UPDATED with:

‘It’s a serious situation that’s coming’: Alberta landowners’ advocate on ‘mushrooming’ problem of abandoned oil wells by Phil Heidenreich with files from Max Hartshorn, Francesca Fionda, Mia Sheldon and Vassy Kapelos, February 14, 2016, Global News

An advocate for Alberta landowners says the glut in oil prices is leading to a growing number of smaller energy companies going under, exacerbating the issue of already ballooning numbers of abandoned oil and gas wells in the province.

On Friday, representatives for Alberta landowners met with the NDP’s rural caucus in Strathmore to discuss the issue, although no new plans are in the works just yet.

“It’s a serious situation that’s coming and I cannot see a way out of it unless we actually start making industry clean up their wells,” said Don Bester, president of the Alberta Surface Rights Group which represents landowners from across the province. “Instead of drilling new wells, maybe they should be putting some money into reclamation.”

Bester said many companies are taking care of orphan wells, but the number who can’t afford to or just don’t live up to their responsibilities is rising.

“These wells can sit there for ten years and continue to contaminate potential groundwater sources,” he said. “It just isn’t going to happen in the future, it’s been happening for the last ten years and there isn’t enough cash within the government’s holdings that they’ve collected for this stuff through the orphan well levy to even begin to clean them up.”

Since oil was first discovered in Alberta more than 100 years ago, more than 400,000 oil and gas wells have been drilled and licence status counts indicate nearly 170,000 of them are inactive.

A well is considered inactive after it hasn’t produced anything for 12 months. At that point, provincial rules require companies to either suspend or safely turn off the well and a company can choose to abandon it by taking steps to prevent any leakage. The company is then also required to restore the land impacted by the well.

According to Bester, the concern for Alberta landowners who have lease their land to oil and gas companies, is not just environmental but also financial.

“Because of the low oil prices, we have a lot of junior companies that are going bankrupt and that is leaving landowners on the hook for annual rental payments,” he said.

Currently, when a company cannot or does not pay its leasing fees to landowners, a plaintiff can take their case to the Surface Rights Board to have a hearing and if successful, will receive payment from the province. But Bester said that process needs to be amended since hiring a lawyer is too costly in many cases and that there is not a clear enough precedent for what warrants government compensation.

One such example is the case of Alberta landowner Doug Lemke. When the company that owned a well on his land went bankrupt in 2013, he was left with an abandoned well on his land no compensation for it. He applied to the board to try and recoup missed payments, but it said that money owed before the bankruptcy could not be paid because the company was in bankruptcy protection.

“We’ve got active companies that are not in bankruptcy that have stopped paying their lease obligations,” Bester said, adding that the problem is “mushrooming.”

Earlier this year, Saskatchewan Premier Brad Wall proposed an idea that would see the federal government pay for oil and gas workers, who have lost their jobs since oil prices crashed, to clean up abandoned wells.

“‘It’s corporate welfare as far as I’m concerned,” Bester said as he spoke about the plan Wall has proposed to Prime Minister Justin Trudeau. “The governments of Alberta and Saskatchewan have reaped the profits of royalties, the oil and gas companies have reaped the profits of production from those wells- why should all the taxpayers of Canada pay for a cleanup?”

Global News contacted Alberta Environment and Parks Minister Shannon Phillips but she was unavailable for comment on the weekend. [Emphasis added]

Alberta Surface Rights Group worried about large number of inactive wells by News Talk 770 (CHQR), 630 CHED, February 13, 2016

Alberta Surface Rights Group worried about large number of inactive wells

Groups representing landowners met with some NDP MLAs yesterday concerned over the province’s inactive oil and gas wells.

There’s been nearly 450,000 oil and gas wells drilled in Alberta but one third of those wells are now considered “abandoned” or “inactive” by the industry.

Don Bester, the president of the Alberta Surface Rights Group says they made a recommendation to the royalty review panel about the wells, but the request fell on deaf ears.

