The Alberta government may well leave taxpayers to clean up the oil and gas industry’s mess.
‘I think this issue is too big and too scary for both government and industry to face.’
The main thing Jason Kenney and Rachel Notley have in common, other than their affinity for pipelines, is their joint fear of the possible $260-billion cleanup bill for the province’s aging oil and gas fields.
Neither Kenney, the United Conservative Party leader, nor NDP Premier Notley have said much on the hustings about this astounding liability, which includes tens of thousands of inactive wells, abandoned gas plants, oil sands tailing ponds and 400,000 kilometres of pipelines.
The mountainous size of the cleanup costs dwarfs the puny pile of security deposits the province has collected from industry to pay for the cleanup — $1.5 billion.
Regan Boychuk, a 41-year-old Calgary roofer, independent researcher and a driving member of the Alberta Liabilities Disclosure Project, understands why Kenney and Notley don’t want to talk about such embarrassing math.
“I think this issue is too big and too scary for both government and industry to face. It is a can of worms,” said Boychuk in a Tyee interview.
But if not corrected, the scale of the problem could affect the province’s credit rating, bankrupt hundreds of smaller oil and gas firms and leave Canadian taxpayers with the mother of all cleanup bills. MORE
Oil and gas infrastructure is seen behind a chain link fence in this undated file photo by Louie Villanueva
The number of abandoned oil wells in British Columbia almost doubled between 2007 and 2018 and funds collected from operators to cover cleanup costs for a growing number of orphaned wells are insufficient, the province’s auditor general said in a report issued on Thursday.
A major reason for that is that the industry’s regulator, the BC Oil and Gas Commission (OGC), lacks the power to compel operators to decommission and restore well sites in a timely way, said Carol Bellringer.
“We found that gaps in the provincial legislation governing the OGC meant operators weren’t required to decommission or restore their inactive well sites unless the OGC explicitly ordered them to do so because of specific safety or environmental issues,” she said.
The provincial government has created a new law that will give the regulator more coercive powers, she said in a phone interview, but the regulations that would allow it to be enforced are still being drafted. MORE
On the cusp of a major fracking boom, B.C.’s Oil and Gas Commission is already struggling to keep up with the ballooning cost of cleaning up inactive and, at times, contaminated sites that have grown by 48 per cent in the last two years
Fracking operations near Farmington. B.C. Photo: Garth Lenz / The Narwhal
Nearly 400 kilometres north of Fort St. John is a large, leaking fracking pond owned by Ranch Energy Corporation, a Calgary-based company that went into receivership last year leaving 700 gas wells in B.C. and a sea of debt.
The storage pond is filled with 113,000 cubic metres of sludge and water that may be contaminating soil and groundwater through a documented leak in its outer lining, according to the B.C. Oil and Gas Commission.
Twenty months ago, the commission issued an order to Predator Oil BC Ltd., the company that sold Ranch the wells, to empty the pond and test for contamination.
But nothing has been done. Ranch’s receiver, Ernst & Young, says it’s an expense the estate cannot afford.
The story of Ranch — pieced together by The Narwhal from a review of receivership documents and B.C. Oil and Gas Commission documents — highlights some of the mounting financial and environmental problems created by B.C.’s fracking industry. MORE