The Alberta government’s plan for cleaning up hundreds of thousands of abandoned oil and gas wells weakens environmental protection and shifts responsibility away from the industry to the public, says Ecojustice, a law charity with an office in Calgary.
Ecojustice is calling the Mature Asset Strategy “unacceptable” for making it cheaper and easier for an oil and gas industry that has profited hugely from fossil fuels. At the same time, the strategy makes it harder, more expensive, and potentially harmful to Albertans.
In March, a leaked draft of the strategy called for creating an industry-funded Legal Asset Insurance Fund that would be “ultimately backstopped by the province.”
Under the proposal, if the industry walked on its financial obligations, Albertans could end up shouldering the cost of closing and cleaning up abandoned wells estimated to be between $33 billion and $88 billion.
That’s why the leaked report was met with widespread criticism, and the province said it heard the message.
Leaving Landowners and Municipalities High and Dry
However, Ecojustice lawyers who have examined the final version of the strategy said the language remains vague and proposals aimed at making it easier on the industry are troubling.
Instead of “backstopped by the province” the strategy now says the clean-up fund will be “managed by the province.” According to Ecojustice, without concrete details, it’s hard to tell the difference.
“Public funds are used to pay for essential services for all Albertans, like educating our children and caring for our sick. This report hides whether public funds will be used instead to pay for the clean-up of billions of dollars in environmental harms — that the industry is already legally obligated to pay for and has profited from,” said Susanne Calabrese, managing lawyer of Ecojustice’s Alberta office, in a media release.
In addition to a government-managed insurance fund for cleaning up wells, the strategy proposes cuts to environmental regulations and a risk-based clean-up policy that would exempt some wells and leave landowners on the hook for dealing with the mess.
“Failure to force the industry to pay what it owes jeopardizes the health, safety, and financial future of all Albertans. Companies must pay to clean up their own messes and our government must do more to hold them to account to pay their obligations, especially to municipalities and landowners,” Calabrese said.
Made by the Industry, for the Industry – Not Albertans
The report was made behind closed doors. Of the 96 participants sitting around the table, 64 were private sector companies and six were oil and gas trade associations. The report was led by David Yager, a well-known oil patch insider and industry consultant.
The Rural Municipalities of Alberta (RMA), whose member municipalities are being stiffed by shady oil and gas operators for $254 million in unpaid property taxes, had a seat at the table but RMA President Kara Westerlund said it didn’t make a difference.
In a statement following the release of the final version, she called the process “an industry echo chamber, with few voices challenging assumptions and critically evaluating ideas and proposals.”
“Unfortunately, what RMA has witnessed throughout the Mature Asset Strategy process and in the final report is a narrow focus on keeping companies and wells profitable at any cost to other stakeholders, with no corresponding industry accountability, or consideration of impacts on everyone else,” Westerlund said.