“I’m not sure about the production of these wells, they could be very good wells but they are lumped in with bankruptcy, their reclamation of the wells, it would not be in anybody’s public interest to abandon good wells” says Bester.

Bester says he would have liked to see the panel put a check off on these licences on every well that is active so that there is a fund set up to pay for reclamation costs and to pay the annual rents.

A well is deemed inactive, or suspended, if there has been no activity for 12 months.

Officials with the province suggested earlier this week that it was up to industry to cover the costs of remediating abandoned wells. Comments are closed. [Emphasis added]

Groups to meet over abandoned wells in Alberta by Collette Derwortz, February 11, 2016, Calgary Sun

Well, well, well.

Groups representing rural landowners will meet with some NDP government MLAs in Strathmore on Friday to discuss concerns over Alberta’s inactive oil and gas wells.

“We’ll be presenting what has gone wrong with the Surface Rights Act and the number of companies that are going into bankruptcy, the number of orphan wells that are coming on every day,” said Don Bester, president of the Alberta Surface Rights Group, which, along with Alberta Action Surface Rights, will meet with up to 11 rural MLAs.

“We will be giving them recommendations on how the government can handle it.”

None of the rural MLAs could be reached for comment through the caucus office, but Energy Minister Marg McCuaig-Boyd acknowledged earlier this week that the wells are a concern for the government.

There have been close to 450,000 oil and gas wells drilled in Alberta, about one-third of which are now considered “abandoned” or “inactive” by the industry.

A well that is no longer producing but hasn’t been properly sealed poses an environmental concern as a potential pathway for contaminants to pollute groundwater or soil.

A well is deemed inactive, or suspended, if there has been no activity for 12 months.

Bester said his group made a recommendation to the royalty review panel about the wells, but it didn’t go anywhere.

“We don’t care if you increase or decrease the royalties,” he said of their recommendation,

“But you should put a check off on these licences on every well that is active, so that there is a fund set up to pay for reclamation costs and to pay the annual rents when these companies go bankrupt instead of taking it from general revenues.

“Then it isn’t up to the taxpayers to pay it; the creator of the mess is the one that should be paying for its solution.”

Officials with the province suggested earlier this week that it was up to industry to cover the costs of remediating abandoned wells.

After discussing the inactive wells with the rural MLAs in the morning, Bester said the two groups will spend the afternoon putting together a draft proposal to merge all of the province’s surface rights groups.

“We’re looking at forming a province wide surface-rights coalition,” he said. “Instead of having a whole bunch of little surface rights groups banging our heads against the wall, we’re going to have a more effective lobby group.” [Emphasis added]

Get Out Of Town–Brad Wall!!!

Date: Sat, 13 Feb 2016 13:38:45 -0700
From: Stewart Shields <email hidden; JavaScript is required>
To: email hidden; JavaScript is required
CC: bill boyd <email hidden; JavaScript is required>, Calgary MountainView <email hidden; JavaScript is required>, email hidden; JavaScript is required, Celine Hervieux-Payette <email hidden; JavaScript is required>, David Swann <email hidden; JavaScript is required>, Debbie carlson <email hidden; JavaScript is required>, Doreen Mueller <email hidden; JavaScript is required>, email hidden; JavaScript is required, email hidden; JavaScript is required, goodale <email hidden; JavaScript is required>, grande prairie <email hidden; JavaScript is required>, innisfail <email hidden; JavaScript is required>, email hidden; JavaScript is required, email hidden; JavaScript is required, letters <email hidden; JavaScript is required>, Liberal Canada <email hidden; JavaScript is required>, little <email hidden; JavaScript is required>, mccallum <email hidden; JavaScript is required>, Ministerial Unit <email hidden; JavaScript is required>, email hidden; JavaScript is required, email hidden; JavaScript is required, raitt <email hidden; JavaScript is required>, sherwood <email hidden; JavaScript is required>, slave lake <email hidden; JavaScript is required>, Stephane – M.P. Dion <email hidden; JavaScript is required>, Strathmore Brooks <email hidden; JavaScript is required>, T Banks <email hidden; JavaScript is required>, whitecourt <email hidden; JavaScript is required>

