Alberta’s premier is telling her energy minister to focus on oil well cleanup.
In Danielle Smith’s fourth mandate letter, she directed Brian Jean to explore incentives for oil companies to clean up old wells, and she wants that plan to respect the polluter pay principle.
“We have a whole bunch of abandoned wells that are sitting on people’s private property and public land, that are causing problems,” Jean told Global News in an interview.
He says the key is to find a solution and stop old oil and natural gas sites from being environmental hazards.
“We can cast blame on past actors, we can cast blame on past governments, but that is not going to get it solved.”
In Smith’s mandate letter to Jean, she asks him to start “developing a strategy to effectively incentivize reclamation of inactive legacy oil and natural gas sites, and to enable future drilling while respecting the principle of polluter pay.”
The province has previously proposed offering royalty breaks to oil companies, but did not have the polluter pay aspect embedded into the proposal. Regardless, Mount Royal University political scientist Lori Williams says it doesn’t make much sense.
“We have two very vague statements here and it isn’t at all clear how they at all go together,” Williams said.
“It’s simply a direction to the energy minister to try to do two things that up until this point seem have been seen is quite incompatible.”
Before becoming premier, Smith lobbied for an earlier version of this idea, RStar — which would grant companies royalty credits to apply against new oil production if they cleaned up their old oil wells.
The program received a lot of criticism as companies are already legally obligated to clean up their old well sites. Critics were concerned it would reward companies that break the rules, and violate the polluter-pay principle.
RStar was later referred to as the ‘Liability Management Incentive Program.’
Jean believes this program — with the addition to respect polluter-pay principle — will make everyone happy.
“We can’t do it all today, but we can do it if we start off with a good program where polluters pay, where the industry itself is responsible for this, and we work with federal government and other levels of government,” he explained.
“We’re going to make sure we can do whatever we possibly can to keep people’s quality-of-life as number one.”
He says the goal is to make polluters responsible for any negative impact on the environment they create.
“So, we continue to have the greatest water, air, and land on the planet that is environmentally friendly, sustainable, and useable, because Albertans love the outdoors.”
Jean says it’s easy to point fingers at those who have created the issue, but that doesn’t help solve anything.
Energy industry expert Mark Taylor says the situation isn’t entirely black-and-white.
“A small amount of public money makes a material difference in some situations,” explained Taylor, who worked for the Alberta Energy Regulator (AER) for many years before becoming an independent energy consultant.
Taylor says he doesn’t like the idea of incentivizing a company to clean up after themselves, but does acknowledge that it could lead to better environmental outcomes.
“Potentially, for some companies, having some amount of provincial money coming in is just what they need to get across the threshold and get their sites cleaned up.”
He says all oil and gas companies who operate in Alberta knew they had to clean up their sites, and it isn’t fair to change those rules to benefit companies who broke them.
“Sometimes — like in 2014, 2021, when prices collapsed — there might be a case to be made for that but, in general, when oil and gas prices are fairly sustainable, then the money should be there for companies to clean up their own sites,” he added.
“The details, as the minister and his staff work through policy decisions, that’s where it’s really going to get to a point of whether I totally agree with what they’re doing, or I say ‘no, that’s a little too far, too rich from the public purse.'”
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