year. By law (Sections 73(2) & 70(1) of Alberta’s Oil and Gas Conservation Act), Alberta should be collecting enough fees from industry annually to cover the cost to clean up its full inventory of orphaned oilfield infrastructure, every year. It doesn’t. The federal government must make this a requirement to break the cycle of industry relying on public loans and grants ($395 million so far) to fund cleanup. If Alberta followed existing law and used credible cleanup cost estimates, it would have collected $1 billion more from industry for cleanup work and jobs this year.

  2. Require independent oversight of federal loans. Alberta’s industry-run Orphan Well Association is not transparent enough and Bill 12 makes it even more problematic.  A transparent, accountable entity must oversee how federal loans are spent, to protect the public interest. It must make cleanup records public and prioritize wells with health and safety concerns.

  3. Require industry to pay back money owed to municipalities and landowners. Target federal loans to orphan wells with unpaid rural taxes or landowner compensation, and include those debts as part of the cleanup cost. This ensures industry pays back what it owes to Alberta municipalities and farmers. Loans should also ensure landowners are properly notified and compensated at all sites cleaned up with federal funding.

  4. Require a short, 3-year timeline for repayment to minimize interest costs and default risk. It would be collectively repaid by remaining Alberta oil and gas producers. The loan must not be written-off and a strong legal mechanism to ensure the industry actually repays this loan is needed, perhaps a dedicated production tax. Any write-off scenario would transform the loan into an unacceptable industry subsidy that undermines Canada’s Polluter Pays Principle.

  5. Match loan with $30 million direct investment in indigenous entrepreneurship to train and launch Indigenous-and Métis-owned reclamation companies and advance UNDRIP principles.

  6. Reserve $30 million for landowners to reclaim wells on their own land and send the bill to the well’s owner(s), when producers refuse to clean up the land. The Supreme Court has set precedent for this with Smith v Alliance Pipeline. A federal fund would spark cleanup without landowners being out of pocket for any expenses—just as it should be.

Press Release: Strong conditions necessary on any federal oilfield cleanup loans after Alberta passes troubling Bill 12 

New Alberta law passed under the cover of pandemic politicizes wellsite cleanup, tramples landowner rights and still risks leaving taxpayers to foot the bill 

FOR IMMEDIATE RELEASE

 

MEDIA CONTACT:

Regan Boychuk, Alberta Liabilities Disclosure Project

reganboychuk@gmail.com : 403-479-8637
 

April 8, 2020 (CALGARY, AB) — Public dollars must not go to Alberta’s Orphan Well Association (OWA) without strict conditions that uphold Canada’s Polluter Pays Principle, ensuring industry pays for cleanup, property taxes and landowner compensation, the Alberta Liabilities Disclosure Project (ALDP) said this morning.

ALDP raised the alarm after Alberta’s government rammed through troubling changes to the oversight and management of the OWA with Bill 12,The Liabilities Management Statutes Amendment Act under cover of the COVID-19 pandemic. The new law: 

  • Threatens landowner rights: Bill 12 broadens the list of activities companies can carry out on private property without compensation to or consent from the landowner. 

  • Politicizes cleanup: Bill 12 gives Cabinet the power to direct OWA’s work and funding. Instead of science and data guiding cleanup, such as prioritizing the most dangerous wells or those near aquifers, cleanup decisions are now in the hands of politicians. This gave Cabinet unprecedented powers and public dollars to win favours and shun opponents.   

  • Undermines compensation for landowners: The new law allows the OWA to take over assets of bankrupt companies, continue operating their wells, and then conduct cleanup without having to negotiate with and properly compensate landowners. 

  • Incentivizes offloading of wells to the OWA: loopholes in the new law will effectively transfer landowner compensation to taxpayers, and unpaid property taxes will get written off in bankruptcy.


“This should be a moment to spur massive job creation in Alberta by requiring polluters to pay for cleanup of hundreds of thousands of their oil and gas wells. Instead, the government’s changes to the OWA will politicize well cleanup and could leave the rest of us paying the industry’s cleanup bill,” said Regan Boychuk, ALDP co-founder and lead researcher.