Surely Brad Wall is the biggest suck and “Political Puppet” found on the western prairies!! Energy companies gained access to private property in Saskatchewan by promising to leave the same leases in as good of condition as they were- upon entry!! Now “bright-fellow”Wall would have these same land owners pay to clean-up the messes the foreign owned energy developers would dearly love to walk away from?? This also posses the danger of government inspectors approving the final clean-up by again government agents- allowing the energy giants to stop surface rights payments, to the said land owner?? This mental haemorrhage by “Puppet Wall”does have a good point—it ends completely Wall’s chances at becoming the new Tory leader!! Even the dumbest Tory supporter could not go along with the public picking up the tab for an industry still healthy enough to pay huge dividend to their stock holders, and a industry who refused to properly share the energy wealth when oil was over$100 per bbl.

Profits go up and down for every industry!. Those with proper business acumen will have the foresight to have a “rainy day fund” to carry them through tough times!! How do you think Norway is making out during these troubling times?? Is the Norwegian public being asked to carry their petro industry on their shoulders in the same manner Wall would have Canadian suffer?? Again I will point out that the petroleum resource is owned Provincially not Federally—why is Wall coming to our federal government for capital to cover what his province and Alberta should have never let happen in the first place!!

The above is simply more evidence that our Provincial petroleum energy regulators– just don’t have the balls to handle the super rich energy industry!! This leads to the conclusion that Provincial petroleum properties should be turned over from provincial to the federal government!! If provincial governments wish to continually come to federal governments for foreign energy entities for every downturn, or every energy and environmental project being considered then a simple transferee of ownership makes perfect sense!! Why should Canada go into debt to cover costs for foreign government owned oil developers like Statoil? The Norwegian owners of Statoil will not ask or expect the Canadian government for social aid—they have run their business properly- and don’t rely on Petro-Puppets like Brad Wall

Stewart Shields, Lacombe, Alberta
http://calgaryherald.com/news/local-news/ndp-says-polluters-not-taxpayers-should-clean-up-thousands-of-abandoned-wells-in-alberta

Ray Kemble talking to the Watershed Sentinel about Fracking 12 Min. by Gary McNutt, February 12, 2016, Watershed Sentinel

The water we’re taking and using in the fracking process… you gotta stop and think about this. … This is the cycle of life. It’s gone. That water’s been removed from that cycle. … That’s large amounts of water removed from the cycle of life. …

They buy the politicians.

Comments more valuable than the articles below?

Diana Daunheimer [to article immediately below]
The AER has the Licensee Liability Rating program for Alberta. At any point in time the AER can be deploying funds from the LLR to remediate well sites and in no way should these costs be the burden of taxpayers.

http://www.aer.ca/data/facilities/LLR_Report.pdf

Purpose of the LLR Program
The purpose of the Energy Resources Conservation Board (ERCB) LLR Program and licence transfer process as set out in this directive is to

• prevent the costs to suspend, abandon, remediate, and reclaim a well, facility, or pipeline in the LLR Program from being borne by the public of Alberta should a licensee become defunct, and
• minimize the risk to the Orphan Fund posed by the unfunded liability of licences in the program.

http://www.aer.ca/docum…/directives/Directive006_May2013.pdf

Tina Knott
Ms Notley..please take some action on this issue!

Donald Wiwad · Vegreville, Alberta
You should have asked the Cons to take action. They are the ones who gave the deals to the oil companies. Brad, Know- it-all Wall now wants the federal government to pay for the mess he let the oil companies create. Wait till Alberta has to clean up the mess in Fort Mac. Then you will see if the royalties were adequate. lol

‘It’s a mess’: Landowners plead for help as more than 66,500 oil wells abandoned without cleanup in Alberta by Colette Derworiz, February 11, 2106, Calgary Herald

Decades before Tony Bruder was ranching in southern Alberta, natural gas wells dotted the rolling landscape.

