CALGARY/TERRITORIES OF THE BLACKFOOT AND PEOPLES OF TREATIES 6 AND 7, HOME TO MÉTIS NATION OF ALBERTA, REGION III — Environmental law charity, Ecojustice is highly concerned about a report that suggests changing how old oil and gas wells and infrastructure, also known as “mature assets,” are safely closed and cleaned up. The report, which hides who is paying for clean-up costs, has garnered intense public scrutiny.
The Alberta government published a final version of the 52-page Mature Asset Strategy: What we heard and recommendations report yesterday, after a draft was leaked in March. In both versions, the same troubling message was clear: the report is trying to push Alberta to shift the clean-up cost and burden away from industry.
While the report is vague on how their recommendations would be funded, it clearly advocates weakening environmental protections and reducing corporate payment obligations. One proposal suggests creating a Legacy Asset Insurance Fund for liabilities tied to closed assets, originally intended to be “ultimately backstopped by the province” (leaked draft of Mature Assets Strategy, p. 59). Following mounting public pressure, the language was revised to state the fund would be “managed by the province” (Mature Asset Strategy, p. 42), though the meaning of “managed” remains unclear.
The closed-door consultations behind the report were largely made up of oil and gas companies (of the 96 participants, 64 were private sector companies and 6 were oil and gas trade associations) and led by David Yager, an oilfield industry consultant (whose website boasts “Helping oil and gas service companies achieve success”).
Ecojustice lawyers say the Mature Asset Strategy is unacceptable:
– It is eroding the polluter pays principle — The basic expectation is that those who make the mess should clean it up. However, the report recommends an “integrated package” that removes economic and environmental risks to the oil and gas industry and places them on the public instead.
– It protects industry at the public’s expense, including suggestions of:
- New types of companies used to offload liabilities, using questionable funding that may be supported by taxpayer dollars.
- Government-run insurance funds may still be “backstopped” by Alberta taxpayers, putting the financial burden on the public.
- Proposed cuts to environmental regulations and clean-up standards would make it cheaper for industry, at the expense of Albertans’ health and safety.
- Risk-based clean-up policies mean not all wells and sites will be cleaned up, leaving landowners to deal with the mess.
- Artificially raising gas prices moves money from consumers, including Albertans, directly to industry pockets.
Failing or delaying the clean-up and proper closure of oil and gas wells and infrastructure poses massive threats to the environment, economy, and local communities with the cost for inactive well clean-up in Alberta alone estimated to be between $33.3 billion to $88 billion.
Ecojustice calls on the Alberta government to go back to the drawing board and create a strategy that protects public interest over profit, and makes polluters clean-up their own mess. Recommendations that prioritize growing industry and shifting responsibility to the public are both deeply concerning, and not the solution Albertans deserve.
Susanne Calabrese, Managing Lawyer of Ecojustice’s Alberta Office says: “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 industry is already legally obligated to pay for and has profited from. Failure to force 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.
The bill for inactive well clean-up alone is anywhere from $33 to $88 billion — or could be much worse. This proposal has too many unanswered questions and is not in the best interest of Alberta. It should be soundly rejected.”
Tanya Jemec, Staff Lawyer – Finance, Ecojustice shares: “The report recognizes that the fossil fuel industry in Alberta is on shaky ground and is struggling to meet its basic financial obligations. But confusingly, the report contorts itself to make recommendations to not only keep this withering industry afloat now, but to expand and extend the life of the industry, using government intervention and resources. The report also ignores the clear need to reduce fossil fuels, instead framing climate concerns as inconveniences that scourge the oil and gas industry.”
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Ecojustice uses the power of the law to defend nature, combat climate change and fight for a healthy environment. Its strategic, public interest lawsuits and advocacy lead to precedent-setting court decisions, law and policy that deliver lasting solutions to Canada’s most urgent environmental problems. As Canada’s largest environmental law charity, Ecojustice operates offices in Vancouver, Calgary, Toronto, Ottawa and Halifax.