Without conditions, loan becomes a slush fund

As the federal government contemplates loans to OWA to create jobs in Alberta and respond to the COVID-19 pandemic and oil price collapse, ALDP calls on the federal government to attach strict conditions to ensure that polluters, not taxpayers, pay for the cleanup. Conditions such as requiring the OWA to follow existing law and collect enough from industry for its full inventory every year, require loans be short-term, and matched by support for First Nations and landowners.

“Which wells get prioritized for cleanup should be determined by independent evaluations and public health requirements, not by partisan politics. Having Cabinet drive decisions on well cleanup means the OWA could become a slush fund for the government to reward their friends and punish vocal opponents. We can’t let that happen."
— David Swann, ALDP member and former member of Alberta’s Legislative Assembly

“If the federal government lends public funds to the OWA, with its new powers, they will tacitly weaken regulatory oversight in Alberta, and undermine Canada’s Polluter Pays Principle. The government must attach conditions to any funding to counter Bill 12’s disappointing measures.” — Regan Boychuk, ALDP co-founder

"These changes are a disaster for farmers and landowners with oil and gas leases. They give the Orphan Well Association the right to operate the still-profitable wells on our lands, without paying annual compensation to us.  Anyone with an existing well, facility, or pipeline on their property should be very concerned by these changes."
— Dwight Popowich, landowner with orphan well on his land near Two Hills, Alberta


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Proposed Conditions for federal loan to Alberta’s Orphan Well Association

  1. Require that the Orphan Well Association collect the legally-mandated, annual orphan levy to fully fund cleanup of OWA’s entire inventory every year. By law, OWA should be collecting enough levies from industry to cover the full cost to clean up its full inventory of wells for the year — every year. It doesn’t. That could very well have meant $1 billion more for cleanup work this year alone. Allowing the OWA to collect any less than what is legally mandated amounts to an oilpatch subsidy and is leading to a troubling pattern of relying on public dollars to fund industry cleanup.

  2. Any loan to the Orphan Well Association should include a short timeline for repayment. ALDP urges a three-year timeline to minimize interest costs and maximize the chance of repayment.  Any write-off scenario would transform the loan into a subsidy to industry, undermining the Polluter Pay principle, and must be avoided.  

  3. Match loan to OWA with direct investment in building Indigenous capacity. Any Federal loan to the OWA should be matched by at least $30M to fund an Indigenous steering committee focused on education and training to launch Indigenous-owned enterprises to lead cleanup work. In this way, the OWA loan can become a vehicle to advance Indigenous entrepreneurship and UNDRIP principles. 

  4. Finance landowners to reclaim wellsites on their own land. Landowners can clean up wellsites on their own land and send the bill to the oil company. The Supreme Court said so in Smith v Alliance Pipeline. A $30M federal fund could help spark cleanup without landowners being out of pocket for any expenses -- just like it’s supposed to be.

  5. Independent oversight of federal funds. Neutralize Cabinet’s grasp for control by requiring an independent body of experts and public consultations to determine how best to prioritize cleanup done with federal dollars. One focus should be orphan wells with unpaid rural taxes or landowner compensation, so those debts can be swiftly paid through the orphan levy instead of by taxpayers. The federal loan ought to also include stipulations ensuring landowners are properly notified and compensated at all sites cleaned up with federal funding.

Quick Facts

  • Alberta has ~300,000 conventional oil and gas wells, more than 400,000 kilometres of pipelines, over 1.4 trillion of litres of fluid waste held in tailings ponds, and more. As this infrastructure ages and breaks down, it can leak toxins into the surrounding air, land, and water.

  • Using Alberta Energy Regulator’s data and methodology, ALDP estimates it will cost $40-$70 billion to clean up the 300,000 unreclaimed oil and gas wells alone. That’s 2 to 3.5 times higher than the regulator has told the public.

  • Alberta has approximately $200 million held as security deposits against oil and gas cleanup, far less than 1 per cent of the total cleanup cost.

 

Press Release: Tax Strike (January 2020)

FOR IMMEDIATE RELEASE

 

MEDIA CONTACT:

Regan Boychuk, Alberta Liabilities Disclosure Project

reganboychuk@gmail.com : 403-479-8637
 

 

Oilpatch tax evasion sparks citizen tax strike

Former MLA won’t pay provincial taxes to protest Alberta government’s double standard on industry’s unpaid taxes and bailouts.
 

