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.

Canadian oil companies rely on carbon capture technology in their new net zero alliance

On June 9, five Canadian oil companies –  Canadian Natural Resources, Cenovus Energy, Imperial, MEG Energy and Suncor Energy – announced their alliance in the Oil Sands Pathways to Net Zero initiative, whose goal is to achieve net zero GHG emissions from their operations in Alberta’s oil sands by 2050 (but not including the emissions created from the oil consumption after it is extracted).  Importantly, the companies still forecast a global demand for oil, so they do not discuss reducing production, but rather they will rely on a Carbon Capture, Utilization and Storage (CCUS) trunkline running from the Fort McMurray and Cold Lake regions to a carbon sequestration hub near Cold Lake Alberta. Other means to reduce GHG’s will include existing technologies at oil sands operations, including “CCUS technology, clean hydrogen, process improvements, energy efficiency, fuel switching and electrification”, as well as  “potential emerging emissions-reducing technologies including direct air capture, next-generation recovery technologies and small modular nuclear reactors.”   

The companies are aided in developing these new technologies by the federal government, which announced a $750-million Emissions Reduction Fund in October 2020 , providing loans to promote investment in greener extractive technologies. It is hardly surprising then that the new alliance calls for “ Collaboration between industry and government” , and in case that wasn’t clear enough, the press release continues: “In addition to collaborating and investing together with industry, it is essential for governments to develop enabling policies, fiscal programs and regulations to provide certainty for this type of long-term, large-scale investment. This includes dependable access to carbon sequestration rights, emissions reduction credits and ongoing investment tax credits. We look forward to continued collaboration with both the federal and Alberta governments to create the regulatory and policy certainty and fiscal framework needed to ensure the economic viability of this initiative.”  

Professors Kathryn Harrison,  Martin Olszynski, and Patrick McCurdy offer guidance on how to read the Alliance goals, in “Why you should take oilsands giants’ net-zero pledge with a barrel of skepticism” in The National Observer (June 10). “Alberta is gambling its future on carbon capture” (The National Observer,  June 11) compiles reaction (mostly skeptical) from Environmental Defence and the Pembina Institute. The Energy Mix reacted with: “Fossils’ ‘Net-Zero’ Alliance has no Phaseout Plan, Relies on Shaky Carbon Capture Technology”, which surveys a broader range of reaction and quotes Pembina Institute’s Alberta regional director, Chris Severson-Baker, at length.  

Government policy: Thermal coal mining not consistent with Canadian climate commitments

A press release by Canada’s Minister of Environment and Climate Change on June 11 spells the end of thermal coal mining in Canada, stating that the Government considers that new thermal coal mining or expansion projects “are likely to cause unacceptable environmental effects and are not aligned with Canada’s domestic and international climate change commitments.”  The specific details of the new policy are here , and are summarized in “Feds toughen permit requirements for thermal coal mining projects” (National Observer, June 11) .  At the same time as the Minister released the thermal coal policy, he officially notified  Coalspur Mines Ltd. that the policy applies to its proposed, controversial thermal coal mine expansion at the Vista Coal Mine near Hinton, Alberta. (the company challenges the federal jurisdiction over its development).  Alberta launched its own review of coal-mining policies in March, with a report promised for November.   

The new federal policy is a welcome improvement, but it applies to thermal coal only, not metallurgical coal which is used for steel-making.  The Grassy Mountain metallurgical coal mining project is currently under federal-provincial review, with a decision due in June.  Andrew Nikoforuk describes the issues of the Grassy Mountain project in The Tyee, in “The Fate of the Canadian Rockies May Rest on This Decision” (May 31). The Narwhal has archived several in-depth article focused on coal in Canada, here.

Keystone is dead!

On June 9, TC Energy issued a press release announcing that the company, in consultation with the Alberta Government, has terminated the Keystone XL Pipeline project, although it will continue “to co-ordinate with regulators, stakeholders and Indigenous groups to meet its environmental and regulatory commitments and ensure a safe termination of and exit from the project.” The Alberta government had invested over $1 billion in the project as recently as March 2020 , and continued to defend it even after U.S. President Biden rescinded the permit in January 2021. The WCR compiled sources and reactions in January in “President Biden’s Executive Orders and Keystone XL cancellation – what impact on Canada?”    A new compilation of Alberta Government statements is here .  CBC Calgary describes Keystone XL is dead, and Albertans are on the hook for $1.3B.

