Alberta regulator considers reducing liability of old wells before cleanup certified
Global News
The Alberta Energy Regulator is considering allowing oil and gas companies to reduce their environmental liabilities on old well sites before the cleanup is certified complete.
The Alberta Energy Regulator is considering allowing oil and gas companies to reduce their environmental liabilities on old well sites before the cleanup is certified complete.
The regulator says the move would reward companies that remediate their old sites promptly, cutting the amount of environmental red ink on their books and making it easier for them to sell or buy old wells. It comes as Alberta tries to figure out what do with the tens of thousands of old wells that pock the provincial landscape.
But critics say the proposal weakens the ability of landowners to hold bad actors to account and depends on an audit system that many already question.
“They don’t audit,” said Daryl Bennett, a landowner with Action Surface Rights, which represents more than 1,000 landowners across the province.
“If they reduce these liabilities, they will reduce the flags for the (regulator).”
Oil and gas companies can reduce the amount of environmental liability on their books when they receive a reclamation certificate for an old well. Those certificates are normally granted after the cleanup is complete and appropriate plant cover is established.
The reduction makes transactions such as transferring a well licence easier. One factor the regulator considers before it transfers a licence is the financial health of the buyer and the likelihood of its being able to fulfil reclamation obligations.
But under the proposed reclamation liability reduction program, the regulator would immediately reduce that liability if the company says cleanup is complete, whether plants are healthy or not. That reduction would hold for five years or until a reclamation certificate is granted.