A new version of a report commissioned by the Government on Alberta’s inactive oil wells and what to do with them now says that the province should administer a new insurance fund, instead of setback with taxpayers funds.
The adjusted language is one of the few changes made in the report, a draft version of which the media was leaked last month that led critics to warn the Alberta government that was being pushed to let oil and gas companies out of the hook to claim Wells, as legally required.
The report, written by David Yager, former Executive of Petroleum Services and current member of the Alberta Energy Regulator Board, contains more than 20 recommendations to treat the almost 80,000 inactive oil and gas wells but not recovered throughout the province.
One of these recommendations is to create a new industry -funded insurance program to cover liabilities related to closed wells. The draft version said that this fund should be “finally the support of taxpayers.”
The new report now requires that this insurance program be “administered” by the province.
The Office of the Minister of Energy, Brian Jean, did not answer directly to the questions about why the writing was changed, instead, said in an email that a fund managed by the province could be similar to the Government’s emission reduction fund, which collects industrial taxes in the carbon of pollutions.
“The report included 21 recommendations, not decisions established in the province of the province,” said Jean’s office.
“We are reviewing them all and we will provide more information about what recommendations we intend to implement and how, in the coming months.”
Another recommendation of the Yager Report is to promulgate legislation to create companies that take over oil and diminishing gas and gas wells and use any resource extraction gain to finance cleaning efforts.
Yager wrote that “with additional regulatory and financial support”, these types of companies could intercept wells before being transferred to the orphan association of Well, the agency financed by the industry that assumes the responsibility of the wells when the companies declare bankruptcy.
Jean’s office said Thursday that although no decisions have been made, new companies will also be financed by the industry.
What does it mean “administered”?
Nagwan Al-Guneid, the NDP’s energy critic of the opposition, said Thursday that it was difficult to trust “the recommendations of the report.
She said that if the government plans to advance with the recommendation of the insurance fund, it must clearly define what it means “managed.”
“They must define this very clearly so that Albertaos understand that they will not be left a billionaire … mess of oil and gas companies bankrupt,” he said.
Phillip Meintzer, a spokesman for the coalition for responsible energy, also said he was not convinced that the changes in the report mean that Alberta rules out the use of public funds to help in cleaning oil and inactive gas wells.
“The language is perhaps a little softer, a little diluted, but the province still uses public money to do things, so I think it is still proposing public money,” said Meintzer, referring to Alberta “administer” an insurance background.
He also questioned the viability of creating companies only responsible for extracting unknown levels of energy from inactive wells. The Yager report pointed out, which points out that mature and inactive wells come largely with the operating costs that “often exceed income.”
“There is no guarantee that it is profitable to operate or … that it will generate any income,” said Meintzer.
Yager, who also serves as a special advisor to Minister Danielle Smith and was a single time president Wildrose Party who played a key role in the fusion of Alberta Competing Conservative Festivities in 2017, also recommends that Alberta change his recovery criteria of a zero risk frame to a “risk -based” frame.
He writes that doing so mean that environmental risks could be evaluated against the cost of operations and “the expected benefits to ensure that they are effectively implemented and where more are needed, resulting in responsible ecological results.”
Alberta Energy Regulator says there are almost 500,000 wells with oil and gas license throughout the province, although only about 50,000 are active.
As a condition of well licenses, companies must clean or recover wells once they are drained or determined that are no longer profitable.
A report from the Alberta Energy Regulator at the end of last year said more than $ 1 billion were spent claiming inactive wells in 2023.
He said that approximately 4,000 inactive wells, or five percent, of the total registered were recovered, although 54 companies do not meet their annual closing expense requirements.