January 22, 2020 (CALGARY, AB) — Former Alberta MLA, Dr. David Swann, announced a personal tax strike to demand Alberta’s Premier hold oil and gas companies accountable for $173 million in unpaid rural taxes evaded without consequence.  

“I am outraged that Premier Kenney condones this tax evasion in the oilpatch, where viable companies refuse to pay what they owe for the roads they use, schools that train their workers, and services that support their operations. Who knew paying your taxes is optional in Alberta?” says Swann, a member of the Alberta Liabilities Disclosure Project (ALDP)

“I am not paying my provincial taxes until these companies pay theirs. I urge others to join me. Our government shouldn’t have one set of rules for their corporate friends, and another for the rest of us Albertans.”

According to the Rural Municipalities Association, more than $100 million (or 60 per cent) of those unpaid taxes are owed by companies that continue to operate, but simply won’t pay their taxes. 

“These companies are brazenly flouting provincial laws and cheating hardworking families who pay their taxes,” says Swann. “They have pocketed record profits, received a $4.7B tax cut, paid generous salaries to their executives, and now want Albertans to pick up their quarter trillion cleanup and tax bills.” 

Swann and other ALDP members call on Premier Kenney to protect Albertans from dine-and-dash oil and gas companies by stopping this growing tax evasion and ending their public bailouts and property tax cuts. 

“We all know the Alberta government’s first instinct is more oil patch subsidies and lower taxes. That failed strategy is unacceptable now,” adds Regan Boychuk, ALDP’s lead researcher and oilfield liability expert. 

“If these companies are operating, they can and must pay their taxes. And local governments need the power to collect unpaid taxes before companies escape into bankruptcy,” says Boychuk. 

“It’s unethical for the oilpatch to dine on the profits of our public resources, and dash on their dues to the community,” says Swann. 

“With this strike, I’m standing in solidarity with all Albertans getting the bad end of this deal.”

-30-

BACKGROUND:

  • Last July, Alberta government announced a 6-month, $20 million oilpatch property tax subsidy for ~70,000 shallow gas wells and related pipelines. In 2020, that subsidy burden was shifted to already cash-strapped rural municipalities.

  • Local officials lack authority to force asset sales on Alberta’s oil and gas industry. Unlike when citizens don’t pay their bills and their cars and/or homes can be sold, municipal authorities cannot sell wells or other properties for tax arrears. That obviously needs to change.

  • Even though so many companies cannot afford basic operating costs, the Alberta Energy Regulator refuses to use its power to wind down insolvent companies or pursue former owners for cleanup costs.

  • According to the Rural Municipalities Association, 2018-19 saw $173 million in unpaid oilpatch taxes. $81.5 million in unpaid taxes in 2018 was unprecedented, but accelerated by 114% to $91.5 million in 2019.

  • More than $100 million of that unpaid rural tax total is owed by companies still operating (i.e. not yet bloodless stones), but who refuse to pay their dues. It’s oilpatch tax evasion, condoned by the current and previous governments.

  • Unpaid taxes are leaving a hole in budgets of rural municipalities, and forcing them to cut essential services and raise taxes on their residents to pay the oilpatch’s bills. 

 

COALITION SUPPORTERS:

Alberta Wilderness Association

Climate Justice Edmonton

The Council of Canadians

David J. Cooper (Emeritus Professor of Accounting, University of Alberta)

Dr. David Swann (Retired Member of Legislative Assembly of Alberta and former Leader of the Alberta Opposition)

Emily Eaton (Associate Professor of Geography, University of Regina)

Greg Rogers (Environmental Risk and Liability Consultant, Eratosthenes - Accounting for Climate Change)

Gordon Laxer (Founding Director of the Parkland Institute)

Keepers of the Athabasca

Mark Dorin (Dorin Land and Oilfield Management Inc.)

Progress Alberta

Regan Boychuk (independent researcher, Reclaim Alberta)

Robert Ascah (Director of the University of Alberta Institute for Public Economics; Program Chair of the Economics Society of Northern Alberta)

Thomas Schneider (Associate Professor of Accounting, Ryerson University)

Vern Bretin (Alberta farmer and landowner)

For more information and a full list of endorsing organizations, visit ALDPcoalition.com

Public Letter to Alberta Minister of Energy and Alberta Energy Regulator Executives (July 2019)

Read it here.

