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A report from the University of Calgary reveals that taxpayers are at risk of having to fund the cleanup of many tar sands mines including effects are irreversible on the environment.
According to the report (New window)(in English) from the School of Public Policy at the University of Calgary, this cleanup would include a growing inventory of nearly 1.6 trillion liters of toxic waste.
At the heart of the study is an analysis of the Mine Financial Security Program (MFSP), a liability management program used to ensure the province's energy resources are developed responsibly.
One of the authors of the report, professor at the Faculty of Law, Martin Olszynski, says that although it is desirable for mining companies to rehabilitate their sites when ;they have ceased to be exploited, it sometimes happens that this is not the case.
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[They] find themselves in a situation of financial difficulties, sometimes even in bankruptcy, and these obligations are therefore not respected, explains Martin Olszynski.
The risk […] is that Albertans and perhaps Canadians will end up with a cleanup and reclamation bill of approximately $130 billion.A quote from Martin Olszynski, Associate Professor at the University of Calgary Faculty of Law
According to him, this is a pan-Canadian problem, even an international one. But in Alberta, the situation is serious, and that is why the authors of the report denounce the provincial program as being incapable of achieving its objectives.
The report identifies four significant deficiencies observed in the Alberta MFSP program: overestimation of assets, underestimation of liabilities, delay in remediation and reclamation of sites, and ;lack of consideration of risks linked to climate policies.
Concerns about underestimating oil sands liabilities have long existed, according to the authors.
While official estimates from the Energy Regulatory Agency (AER) put the liability for remediation and reclamation of tar sands mines at more than $46 billion. , internal AER documents from 2018 estimate the figure to be at least $130 billion. The active footprint of all oil sands mines is about 105,000 hectares, says Martin Olszynski. Of this area, only 104 hectares have been subject to certified reclamation, less than a fraction of 1% of the total.
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“There is at least a 90,000 hectare gap in reclamation and remediation,” says Martin Olszynski, associate professor at the University of Calgary's faculty of law. (Archive photo)
According to him, 7,000 to 8,000 hectares were declared as remediated without having been certified. The vast majority being land-based sanitation, easier to rehabilitate than aquatic environments.
The study also highlights the fact that it is not taken into account that the assets on which the guarantee is taken may be dissolved due to new laws in the fight against climate change and ;oil price developments.
The MFSP program requires companies to provide a basic security deposit at the start of the oil price period. exploitation of a mine, as protection against bankruptcy or cessation of operating activity.
Companies must then provide an additional amount of security as the mine approaches its final 15 years of operation, but the report's authors estimate that this is not the case. this is a measurement that needs to be changed.
No security is required until a company's assets lose value and we suddenly ask them for more money. This makes no sense.
A quote from Martin Olszynski, Associate Professor at the University of Calgary Faculty of Law
In the short term, the authors of the report recommend a correction of the calculations of the MFSP's assets, a requirement for annual security deposits from companies, as well as the establishment of a process for estimating the costs of sanitation and rehabilitation through an independent review.
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The Energy Regulatory Agency reports about $46 billion in oil sands remediation and reclamation obligations. Alberta holds less than $1 billion in collateral, or about 2% of all bonds. (File photo)
They also call for Alberta to assemble a panel of independent experts to recommend a regime that adequately incentivizes the progressive remediation and reclamation of the oil sands. This would take place with public participation, for transparency purposes.
Following the release of two Auditor General reports in 2015 and in With 2021 reporting gaps in the provincial program, Alberta began a one-year review of the MFSP in 2022. However, the results of this review are not yet known.
In an email to Radio-Canada, Teresa Broughton, spokesperson for the Alberta Energy Regulatory Agency, indicates that the MFSP is one of several programs liability management that ensures that energy companies are operated responsibly. She adds that the provincial government recently consulted sector stakeholders as well as indigenous populations with the aim of reviewing the Mine Financial Security Program. According to Teresa Broughton, the objective of these consultations is to find long-term solutions to raise funds from companies in the industry to finance the liabilities linked to the reclamation of coal and mining mines. oil sands. The AER will work diligently to implement any changes to the MFSP according to the directives provided by our government partners, she concludes.
Natasha Kumar has been a reporter on the news desk since 2018. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining The Times Hub, Natasha Kumar worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my natasha@thetimeshub.in 1-800-268-7116