The series of wells — drilled in the 1950s by British American Oil, later taken over by Gulf Canada and eventually sold off to much smaller companies — tapped into a “sour” gas field that spread under at least 14 ranches in the area, including Bruder’s property near Twin Butte.

“We have two sour gas wells on our place — they were both drilled in the ’50s, and both have been inactive since the late ’50s, early ’60s,” said the third-generation rancher. “We also have several pipelines that go across our place.”

There have been close to 450,000 oil and gas wells drilled in Alberta, about one-third of which are now considered “abandoned” or “inactive” by the industry. A well that is no longer producing but hasn’t been properly sealed poses an environmental concern as a potential pathway for contaminants to pollute groundwater or soil.

A well is deemed inactive, or suspended, if there has been no activity for 12 months.

In Saskatchewan, Premier Brad Wall has asked Ottawa for $156 million to clean up old wells in that province in an economic stimulus package to address the growing number of laid off oilfield services workers.

The Alberta government said this week  it won’t make a similar request, but lawyers working with landowners across the province said it could help deal with the burgeoning environmental problem. [Are Alberta lawyers in on the set-up to steal from Canadians to ridiculously give to the oil and gas industry?]

The economic downturn in the oil and gas industry has made the issue worse for thousands of property owners like Kelly Nelson, who has about 15 wells on her family’s farm near Vulcan.

“There are six wells that a company just disappeared on us,” said Nelson, noting it means the $3,000 to $4,000 in annual rent per well also disappeared in 2012. She went to the Alberta Surface Rights Board, which resolves disputes between energy companies and landowners, and it now pays the rent.

“It’s a mess and I am not sure what the government is going to do,” she said.

Enforcing the existing rules has been challenge enough for the Alberta Energy Regulator, [The regulator is now 100 per cent the oil and gas industry. Why on earth would it want to regulate itself and reduce profits with piddly things like rights, laws, water, health, environment, food, communities and other businesses?] said Barry Robinson, a lawyer at Ecojustice in Calgary. He noted that last year the AER found 37,000 of the 80,000 “inactive” wells in the province weren’t in compliance with its own rules.

Another issue, he said, are wells that have been deemed “inactive” for decades, with no chance production will ever resume.

“Obviously, no one is coming back to those, nobody is going to reopen those,” he said. “So they should be abandoned.” [Industry likely wants to frac them, or use them to inject waste and make earthquakes. Will industry aallow these tens of thousands of wells to be cleaned up or will the companies take any money given to them and run or pay CEOs a few more million in bonuses?]

An abandoned well has the surface equipment removed and cement poured down the well bore.

Robinson said the AER’s rules don’t put timelines on abandoning a well, noting there are at least 10,000 across the province that have been inactive for more than a decade.

Another 66,500 wells have been abandoned, but the land hasn’t been reclaimed. About 17,000 have been that way for more than a decade, he said.

“It takes time to abandon and reclaim, and that’s all fine in inactive wells, but we’ve got probably between 25,000 and 30,000 wells that have been inactive for more than 10 years, just sitting there,” he said. “The longer a well sits inactive, the greater the risk that you are going to have groundwater contamination and leakage as the pipe breaks down — that sort of thing.

“The sooner these wells are properly abandoned and properly reclaimed, the better.”

… Bruder would simply like the province to enforce its abandonment policies.

In the meantime, he’ll keep collecting his annual rent on his two wells — a battle that’s becoming more of a concern as the companies suffer in the current economy. No one from the companies returned calls for comment.

Bruder said it’s more likely that they’ll pay the $3,200 to $5,000 fee for the inactive wells than clean them up.

