Just before COVID, co-host @RKBtoo and I held a workshop. We identified unfunded oil & gas liabilities beyond decommissioning and land cleanup costs - over $1/4 Trillion.
🧵1/n
https://1/www.cbc.ca/news/canada/calgary/aldp-workshop-1.5449180
Yesterday a guest on @RealTalkRJ referred to $300 billion in oil & gas liabilities, a figure rounded up FROM OTHER ESTIMATES of $260 billion. $40 billion’s a whack of dough so this caused some criticism.
2/n
WELLS: The reasonable estimate for decommissioning and land cleanup costs for conventional oil & gas wells and sites was pegged in April 2019 at 40-$70 Billion by ALDP. Regulator in house estimate is $62 billion as just disclosed by Auditor General. 3/n
PIPELINES, TAILINGS PONDS, OTHER: Other cleanup costs, to be covered by future profits, for which there is no “Orphan Fund Safety Net”, are estimated to be some $200 million.
4/n
Bottom lines are:
(1) the cost to decommission wells and facilities including cleanup of any contaminants & land restoration is about $70 Billion, where the industry as a whole must pay via the Orphan Fund for any well or facility that no longer has a responsible owner.
5/n
(2) For all other oil & gas liabilities - from cleanup of tailings ponds to payment of landowner compensation until sites are cleaned up to health care costs - there is no citizen safety net like the Orphan Fund.
6/n
Each candidate in the provincial election should be be well informed on these topics. If they’re not or are silent on them, alarm bells should go off because anything other than polluter pay will break the province of Alberta.
7/n
Finally, after this election, I hope all those who are unwilling to pay for the sins of industry and the sins of those corrupted by industry stop quibbling about the ESTIMATED, massive cost, agree it’s massive, and work together to ensure the polluter, not citizens, pay.
8/n
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At Armisie field yesterday in urban Edmonton. During prohibited flaring, fugitive sour gas emissions have occurred in the past.
Me: You still flaring (incinerating) gas?
Operator: Yes. The gas compressor is still being repaired.
Flaring permit?
AER Directive 060 expands on section 8.080 of the Oil & Gas Conservation Rules entitled “Burning vented gas”:
There’s no emergency (operational upset).
The allowable flaring volume stated in the Armisie No. 1 tank battery and compressor station facility Licence F-20254 is zero cubic metres of gas per day.
RECLAMATION CERTIFICATION of “specified land” is what the @AER_news can’t manage to do properly in a great number of cases as disclosed by the @AuditorGenAB. What’s going on and why is it unacceptable and potentially costly for taxpayers?
A 🧵. 1/n
The duties to conserve, reclaim, & have “specified land” certified by the Govt. of Alberta as properly reclaimed is set out in Part 6, section 137 of the Environmental Protection and Enhancement Act (EPEA). Specified land is land taken, held, or used for certain activities. 2/n
Reclamation certificates are government guarantees that the operator has met its duties as above and reclaimed the specified land. The cannot be applied for or issued until land contamination has been remediated (remediation is covered under Part 5 of the EPEA).
3/n
Thanks @BankesNigel for your @ABlawg post on matters of “entitlement” to hold a well licence, which aligns with argument I made to AER that was ignored.
Ensuring well licenses are held by entitled persons (with a property interest in the minerals) is a basic AER function. 1/n
As evidenced by your review, AER is not carrying out its basic but critical mandate to ensure well licenses are only held in compliance with S. 16 of the Oil & Gas Conservation Act. The legislated procedure in S. 16(2) of the Act is especially important in certain cases..
2/n
In an Armisie field matter I’m involved in, the minerals are freehold & the purported petroleum & natural gas lease agreement is private. There’s no way for the surface owners to determine with certainty what person should hold “legacy” well licenses (defined in AG report): 3/n
Alberta Auditor General Doug Wylie’s March 2023 report incl. Liability Management of (Non-Oil Sands) Oil and Gas Infrastructure (link) provides fodder for discussion on Alberta Energy Regulator mandate fulfilment failures.
Report Glossary provides definition of “legacy sites” and characterizes these as sites where operators “do not exist”. This IS the definition of an orphan site. Yet the report (inaccurately?) states there is no financial backstop like the Orphan Fund for legacy sites. 2/n
I submit that the only difference between a site or a well under the supervision and care of the Orphan Well Association (OWA) and a so-called legacy site or well is that the AER has not designated the legacy site / well as an “orphan” as the AER is legally entitled to do.
3/n
a) Ensure the Regulator charges a levy on industry each year to be sufficient to retire all orphans as required by law; or
b) Cabinet can name another body to do the job in accordance with law if the Regulator can’t or won’t, as also contemplated by law.
2/n
The law is Part 11 of the Oil & Gas Conservation Act. We just need to ensure it’s enforced or make the changes the law provides for when enforcement is an issue. No need to reinvent the wheel on the world’s best orphan law!
UCP Bill 1 also created Alberta Critical Infrastructure Defence Act. The law is also SAID to be a clamp down on protestors, but it clearly allows for huge fines and jail terms:
- for those entering on a well site without excuse; or,
- for oil & gas personnel going off site. 1/n
To facilitate the discussion I drew in red boundaries of a well site said to be established by a 1962 "surface lease" below:
Inside the red boundary is "essential infrastructure" of the well licensee. Outside the red boundary is the agricultural "essential infrastructure". 2/n
Section 2 of the Act entitled "Prohibition" sets out the offence, which is to ENTER UPON "essential infrastructure" without lawful right, excuse, or justification: 3/n