Alberta Liabilities Disclosure Project Launches: Video & Press Release (April 2019)

"Opinion: Ask candidates how to clean up Alberta's orphaned wells" by Trevor W. Harrison and David Cooper. Edmonton Journal, April 5 2019.

 

Read the full op-ed here.

FOR IMMEDIATE RELEASE

 

MEDIA CONTACT:

Regan Boychuk, Alberta Liabilities Disclosure Project

reganboychuk@gmail.com : 403-479-8637

 

New coalition calls on party leaders for transparency on true costs of well cleanup

New data, obtained through FOIP, shows oil and gas well reclamation will cost significantly more than previously reported to the public

 

April 8, 2019 (CALGARY) — A new coalition of former regulators, researchers, and landowners impacted by aging oil and gas wells launched the Alberta Liabilities Disclosure Project (ALDP) today. The coalition released new data, obtained through FOIP requests from the Alberta Energy Regulator, that shows the cost of cleaning up Alberta’s 300,000+ unreclaimed oil and gas wells will be between $40 and 70 billion — 2 to 3.5 times higher than the $18.5 billion they have told Albertans.

 

Albertans are left wondering: who is going to pay for this, and by when? So today, the coalition is calling on all political parties to commit, if elected, to release independently verified estimates of Alberta’s real environmental liabilities as a first step towards solutions that will clean up the land while building a stronger economy.

 

“For decades, we've looked the other way as the number of aging oil and gas wells threatening farm lands and drinking water continues to grow. The Alberta Energy Regulator hasn’t come clean on how much it will actually cost to deal with this mess, but our new data raises the floor of the debate. We need the government to tell Albertans the truth, so we can make a plan to deal with this ticking time bomb,” says Regan Boychuk, lead researcher, ALDP member, and Reclaim Alberta campaigner.

 

These new estimates build a new floor under the debate of oilfield cleanup costs, and raise the bar for proposed solutions. Only about $200 million is currently being held by the province as a deposit to pay for the cleanup of hundreds of thousands of oil and gas wells — less than 0.3% of the cost to clean up those wells.

 

When Albertans are at risk of being on the hook for an oil well cleanup bill $22 to 51 billion more than the publicly reported estimates, that’s a massive problem. And if we apply this kind of increase to the cleanup costs of all industry infrastructure — including tailing ponds, mines, and pipelines — the problem becomes even more mind-boggling.

 

“Many landowners like me are impacted terribly by flawed processes that don’t serve to keep us or our land safe,” says Mark Dorin, President of Dorin Land and Oilfield Management. “All we want is to be safe on our land, and to be fairly compensated for our real and actual losses as required by the ‘polluter pays’ principle, embedded in provincial and federal law.”

 

Although the industry is legally required to clean up after itself, many companies are walking away from their responsibilities with few consequences. Meanwhile, aging oil, gas, and bitumen infrastructure is leaking methane and dangerous substances into our air and groundwater, threatening farms and communities, and leaving behind hefty cleanup bills that could be passed on to all Albertans in coming years.

 

“The oil and gas industry is legally obligated to fund the cleanup of its environmental liabilities. But the industry isn’t setting aside anywhere near enough money to do it, which means the public will be left on the hook for the costs. It’s long overdue that government responsibly assess the real costs of cleanup, make this public and ensure the industry pays for it,” says Greg Rogers, environmental risk and liability consultant.

 

For more information and a list of endorsing organizations, visit ALDPcoalition.com.

 

COALITION SUPPORTERS:

Alberta Wilderness Association

Climate Justice Edmonton

The Council of Canadians

David J. Cooper (Emeritus Professor of Accounting, University of Alberta)

Dr. David Swann (Retired Member of Legislative Assembly of Alberta and former Leader of the Alberta Opposition)

Emily Eaton (Associate Professor of Geography, University of Regina)

Greg Rogers (Environmental Risk and Liability Consultant, Eratosthenes - Accounting for Climate Change)

Gordon Laxer (Founding Director of the Parkland Institute)

Keepers of the Athabasca

Mark Dorin (Dorin Land and Oilfield Management Inc.)

Progress Alberta

Regan Boychuk (independent researcher, Reclaim Alberta)

Robert Ascah (Director of the University of Alberta Institute for Public Economics; Program Chair of the Economics Society of Northern Alberta)

Thomas Schneider (Associate Professor of Accounting, Ryerson University)

Vern Bretin (Alberta farmer and landowner)

 

BACKGROUND

 

  • For decades, regulators have watched liabilities be transferred to smaller and smaller companies without the resources to honour their cleanup obligations.

