Alberta energy minister told to design incentives for industry to clean up oil wells
CBC
Direction from Alberta Premier Danielle Smith to her new energy minister suggests the United Conservative government hasn't given up on a controversial program that would see taxpayers backstop the cleanup of old oil and gas wells that companies are already legally required to do.
In her mandate letter to Brian Jean, Smith charges him with "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."
That language echoes the old RStar and Liability Management and Incentive Program proposals, under which companies would have received royalty breaks on production from new wells corresponding to how much money they spent cleaning up their old ones. That tax benefit would come despite site remediation being a condition of licence for every operator in the province.
It was condemned by landowners, rural municipalities, energy analysts and even experts within Alberta Energy.
Critics said it would reward companies for not obeying the terms of their licences, offer an unnecessary tax break during high oil prices and violate a key tenet of environmental legislation — the principle that polluters pay for their own cleanup.
Before the last election, the government had planned a $100-million pilot project on the idea. After the outcry, the pilot was shelved.
Now, after the vote, it's back.
"The UCP didn't want to talk about the program during the election but it looks to me like they're still going to do it," said Kathleen Ganley, New Democrat Opposition energy critic.
Ganley puts little stock in the clause about respecting polluter pay. The whole idea violates polluter pay, she said.
"It seems self-contradictory," she said. "The whole program is designed to have government pay to clean up [old] sites.
"It makes no sense. It seems [like] a communications exercise."
Martin Olszynski, a University of Calgary resource law professor and RStar critic, called the wording in Jean's letter "clever marketing."
"They realize this is a marketing problem," he said. "They have to sell this to Albertans."
There's no way an RStar-type program could respect polluter pay, Olszynski said.