“The reclamation companies tell me it could cost up to $1.5 million to repair,” he said. “Even the company says, ‘It’s dollars and cents. It’s cheaper to pay you your annual fees than for me to clean it up.’ “ [Emphasis added]

NDP says polluters, not taxpayers, should clean up thousands of abandoned wells in Alberta by Colette Derworiz, February 12, 2016, Calgary Herald

Alberta’s environment minister says her government is in the midst of examining concerns about abandoned oil and gas wells in the province.

On Friday, some of the surface rights groups met with seven of the 11 NDP government’s MLAs in rural caucus to present their concerns about the number of companies going into bankruptcy and the number of orphan wells.

They agreed not to speak publicly about the outcome of the meeting, [How disgusting is that? The contamination and ripoff by industry & politicians to take money from ordinary Canadians to clean house for oil and gas companies, after decades of those companies not sharing any of their mega billions in profits taken out, affects all citizens – not just a few landowners in a few groups] said Don Bester, president of the Alberta Surface Rights Group.

Environment Minister Shannon Phillips, who wasn’t at the meeting but has been examining the issue for several months, said her department has major concerns about the abandoned wells.

“My concern is the environmental liability,” she said Friday. “My concern is certainly the inconvenience to landowners and, at the end of the day, how much the provincial government could potentially be on the hook for.”

… Phillips said they’ve had a number of solutions put forward by surface rights groups, environmental organizations and groups that represent landowners and property owners.

“Those are the things we’re examining,” she said, noting the issue is also being reviewed as part of a review into the agencies, boards and commissions across the province — including the Alberta Surface Rights Board, which resolves disputes between landowners and energy companies.

Some landowners have had to go to the board to receive their annual lease payments on the inactive wells on their property. [Or be nastily turned down by the big oil controlled Board]

Phillips said the growing number of wells being left behind by the companies is a concern.

“We’re committed to the polluter pay principle here,” [How can that be true if the NDP publicly state the AER is working well, that industry likes it?] she said, noting the province is pursuing its options. “Really, what we want to do is minimize the risk to the people of Alberta.” [With Brad Wall’s horrifically evil proposition, Alberta and Saskatchwan’s (will BC copy them?) oilfield messes risk all Canadians, not just Albertans. This is a treacherous slope Brad Wall and some Alberta lawyers are shoving Canadians to the edge of.]

She suggested the previous government didn’t do enough to protect property rights of landowners.

…

Ric McIver, interim PC leader, reiterated that Alberta should jump on an idea being proposed by Saskatchewan. 

“If government is going to do any spending on things to try to keep skilled help in Alberta during this down period, a great idea would be to use the unemployed skilled help to actually do a bunch of work on the orphaned wells to reclaim the land,” he said.

Saskatchewan Premier Brad Wall has asked Ottawa for $156 million to clean up old wells in that province as part of an economic stimulus package to address the growing numbers of laid-off oilfield service workers.

Phillips said they won’t make a similar request, but they would have the conversation if the federal government offered.

“What we’re worried about is (that) we have a very robust polluter-pay principle that prevails in Alberta,” [But no regulator implements it, unless there’s a global media catastrophe happening because of harm by big oil (eg the dead waterfowl in the tarsands waste lakes)] she said. “That’s very important to us, because at the end of the day, the province is left with the environmental liability if we don’t have a good polluter pay principle. [How crazy is that logic? Alberta has its polluter-pay principal, but obviously, it’s not working!]

“We need to ensure that responsibility in oil and gas operations and others — the fact of the matter is the vast majority of producers are responsible and ensuring their environmental liabilities are covered.” [Ya! By dumping the liabilities onto Alberta landowners and taxpayers, and now, courtesy of Brad Wall, all Canadians?]

Province meets with landowners to discuss inactive wells by Colette Derworiz, February 12, 2016, Calgary Herald

Groups representing rural landowners will meet with NDP government MLAs in Strathmore on Friday to discuss concerns over Alberta’s inactive oil and gas wells.