  • The enforcement of reclamation standards have been continually eroded, raising the potential of taxpayer liability for proper compensation of landowners for damaged land.

  • Regulatory programs collect only a fraction of a percent of cleanup costs as security, leaving significant risk to the public purse. At the moment, only $1.6 billion is being held as security for a cleanup publicly estimated at $58 billion — which is just 2.7% of the total cost.

  • Industry funds cleanup through current revenue, which means that, when times are tough, clean up work grinds to a halt and future clean up is left in doubt.

  • The Supreme Court’s decision in the Redwater Energy case reaffirmed that regulators have the ability to force clean up; but regulators will need to use that longstanding power to prevent the public from being left with cleanup costs.

  • Landowners like Mark Dorin and his mother have had their family’s health and safety compromised by old wells near their homes and on their land. Watch them tell their story here: https://youtu.be/cM3X9G1Zey8.

 

THE NUMBERS

Right now in Alberta, there are 300,000 conventional oil and gas wells, 400,000 kilometres of pipelines, over 1.4 trillions of litres of fluid waste held in tailings ponds, and more. As this infrastructure ages and breaks down, it can leak toxins into the surrounding air, land, and water.

 

Number of unreclaimed oil and gas wells: over 300,000

AER estimate of oil and gas well cleanup: $18.46 billion

ALDP estimate of oil and gas well cleanup: $40 to 70 billion

Amount held as security deposits against oil and gas well cleanup: ~$200 million

"Human lives depend on it": Old wells harming landowners in Didsbury

FOR IMMEDIATE RELEASE

 

MEDIA CONTACT:

Regan Boychuk, Alberta Liabilities Disclosure Project

reganboychuk@gmail.com : 403-479-8637

 

New coalition calls on party leaders for transparency on true costs of well cleanup

New data, obtained through FOIP, shows oil and gas well reclamation will cost significantly more than previously reported to the public

 

April 8, 2019 (CALGARY) — A new coalition of former regulators, researchers, and landowners impacted by aging oil and gas wells launched the Alberta Liabilities Disclosure Project (ALDP) today. The coalition released new data, obtained through FOIP requests from the Alberta Energy Regulator, that shows the cost of cleaning up Alberta’s 300,000+ unreclaimed oil and gas wells will be between $40 and 70 billion — 2 to 3.5 times higher than the $18.5 billion they have told Albertans.

 

Albertans are left wondering: who is going to pay for this, and by when? So today, the coalition is calling on all political parties to commit, if elected, to release independently verified estimates of Alberta’s real environmental liabilities as a first step towards solutions that will clean up the land while building a stronger economy.

 

“For decades, we've looked the other way as the number of aging oil and gas wells threatening farm lands and drinking water continues to grow. The Alberta Energy Regulator hasn’t come clean on how much it will actually cost to deal with this mess, but our new data raises the floor of the debate. We need the government to tell Albertans the truth, so we can make a plan to deal with this ticking time bomb,” says Regan Boychuk, lead researcher, ALDP member, and Reclaim Alberta campaigner.

 

These new estimates build a new floor under the debate of oilfield cleanup costs, and raise the bar for proposed solutions. Only about $200 million is currently being held by the province as a deposit to pay for the cleanup of hundreds of thousands of oil and gas wells — less than 0.3% of the cost to clean up those wells.

 

When Albertans are at risk of being on the hook for an oil well cleanup bill $22 to 51 billion more than the publicly reported estimates, that’s a massive problem. And if we apply this kind of increase to the cleanup costs of all industry infrastructure — including tailing ponds, mines, and pipelines — the problem becomes even more mind-boggling.

 

“Many landowners like me are impacted terribly by flawed processes that don’t serve to keep us or our land safe,” says Mark Dorin, President of Dorin Land and Oilfield Management. “All we want is to be safe on our land, and to be fairly compensated for our real and actual losses as required by the ‘polluter pays’ principle, embedded in provincial and federal law.”

 

Although the industry is legally required to clean up after itself, many companies are walking away from their responsibilities with few consequences. Meanwhile, aging oil, gas, and bitumen infrastructure is leaking methane and dangerous substances into our air and groundwater, threatening farms and communities, and leaving behind hefty cleanup bills that could be passed on to all Albertans in coming years.

