Danielle Smith has a big idea to clean up oil and gas wells. It's all kinds of messy
CBC
This column is an opinion from Andrew Leach, an energy and environmental economist, and professor at the University of Albrta. For more information about CBC's Opinion section, please see the FAQ.
In a July 2021 op-ed in the Calgary Herald, Danielle Smith, then a business lobbyist with the Alberta Enterprise Group, advocated for a program called R-Star. It would provide royalty credits to oil and gas companies completing cleanup activities already required of them.
While it appeared for a long time to be dead, R-Star has new life.
Smith is now Alberta premier, and continues to champion the idea. Peter Guthrie, her new energy minister, promised to make a pilot of the scheme one of his first priorities.
This should never happen.
So, what is R-Star?
It's a free lunch. Or, more properly, a lunch paid for by Albertans. It's a wealth transfer to the oil and gas industry. Instead of ensuring the polluter pays, R-Star would have us paying the polluter.
R-Star, initially proposed by oil sector advocates, would reward firms with tradable credits to be used against future well royalty obligations, with one credit issued for each dollar spent on regulator-mandated clean-up.
Companies then apply R-Star credits to future production to get discounted royalty rates. Royalties increase with oil prices so, at today's $110-per-barrel (Cdn) price, $1 million worth of required cleanup would net R-Star credits that reduce royalties by roughly $280,000. The same credits would be worth about $115,000 if oil prices dropped by half.
This raises the first of many issues with R-Star. It provides more help when less is needed.
In periods of low prices, we should worry that companies might struggle to meet reclamation obligations. R-Star does little for producers when prices are low, but offers big rewards when prices and profits are high. It's backward.
The second issue with R-Star is that it carries a massive, unnecessary cost to Albertans.
In a letter to then energy minister Sonya Savage last year, Smith (still as a lobbyist at the time) proposes giving companies $20 billion of R-Star credits. R-Star's proponents claim that "no government funds are required," to speed reclamation.
But when oil and gas companies use these credits, government royalty revenues could decline by more than $6 billion. Perhaps, in time, Smith will see R-Star's impact on government funds in a different light, now that she's premier and those funds could otherwise fund programs and balance budgets.
For the first time in 111 years, items once belonging to the late Albert Mullins were back in the hands of his family members thanks to the detective work of one Montreal historian.
The year that saw the remains of two First Nations women brought home from a Manitoba landfill and a search get underway for the remains of a third showed how far reconciliation efforts have come — and how far they still need to go, the families say
The RCMP has just released a warning stating there are dangerous, armed individuals on Big Island Cree Nation, near Meadow Lake.
A new land-use plan that Alberta’s government has for the province’s Upper Smoky region is drawing criticism from environmentalists who say they believe it lacks sufficient environmental safeguards, which poses a significant threat to the endangered southern woodland caribou.
Canadian officials made pains to show they were cracking down on illicit drug production in the country in 2025.
A year after the City of Hamilton cancelled its overnight warming bus, it is funding a new all-night warming centre for men at St. Paul’s Presbyterian Church on James Street S.
This year has, without a doubt, been a turbulent one for the Canadian auto industry. Uncertainty dominated the sector — both for auto workers hit with job changes and companies trying to manage a mix of tariffs and changing market conditions.
A woman died at a ski resort in the Canadian Rockies over the weekend, after falling into deep snow.
Two pregnant women who would otherwise be living in a cold tent. A man whose leg wound was so bad it required intravenous medication. Two young people who no longer need to couch surf to get by.
The province has added 12 kilometres of designated trails for all-terrain vehicles in western Prince Edward Island that will connect existing routes in O’Leary and Tignish.
Every year, CBC North publishes hundreds of stories online — breaking news, investigative reporting, political coverage, community features, longform storytelling, and much more.
After a wild year in Canadian politics that began with Justin Trudeau's resignation and ended with Conservative MPs crossing the floor to join Prime Minister Mark Carney's Liberal government, 2026 is shaping up to be just as action-packed.
It became a rallying cry, a cultural touchstone, a marketing strategy and — our favourite — often described in international media as "a hockey term" or "a Canadian phrase."