Oil well clean-up can create jobs – but not the way Alberta spent Green Recovery funding

The Big Cleanup: How enforcing the Polluter Pay principle can unlock Alberta’s next great jobs boom was released in June by the Alberta Liabilities Disclosure Project . It makes thirteen recommendations, including the creation of an independent, non-profit Reclamation Trust to wind down end-of-life companies and use their remaining revenue to fund the cleanup of their wells. The report states that implementing all its recommendations will create 10,400 jobs and generate $750 million in wages, and contribute nearly $2 billion  Alberta’s Gross Domestic Product annually for the next 25 years.  The report also includes new calculations and analysis on the growing crisis of Alberta’s oil and gas well liabilities, stating that the average projected cost of cleaning up Alberta’s over 300,000 unreclaimed oil and gas wells is $55 billion dollars, with the top 20 Alberta municipalities alone facing $34 billion in cleanup liabilities in their boundaries.  

In April 2020, the government of Canada announced its Covid-19 Economic Response Plan, including  $1.72 billion  directed toward the cleanup of inactive and abandoned oil and gas infrastructure across the western provinces. $1 billion of this funding was directed to Alberta. Dianne Saxe, the former Environmental Commissioner of Ontario, had been one of the early critics of this program, for example in “Canada’s murky bail-out deal for oil and gas will cost us all”  ( National Observer, April 21).   In early July, a further evaluation was published by Oxfam Canada, the Parkland Institute, and the Corporate Mapping Project : Not Well Spent: A review of $1-billion federal funding to clean up Alberta’s inactive oil and gas wells .  The report finds some alarming failures on many fronts – including that the program is not tracking methane emissions, so it is impossible to determine the emissions reduction impact.  Author Megan Egler also cautiously argues that the public funds were used to accomplish what industry should have been responsible for, according to a polluter pays principle.   

One of the stated goals of Alberta’s $1 Billion Site Rehabilitation Program (SRP) was to create 5,300 jobs. However, Not Well Spent states: “ If this is met, funding of $1billion will create 5,300 jobs at $188,680 per job. This is $41,800 more per job than money injected into the industry through the Orphaned Well Association to do similar work in 2018. There has been no clear explanation from the Government of Alberta why the public dollars to create one job are higher in the SRP program.” The report also notes that 23% of the total amount of funds disbursed went to only five companies out of the 363; only 10% was allocated to clean-ups on Indigenous lands.  The author makes recommendations for improvement in future funding, to ensure better accountability and transparency, which would be more consistent with a “polluter pays” objective.

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