The Alberta government is considering passing a multi-billion oil well cleanup bill on to Alberta residents, but Albertans are fighting back.
Last Thursday, the Coalition for Responsible Energy (C4RE) hosted a virtual town hall to discuss the province’s ballooning abandoned well problem and the province’s plan to manage it. Over 160 landowners, politicians, and surface rights group representatives participated.
At the heart of the town hall discussion was the province’s Mature Assets Strategy. Released earlier this year, the strategy was developed behind closed doors with industry representatives, provincial officials, and stakeholders. It has been criticized for suggesting that oil well cleanup costs be “backstopped” by public money.
Prior to drilling wells, companies sign contracts with the province in which they commit to cleanup. This is in accordance with Alberta law, which requires companies to pay for closing and reclamation costs. The Mature Assets Strategy does not follow this “polluters pay” principle, and instead suggests companies should be left off the hook.
C4RE wants the Mature Assets Strategy dropped and the province to draft policies that require companies to uphold their contracts.
Albertans overwhelmingly support polluters pay principle
Alberta’s oil well cleanup problem is massive. Oil and gas companies have drilled over 470,000 wells in the last 100 years–that’s one well for every 10 people in the province, C4RE co-founder Philip Meintzer noted. Only a quarter have been reclaimed. Over half are considered at the end of their life–either abandoned, orphaned, or marginally producing.
Cleanup will cost at least $88 billion, according to leaked AER documentation. If Albertans are required to pay the bill, this could amount to more than $30,000 per person.
Profits from Alberta’s oil industry have largely gone to industry shareholders and executives rather than to cleanup costs. Alberta Energy Minister Brian Jean has recently talked about vastly expanding the province’s oil industry. Meanwhile, the Orphan Well Association, tasked with cleaning up oil wells, holds just one per cent of needed cleanup funds, and the province is not planning to increase cleanup levies to the needed rate any time soon.
However an overwhelming majority– 94 per cent– of Albertans support oil and gas companies paying for their cleanup costs, according to a 2023 survey by the Pembina Institute.
Health impacts of wells
Active, marginally producing, and orphaned wells pose health risks to people that live around them, said Norm Campbell of the Canadian Association of Physicians for the Environment. He noted that this is why it is essential that wells are cleaned up as soon as possible.
“One of the pollutants is benzene, which is a highly toxic substance which is linked to a variety of blood cancers. A recent study found that over half a million Albertans live within 1.5 km of an active oil or gas well. And if we include abandoned and orphan wells, the number is much higher,” he said.
He said that various other pollutants released by wells cause diseases such as “cancer, strokes, dementia, heart attacks, heart failures, an increase in birth defects and premature births and low birth rates.”
Campbell said that the adverse effects of oil wells on the health of people living near them has been under-researched, and called on the government to increase research into how it affects people.
“Why isn’t the Alberta regulator prioritizing these health issues?” he asked. “Every day the regulator lets industry dodge its cleanup obligations is another day that Albertans are going to face further harm.”
“It’s really time for the Alberta regulator to stop playing with our health and safety,” he said.
Cost to landowners, cost to taxpayers
Oil wells are costing landowners and taxpayers as well, said Dwight Popowich, an alfalfa farmer in Two Hills. He has been fighting for cleanup on the abandoned well on his land for years, as TheRockies.Life previously reported.
When oil companies take care of their wells, there’s not much work involved for landowners, he said. But all too often companies shirk their responsibilities, and landowners find themselves using their free time to fill out paperwork, deal with weed infestations on the sites, and fight at the Land and Property Rights Tribunal for surface lease compensation.
“Landowners, we’re not getting paid our full cost for our actual time. It takes a lot of time to fill out these forms, stay on top of this stuff, handle the weeds, and make sure nobody’s damaging these sites,” Popowich said.
Taxpayers, too, are burdened when governments use public money to fund cleanup.
In 2020, the Liberal government gave Alberta $1 billion for oil well cleanup. It was billed as a COVID-19 response package, meant to create jobs and stimulate the economy.
“The companies that did have budget set aside for cleanup, as soon as they heard there was government money coming in, they stopped spending their own [money] and waited for the federal money to show up. So basically all they did was replace their spending with our money,” Popowich said.
Most of the companies that benefitted from the federal handout were the biggest companies in Alberta, including CNRL and Encana.
“Public money should fund our public services like healthcare, education, infrastructure, and environmental programs, and not line the pockets of oil and gas executives,” said Meintzer.
Landowner calls on others to share their stories
Popowich said he and other landowners trusted the government to take care of them when oil companies didn’t do good on their commitments to take care of well sites. This trust has been broken.
“Many of us were under the impression that we would be looked after by the AER or by the Land and Property Rights Tribunal. Well, they haven’t done that at all,” he said.
“Matter of fact, you’ll find they’ll go out of their way to ignore your rights and many times they treat you as if you don’t exist any longer.”
Regulatory reform needed
Until now, landowners have been reluctant to share tales of how the AER and oil companies have mistreated them. Popowich reminded people that by speaking out, however, landowners can realize “that this problem is a lot bigger and is affecting a lot more people than they’re realizing.”
C4RE aims to bring landowners on board to fight for a more effective regulator in the province.
“We have pretty good laws in Alberta. There’s a remedy for everything we’ve discussed tonight. But I’ve got lots of clients. I can’t get one of those remedies, especially from the Alberta Energy Regulator. They are either captured or incompetent or both,” said panel participant Mark Dorin.
“But for all intents and purposes, for anyone but industry members, we don’t have an effective regulator,” he said.
C4RE would also like increased transparency in the AER’s actions. Right now, most decisions are made behind closed doors. They’d like to see public hearings on issues that matter to citizens, such as how Alberta should deal with its massive oil well cleanup problem.
They said that if Albertans want this to happen, they’ll need to make their voices heard on the matter.
“Our leaders don’t make decisions in our interests unless we have the people power that’s needed to actually hold them accountable,” said Meintzer. “We have to be the reason that they feel the heat.”
