Alberta’s oilfield cleanup crisis: An open question for the Alberta election
There’s something missing from our election debate — and in sheer dollars, it may be the biggest single issue that has ever faced this province. Last fall, a groundbreaking investigation revealed the Alberta Energy Regulator’s (AER) internal estimate of Alberta’s true oilfield cleanup costs: $260 billion.
Let that sink in—$260 billion.
The same as Alberta’s entire provincial budget through 2025. A staggering five timeshigher than they had publicly reported up to that point.
Compare that to the $1.6 billion—or 0.6 percent of the cost—currently being held by the province as a deposit for those cleanup costs, and we have a massive ticking time bomb on our hands, a time bomb with devastating impacts on the people and communities that call Alberta home.
Who is going to pay for this cleanup? And by when?
Right now in Alberta, there are over 450,000 conventional oil and gas wells, 400,000 kilometres of pipelines, and 1.4 trillion litres (and growing) of fluid waste held in tailings ponds. And as these sites age and break down, they can leak toxins into the surrounding air, land and water—causing headaches, dizziness, respiratory problems, and other health issues for the people who live near them.
Landowner Dwight Popovich has been locked in a bureaucratic standstill with the AER for years over an inactive well on his land, chasing down annual lease payments that never came. Meanwhile, the inactive well is posing health and safety risks and lowering land values; Popovich and his wife had planned to sell their property and move to Edmonton. Now, Popovich says, they are worried about their retirement plan.
In Canada, the oil and gas industry is legally obligated to fund the cleanup of its environmental debts. But the industry isn’t setting aside anywhere near enough money to do it, and there’s no reliable public estimate of just how much this cleanup will cost.
If the issue of backlogged oil and gas liabilities is allowed to stay quiet, the problem will simply continue to grow, with no true transparency around its scale and scope.
This week, both the NDP and UCP released their election platforms, including their proposed policies to deal with Alberta’s growing inventory of orphaned and abandoned oil and gas wells. As experts on the management and accounting of environmental debt and oil and gas liabilities, we are glad that this urgent issue is being given some attention.
But how can we come up with solutions when no one knows the true size of the problem? And how will the government protect the public from the health and environmental impacts of this infrastructure, and make sure they’re not left on the hook for cleaning up the mess?
These are some of the key questions that all Albertans should be asking their candidates and party leaders in this election. Whoever forms the next government must have a clean up plan. Every party must commit to coming clean about the true size of Alberta’s oilfield cleanup crisis.
Signers: Trevor Harrison, director of Parkland Institute, professor of sociology in the faculty of arts and science at the University of Lethbridge, and associate director and research affiliate of the Prentice Institute for Global Population and Economy;, and David Cooper, member of Parkland Institute, joint editor of Accounting, Organizations and Society, a consulting editor of Critical Perspectives on Accounting, and professor emeritus in accountancy at the Alberta School of Business.
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