Alberta's plan to manage inactive oil wells now leaves taxpayers off the hook

Jack Farrell · The Canadian Press

· Posted: Apr 04, 2025 11:11 AM EDT | Last Updated: 8 minutes ago

A caller mentation of a government-commissioned study astir Alberta's inactive lipid wells and what to bash astir them present says the state should negociate a caller security fund, alternatively than backstop it with payer funding.

The tweaked connection is 1 of a fewer changes made to the report, a draught mentation of which was leaked to media past period starring critics to pass Alberta's authorities was being pushed to fto lipid and state companies disconnected the hook for reclaiming wells, arsenic is legally required.

The report, authored by David Yager, a erstwhile oilfield services enforcement and existent Alberta Energy Regulator committee member, contains implicit 20 recommendations for dealing with the astir 80,000 inactive but not reclaimed lipid and state wells littered crossed the province.

One of those recommendations is to make a caller manufacture funded security programme to screen liabilities related to closed wells. The draught mentation said this money was to beryllium "ultimately backstopped by taxpayers."

The caller study present calls for that security programme to alternatively beryllium "managed" by the province.

Energy Minister Brian Jean's bureau didn't straight reply questions astir wherefore the wording was changed, alternatively saying successful an email that a province-managed money could beryllium akin to the government's emissions simplification fund, which collects concern c taxes from polluters.

"The study included 21 recommendations, not set-in-stone decisions by the province," Jean's bureau said.

"We are reviewing each of them and volition supply much accusation connected which recommendations we mean to instrumentality and how, successful the coming months."

Another proposal from Yager's study is to enact authorities to make companies that would instrumentality implicit inactive oregon waning lipid and state wells and usage immoderate assets extraction profits to money cleanup efforts.

Yager wrote that "with further regulatory and fiscal support" these types of companies could intercept wells earlier they're transferred to the Orphan Well Association, the industry-funded bureau that assumes work for wells erstwhile companies spell bankrupt.

Jean's bureau said on Thursday that portion nary decisions person been made, it is envisioned that the caller companies would besides beryllium manufacture funded.

What 'managed' means

Nagwan Al-Guneid, the Opposition NDP vigor critic, said Thursday that it was "hard to trust" the report's recommendations.

She said if the authorities plans to determination guardant with the security money proposal it volition request to intelligibly specify what "managed" means.

"They request to specify this precise intelligibly truthful Albertans recognize that they volition not beryllium near with a multi-billion dollar ... messiness of bankrupt lipid and state companies," she said.

Phillip Meintzer, a spokesperson for the Coalition for Responsible Energy, besides said helium wasn't convinced the report's changes mean Alberta is ruling retired the usage of nationalist funds to assistance successful the cleanup of inactive lipid and state wells.

"The connection is possibly a small spot softer, a small spot watered down, but the state inactive uses nationalist wealth to bash stuff, truthful I deliberation it inactive is proposing nationalist money," Meintzer said, referring to Alberta "managing" an security fund.

He besides questioned the viability of creating companies solely liable for extracting chartless levels of vigor from inactive wells. He pointed to Yager's report, which notes that mature and inactive wells mostly travel with operating costs that "often transcend revenue."

"There's nary warrant that it's going to beryllium profitable to run or... that it's going to make immoderate revenue," Meintzer said.

Yager, who besides serves arsenic a peculiar advisor to Premier Danielle Smith and was a one-time Wildrose Party president who played a cardinal relation successful merging Alberta's competing blimpish parties successful 2017, besides recommends that Alberta displacement its reclamation criteria from a zero-risk model to a "risk-based" framework.

He writes that doing truthful would mean biology risks could beryllium evaluated against outgo of operations and "the expected benefits to guarantee that they are deployed efficaciously and wherever they are needed astir resulting successful liable ecological outcomes."

The Alberta Energy Regulator says determination are astir 500,000 licensed lipid and state wells crossed the province, though lone astir 50,000 are active.

As a information of good licences, companies are required to cleanable up oregon reclaim the wells erstwhile they're drained oregon determined not to beryllium profitable anymore.

A study from the Alberta Energy Regulator precocious past twelvemonth said implicit $1 cardinal was spent reclaiming inactive wells successful 2023.

It said astir 4,000 inactive wells, oregon 5 per cent, of the full connected grounds were reclaimed, contempt 54 companies not gathering their yearly closure spending requirements.