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Cleaning up Alberta's oil wells could cost three times more than expected

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Internal Alberta Energy Regulator documents from 2018 estimate the total cost of the cleanup would be $88 billion.


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Internal documents from the Alberta Energy Regulator (AER) suggest the cost of cleaning up Alberta's oil wells could be almost three times higher than expected.

This week, the AER tabled a report that argued cleaning up the province's roughly 466,000 oil wells would cost $33.3 billion. To arrive at this sum, the Regulator bases itself on estimates from 2015, contained in a document entitled Directive 11.

However, internal documents of the 'AER dating from 2018, but never published, estimates that the total cost of the cleanup would be more like $88 billion, almost three times more than the sum announced this week.

These more recent documents were obtained by University of Calgary researcher Drew Yewchuk through a freedom of information request and were provided to The Canadian Press. They propose an updated version of the well closure financial burden assessment model.

In 2018, the AER also alleged that, in its Directive 11, it had significantly underestimated the cost of well cleanings in several regions of the province and that the data on the geographic distribution of wells was imprecise, which would have harmed accuracy of its cost estimate.

Drew Yewchuk says it's important that the Alberta Energy Regulator be transparent with the public about the costs associated with cleaning up oil wells: There is internal evidence that indicates costs are increasing. And [the AER] knew they were increasing.

In writing, a spokesperson for the Alberta Energy Regulator explains that the organization excluded 2018 data in its recent assessment of the cost of well cleaning because they relied on limited data and used many assumptions, resulting in a hypothetical scenario.

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He nevertheless confirms that the AER is currently developing a new methodology to obtain a more precise portrait of the financial burden of cleaning wells in the province.< /p>

With information from The Canadian Press

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