November 6, 2018 11:02 pm
Updated: November 7, 2018 8:44 am

Multibillion-dollar pricetag to clean up oilpatch ‘not an emergency’: Alberta

The Suncor oil sands facility seen from a helicopter near Fort McMurray, Alta., Tuesday, July 10, 2012. Alberta began monitoring oilsands emissions from the skies.


The looming, multibillion-dollar cost of cleaning up Alberta’s oilpatch isn’t an emergency, the governing Alberta NDP and official Opposition told the provincial legislature Tuesday.

The NDP and the United Conservative Party made the statements as they teamed up to shut down emergency debate on the issue, proposed by Liberal MLA David Swann.

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The oil industry could face an estimated $260 billion in financial liabilities, a joint investigation by National Observer, Global News, the Toronto Star and StarMetro Calgary revealed last week — a price tag Swann said could be a “silent financial tsunami.”

MORE: Cleaning up Alberta’s oilpatch could cost $260 billion, internal documents warn

“This is a huge liability for our environment, for our provincial budget, for the oil and gas industry and for future generations,” said Alberta Liberal Party leader David Khan, who doesn’t have a seat in the province’s legislature.

“It’s really concerning that the government which controls the legislative agenda is not willing to effectively address this, and the official Opposition is not… holding the government to account on a such a critical issue.”

Until now, the public has been told the liabilities have been calculated at about $58 billion, far less than Robert Wadsworth’s estimate.

Global News

Last Thursday, the Alberta Energy Regulator (AER) apologized for a “staggering” presentation, made last February by one of its highest-ranking officials, which warned the province’s energy sector about the $260-billion estimate. That calculation is more than $200 billion greater than the previous calculation made public by the regulator — $58.65 billion.

MORE: Alberta regulator apologizes for spooking public with $260-billion cleanup cost estimate

The liability estimate factors in the costs of shutting down and cleaning up oil-and-gas sites at the end of their usefulness. That includes inactive wells, pipelines and tailings ponds in the oilsands.

The details of the presentation were made public by the joint investigation Thursday. In response, the AER said the number in the presentation was based on a “worst-case scenario” of a complete industry shutdown, and using it was an “error in judgment and one we deeply regret.”

It also said the higher estimate had “not been validated by AER.” That appeared to contradict the presentation, which said the $260-billion figure was likely to be a low estimate.

On Friday, AER CEO and president Jim Ellis announced his resignation — a move the regulator said was “unrelated” to the joint investigation’s findings.

MORE: Head of Alberta Energy Regulator to step down in January

The issue was raised during question period in the House of Commons last week as federal politicians sparred over the joint investigation’s findings. However, Swann’s remarks Tuesday were the first time an MLA has raised the figure in the Alberta legislature.

Any MLA can ask to hold an emergency debate in the legislature. But before that happens, the Speaker must allow MLAs to debate whether the issue qualifies, then decides if the assembly should vote to hold the debate.

WATCH: New estimates to clean up Alberta’s oil and gas industry

Swann argued that the price of cleaning the energy sector is a pressing issue, calling it a financial and environmental crisis that could affect generations. So far, companies have only submitted about $1.6 billion in security deposits to cover the cost, he noted.

“If not now, when will we…. address this silent financial tsunami?” Swann said. “The time for denial and inaction is over.”

However, the NDP and UCP said the issue is significant but longstanding, and not acute enough for an emergency debate.

“This government has in fact addressed it which means it is not an [emergency],” said NDP MLA Richard Feehan, adding that the current government has started improving practices.

“I did not hear anything [in Swann’s remarks] that would indicate the urgency that is required,” said UCP MLA Jason Nixon.

The Speaker sided with Nixon and Feehan, deciding not to put the possibility of debate to a vote.

Khan said that, if left unaddressed, taxpayers could be left paying the $260-billion estimate — something that could triple Alberta’s debt, which is forecast to reach $71.1 billion by 2019-20.

“It’s a failure of leadership,” said Khan. “They just want to put their heads in the sand and not address the issue and kick the can down the road as other governments have done.”

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