Alberta's energy minister says province won't use public money to clean up abandoned wells

Alberta's energy minister says the government will not draw on the public purse to clean up abandoned oil and gas wells.

"We will not put public tax dollars into cleaning up wells," Brian Jean told reporters Tuesday.

Jean was responding to questions from reporters about a leaked draft report from a government-appointed panel that suggested public dollars may be used to help guarantee reclamation of almost 80,000 inactive wells.

The 71-page draft document dated Jan. 28, obtained by The Canadian Press, includes recommendations such as creating government-owned companies that would acquire mature wells, extract the remaining hydrocarbons and use those revenues to fund the cleanup. It suggests those companies would be backstopped by public funds.

It also recommends setting up an insurance fund financed by industry "but ultimately backstopped by the province."

Jean said he hadn't seen the report.

Alberta Premier Danielle Smith said the province is considering some of the recommendations, but didn't say which ones.

The report will be released next month, she said.

"We're quite excited about it," Smith told the legislature in question period.

The province has long debated how to deal with abandoned wells mounting across Alberta despite existing laws that require companies to clean up their own assets. The report was commissioned to investigate solutions.

The report acknowledges "increasing public concern" that taxpayers will be on the hook for industry's responsibilities. It also says "the trust has been broken" between the Alberta government, energy industry, landowners and municipalities.

The report is authored by David Yager, a former oilfield services executive and one-time Wildrose party president who played a key role in merging Alberta's competing conservative parties in 2017. He currently serves as a special adviser to Smith and sits on the board of Alberta's energy regulator.

The association representing Alberta's rural communities said on Tuesday that it felt the consultation process was heavily tilted in favour of the energy sector. Forty-four of the report's 98 participants came from exploration, production and oilfield services. Ten represented municipal governments, or rural and municipal agencies.

"This process definitely was slanted towards industry and very heavily focused with an industry lens," said Kara Westerlund, president of Rural Municipalities of Alberta and councillor for Brazeau County.