Alberta auditor general seeks reforms to how province manages oilpatch liabilities

Alberta’s system for managing environmental risks from old oilpatch facilities still hasn’t spelled out how it will collect security to ensure cleanups and doesn’t do enough to check that the work gets done, the province’s auditor general said Thursday.

“We conclude that (the Alberta Energy Regulator) had liability management processes in place during the audit period, but not all those processes were well designed and effectively mitigating risks associated with closure of oil and gas infrastructure,” said Doug Wylie’s report.

Wylie acknowledged the regulator is reforming how it evaluates and ensures the cleanup of old energy sites.

However, he said that program has yet to deal with two major issues — the so-called “legacy sites” that have been abandoned and inadequate security collected to ensure the number of such sites doesn’t increase. Wylie said current programs that mandate spending on well closures may not be getting at the problem sites.

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“The program is new, so it is too early to tell if sites are being closed faster,” Wylie wrote. “Licensees have focused more on low-risk and lower-cost sites.”

Wylie said the regulator should develop and release targets to ensure the public can gauge whether enough old sites are being cleaned up.

He also pointed out that Alberta still lacks timelines for operators to remediate their sites.

The report emphasizes that, despite the regulator’s reforms, important questions remain on how Alberta collects security from energy companies.

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“We recommend that the Alberta Energy Regulator determine how much security needs to be collected, when it will be collected, and how collection will get enforced,” it says.

As well, the regulator needs to tighten up supervision of remediation programs.

About 17,000 suspended wells don’t comply with regulations. No process exists to ensure abandoned wells are living up to environmental standards. Automated approvals for reclaimed wells are rarely checked up on.

“We recommend that the Alberta Energy Regulator evaluate compliance assurance activities for suspended wells and routine abandonments,” said the report. “”(The regulator should) ensure there is evidence of review of remedial action plans.”

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In its response, the government didn’t indicate whether it would accept and adopt Wylie’s nine recommendations.

“The auditor general’s report shows that we are making significant progress addressing the cleanup of oil and gas sites,” Alberta Energy spokeswoman Gabrielle Symbalisty said in an email.

“We appreciate their review and recommendations about the new framework, and we will continue to work collaboratively with the (regulator) to improve the process.”