 

“The oil and gas industry is legally obligated to fund the cleanup of its environmental liabilities. But the industry isn’t setting aside anywhere near enough money to do it, which means the public will be left on the hook for the costs. It’s long overdue that government responsibly assess the real costs of cleanup, make this public and ensure the industry pays for it,” says Greg Rogers, environmental risk and liability consultant.

 

For more information and a list of endorsing organizations, visit ALDPcoalition.com.

 

COALITION SUPPORTERS:

Alberta Wilderness Association

Climate Justice Edmonton

The Council of Canadians

David J. Cooper (Emeritus Professor of Accounting, University of Alberta)

Dr. David Swann (Retired Member of Legislative Assembly of Alberta and former Leader of the Alberta Opposition)

Emily Eaton (Associate Professor of Geography, University of Regina)

Greg Rogers (Environmental Risk and Liability Consultant, Eratosthenes - Accounting for Climate Change)

Gordon Laxer (Founding Director of the Parkland Institute)

Keepers of the Athabasca

Mark Dorin (Dorin Land and Oilfield Management Inc.)

Progress Alberta

Regan Boychuk (independent researcher, Reclaim Alberta)

Robert Ascah (Director of the University of Alberta Institute for Public Economics; Program Chair of the Economics Society of Northern Alberta)

Thomas Schneider (Associate Professor of Accounting, Ryerson University)

Vern Bretin (Alberta farmer and landowner)

 

BACKGROUND

 

  • For decades, regulators have watched liabilities be transferred to smaller and smaller companies without the resources to honour their cleanup obligations.

  • The enforcement of reclamation standards have been continually eroded, raising the potential of taxpayer liability for proper compensation of landowners for damaged land.

  • Regulatory programs collect only a fraction of a percent of cleanup costs as security, leaving significant risk to the public purse. At the moment, only $1.6 billion is being held as security for a cleanup publicly estimated at $58 billion — which is just 2.7% of the total cost.

  • Industry funds cleanup through current revenue, which means that, when times are tough, clean up work grinds to a halt and future clean up is left in doubt.

  • The Supreme Court’s decision in the Redwater Energy case reaffirmed that regulators have the ability to force clean up; but regulators will need to use that longstanding power to prevent the public from being left with cleanup costs.

  • Landowners like Mark Dorin and his mother have had their family’s health and safety compromised by old wells near their homes and on their land. Watch them tell their story here: https://youtu.be/cM3X9G1Zey8.

 

THE NUMBERS

Right now in Alberta, there are 300,000 conventional oil and gas wells, 400,000 kilometres of pipelines, over 1.4 trillions of litres of fluid waste held in tailings ponds, and more. As this infrastructure ages and breaks down, it can leak toxins into the surrounding air, land, and water.

 

Number of unreclaimed oil and gas wells: over 300,000

AER estimate of oil and gas well cleanup: $18.46 billion

ALDP estimate of oil and gas well cleanup: $40 to 70 billion

Amount held as security deposits against oil and gas well cleanup: ~$200 million

"Opinion: Ask candidates how to clean up Alberta's orphaned wells" by Trevor W. Harrison and David Cooper. Edmonton Journal, April 5 2019.

 

Read the full op-ed here.

"Regulator projects Alberta’s inactive well problem will double in size by 2030, documents reveal" by Sharon J Riley. The Narwhal, April 8 2019.

Read full article here.

"‘Ticking time bomb:’ Alberta group wants aging oil wells to be election issue" by Bill Graveland. Canadian Press, April 8 2019.

Read full article here.

"Experts say Alberta must address oil and gas well cleanup that could cost billions: ‘This is a ticking time bomb’" by Emma Mcintosh. The Star Calgary, April 9 2019.

Read full article here.

"Former MLA David Swann refuses to pay taxes until oil patch pays theirs" by Bob Weber. Calgary Herald, January 22,2020.

Read full article here

"Former MLA Swann won't pay taxes to protest delinquent oil and gas companies" by Ryan White. CTV News, January 22,2020.

Read full article here.

"Former Alberta MLA urges tax revolt in response to unpaid oil and gas taxes"  CBC News, January 22,2020.

Read full article here.

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