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The environmental liability of the oil industry in Alberta would be minimized

Natasha Kumar By Natasha Kumar Jan20,2024

The environmental liability of the

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In 2022, Alberta had 85,536 inactive oil wells and 86,475 orphan wells, according to the Agency of Alberta energy regulations

The Canadian Press

A public inquiry into the actions of the Alberta Energy Regulator (AER) is called for after documents surface suggesting the agency downplayed environmental liabilities of the oil and gas industry and withheld information about these costs.

The spokesperson for the NDP opposition on energy, Nagwan Al-Guneid, said Friday that the AER had failed to do its job.

The regulator announced earlier this week that Alberta faces $33 billion in environmental liabilities linked to abandoned and inactive drilling .

The Canadian Press reported internal documents suggesting the real figure is closer to $88 billion. These documents also included a recommendation that the highest estimate should remain internal to avoid alerting investors or the public.

Documents … demonstrate that the Alberta Energy Regulatory Agency is still operating based on questionable systemic cleanup [cost] estimates imposed on future generations of Albertans, said Ms. Al-Guneid.

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She adds that although While the methods for calculating this multi-generational liability may be complex, Albertans deserve greater transparency from the regulator.

According to Martin Olszynski, a law professor at the University of Calgary, taking only the highest estimate is the agency method.

The documents also suggest the agency did not have a good handle on pipeline rehabilitation or the condition of the 59,000 pieces of energy infrastructure across the provincial landscape. This is a serious flaw, said Mr. Olszynski, who also served as one of the federal lawyers charged with the regulation.

I “I have never seen such a level of willful ignorance,” he lamented.

Mark Dorin of the Polluter Pay Federation, a group of landowners who have argued for years that environmental liabilities are understated, agrees that x27;some sort of investigation is needed and that the agency needs to be reformed.

According to him, it's time to stop talking about the scale of the problem and start doing something about it. He added that the industry should contribute much more to the fund dedicated to cleaning up wells for which no owner could be found.

Last year, the industry-wide levy was $135 million. Mark Dorin estimates that this should amount to more than a billion dollars.

By law, the cleanup is the responsibility of the ;operator, he explained.

According to him, if the agency cannot do its job, the cabinet should appoint another organization. An agency spokesperson sent questions about this issue to the provincial government.

Alberta Energy Minister Brian Jean said the issues raised have been around for a long time and promised an announcement on the matter later this year.

Our government intends to move forward with liability management and increase the forgiveness old oil and gas sites, he said in an email.

We believe we can enable future oil and gas development and all the benefits that x27;they bring everything while also ensuring that oil and gas sites are properly cleaned.

A quote from Brian Jean, Minister of Energy of Alberta

The ruling United Conservative Party has begun a review of the agency. But no details of the review, led by longtime oil executive and conservative activist David Yager, have been released, including information about its mandate and consultation plans. p>

Mr. Yager filed an interim report on his findings in November, and the government refused to release it. Her final report is expected at the end of February.

Ms Al-Guneid argued that an effective regulator is essential both for the industry and for the Albertan public.

We need clarity on the [environmental] liabilities of all energy industries in order to strengthen our reputation as a responsible entity and to ensure that we do not undermine investor confidence.

Natasha Kumar

By Natasha Kumar

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 1-800-268-7116

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