Climate activists in Canada and the U.S. rejoiced at the latest news: “‘Keystone XL Is Dead!’: After 10-Year Battle, Climate Movement Victory Is Complete” , and activist Bill McKibben (and others) are hammering home a message of “never give up, activism works!”. The article from Common Dreams quotes Clayton Thomas Muller, longtime KXL opponent and currently a senior campaigns specialist at 350.org in Canada: “This victory is thanks to Indigenous land defenders who fought the Keystone XL pipeline for over a decade. Indigenous-led resistance is critical in the fight against the climate crisis and we need to follow the lead of Indigenous peoples, particularly Indigenous women, who are leading this fight across the continent and around the world. With Keystone XL cancelled, it’s time to turn our attention to the Indigenous-led resistance to the Line 3 and the Trans Mountain tar sands pipelines.”     The National Observer expands on this with “Keystone XL is dead, but the fight over Canadian oil rages on” (June 10).  The Indigenous Environmental Network news chronicles the ongoing resistance to pipeline development, as well as the reaction to the Keystone announcement.

Here is a closer look at the TC Energy press release which stated, in part:

“after a comprehensive review of its options, and in consultation with its partner, the Government of Alberta, it has terminated the Keystone XL Pipeline Project. …. We remain grateful to the many organizations that supported the Project and would have shared in its benefits, including our partners, the Government of Alberta and Natural Law Energy, our customers, pipeline building trade unions, local communities, Indigenous groups, elected officials, landowners, the Government of Canada, contractors and suppliers, industry associations and our employees.   

Through the process, we developed meaningful Indigenous equity opportunities and a first-of-its-kind, industry leading plan to operate the pipeline with net-zero emissions throughout its lifecycle. We will continue to identify opportunities to apply this level of ingenuity across our business going forward, including our current evaluation of the potential to power existing U.S. assets with renewable energy. 
  
….Looking forward, there is tremendous opportunity for TC Energy in the energy transition with its irreplaceable asset footprint, financial strength and organizational capabilities positioning it to capture further significant and compelling growth. The Company will continue to build on its 70-year history of success and leverage its diverse businesses in natural gas and liquids transportation along with storage and power generation to continue to meet the growing and evolving demand for energy across the continent.”  

Alberta government backtracks, promising public consultations on coal mining policy

The province of Alberta cancelled its own long-standing regulations regarding coal mining exploration, leases and development in May 2020,  but the government was forced to reverse course – as stated in a press release in February 8, Alberta’s 1976 coal policy reinstated .  The policy was not only reinstated, but the government promises “we will implement further protections and consult with Albertans on a new, modern coal policy.” The Narwhal provides an overview of events and the political miscalculations in  “How a public uprising forced a province built on fossil fuels to reverse course on coal mining”   – quoting a political science professor at the University of Alberta who calls the public pressure “unprecedented” –  “The government simply did not imagine that this kind of mobilization could happen” .  The Canadian Parks and Wilderness Society website has monitored the issue in a series of news releases and hosts an online campaign against coal development, still expressing concern about the government’s intentions.  The article in The Narwhal implies that the current Kenny government is out of touch with the diversity of opinion in Alberta – a diversity reflected in a poll released by Pembina Institute in February, showing  Albertan attitudes to the oil and gas industry and to the goal of net-zero emissions.

In the interim before the consultation is launched, the National Observer published “There is no such thing as a contamination-free coal mine, top scientist warns Albertans” (Feb. 16)  –  summarizing a 2019 evaluation of the Benga Mining proposal for an open-pit coal mine at Grassy Mountain near the Crowsnest Pass in the Rockies, which concluded: “The Grassy Mountain Coal Project will create a ticking environmental time-bomb resulting from selenium pollution of high quality, high value aquatic habitats and culminate in poisoning of provincially and federally protected fish.”