Alberta Opposition NDP calls for public input on plan to subsidize well cleanup

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This article was published 10/01/2023 (617 days ago), so information in it may no longer be current.

EDMONTON – Alberta’s New Democrat Opposition wants public consultations on a government plan that would subsidize oil and gas companies to fulfil legal commitments to clean up old wells, a major proponent of which has been working directly in Premier Danielle Smith’s office for months.

“The fox has entered the henhouse,” said energy critic Kathleen Ganley.

Ganley said that it appears the United Conservative government has already made up its mind to bring in the RStar program, despite criticism from an array of outside experts, rural municipalities and internal government analysts.

“All indications are the government has made their decision,” Ganley said. “There should be public consultations.”

Under RStar, companies would earn valuable credits for remediating old wells even though the obligation to clean up a well is part of the licence to drill it. That credit could be sold or applied against revenue earned from new production to reduce provincial royalties.

Alberta Energy spokesman Scott Johnston confirmed RStar remains on the agenda.

“Alberta Energy has been actively working on options for a reclamation incentive pilot program,” he said in an email.

“This work will continue over the coming weeks. Once this work is completed the department will consult with key stakeholders to determine next steps.”

Proponents say RStar or something like it would encourage new drilling, help clean up Alberta’s 170,000 abandoned wells and create jobs. In a letter written by Smith when she was a business lobbyist less than a year ago, she quotes a consultant who says $20 billion in RStar credits would create 366,000 jobs and $8.5 billion in royalties.

Critics, including staff within Alberta Energy, have said RStar would subsidize work that almost all companies do anyway as a legal condition of their drilling licence. They say current high oil prices mean there’s no need for the subsidy, which could cost Alberta $5 billion in lost royalties.

They have called the program risky, opaque and a violation of the polluter-pay principle.

The proposal, however, has been pushed for years by groups including the Sustainable Alberta Energy Network, formerly led by Kris Kinnear. He now works in Smith’s Calgary office as manager of special projects.

His LinkedIn profile suggests he’s been there since October.

Smith’s spokeswoman, Rebecca Polak, refused to explain what Kinnear does or whether he would appear on the province’s Sunshine List, a database of civil servants who earned more than $136,805. In an email, she said disclosure information is posted only on June 30 and Dec. 31.

Kinnear did not respond to a telephone call.

“This feels a little bit like their decision to rescind the coal policy (that protected the Rockies from new coal development),” Ganley said. “They just sort of jumped in without any consultation with the public.”

Ganley said a program potentially involving billions of dollars in provincial revenue that affects tens of thousands of sites across the province shouldn’t be developed without public input.

“Nobody’s denying Alberta has a problem with abandoned wells, but this isn’t the solution.”

This report by The Canadian Press was first published Jan. 10, 2023.