“We’ll be presenting what has gone wrong with the Surface Rights Act and the number of companies that are going into bankruptcy, the number of orphan wells that are coming on every day,” said Don Bester, president of the Alberta Surface Rights Group, which, along with Alberta Action Surface Rights, will meet with up to 11 MLAs.

“We will be giving them recommendations on how the government can handle it.”

None of the MLAs could be reached for comment through the caucus office, but Energy Minister Marg McCuaig-Boyd acknowledged earlier this week that the wells are a concern for the government.

There have been close to 450,000 oil and gas wells drilled in Alberta, about one-third of which are now considered “abandoned” or “inactive” by the industry. A well that is no longer producing but hasn’t been properly sealed poses an environmental concern as a potential pathway for contaminants to pollute groundwater or soil.

A well is deemed inactive, or suspended, if there has been no activity for 12 months.

Bester said his group made a recommendation to the royalty review panel about the wells, but it didn’t go anywhere.

“We don’t care if you increase or decrease the royalties,” he said of their recommendation, “but you should put a check off on these licences on every well that is active, so that there is a fund set up to pay for reclamation costs and to pay the annual rents when these companies go bankrupt instead of taking it from general revenues.

“Then it isn’t up to the taxpayers to pay it; the creator of the mess is the one that should be paying for its solution.”

Officials with the province suggested earlier this week that it was up to industry to cover the costs of remediating abandoned wells. [Emphasis added]

Comments to above article:

Verna Phippen · Land owner advocate and property rights advocate at Self-Employed
Well said Diana Daunheimer. Have you contacted
Myleine Plettell
Administrative Assistant
200-5th Avenue South
Suite 1:05
T1J 4L1
Lethbridge, Alberta
Phone: 403-388-1781
Fax: 403-388-1788
E-mail the Property Rights Advocate Office email hidden; JavaScript is required

Diana Daunheimer
Hi Verna,
The Property Rights Advocate is no help. Albertans do not have property rights. The PRA, Surface Rights Board and all other related landowners associations have no influence or jurisdiction over the AER.

This is what Nathan Cooper had to say about the PRA in the assemly Thurday to the Standing Committee on Resource Management: “They were like: oh, let’s just have a Property Rights Advocate, and we’ll have them basically be able to not do anything but make recommendations. So when the office was set up, it presented some inherent challenges.”
http://www.assembly.ab.ca/…/ses…/20160211_1330_01_rs.pdf

As mentioned synergy Groups, are particularly foul and of no assistance to any affected landowner either. With CAPP as their leader, these community groups such as SPOG and CMAG, are just “buffers” and advocates for industry. Their “best management practices” and “stakeholder relations” are non-regulatory and again the have no authority (just collusion) with the AER.

There is no assistance from our municipal, provincial or federal government, or any of our elected officials thus far either. We have made contact with dozens of them, over many years now.

Earl Dreeshen refused to take our concerns on fracking to the house and has blocked all my correspondence since. MVC councillors Bruce Beattie and Al Kenmere have been “promising” to arrange meetings and read the materials I have hand delivered to them, for years now. We have called on AESRD, AHS, AH, APEGA, ASC, to name a few, to find anyone person or any organization that is responsible for ensuring that regulations are being followed so that our health and safety is being protected and the environment is being properly monitored and respected.

They all yield to the AER.

The AER, the “regulator”, that operates with a mandate that does not include the public interest or public health. The very top of the resource chain is not accountable to the public, this immunity is then linked to a host of other organizations that have no accountability either, synergy, government, industry and related agencies, boards and corporations.

The AER has some 1200 employees. They should know the rules and regulations that govern this industry better than anyone. They have a robust stakeholders and community relations department. The AER has just released a report, which they paid about $2 million dollars for, about being best-in-class, and have 9 tenets of excellence they operate by, being transparent, credible, protective, efficient, on and on. So I ask, how come they never provide factual details on the regulatory structure in Alberta or make themselves available for commenting on current issues in resource management in Alberta? How can the AER preach transparency, when their operations are so opaque?

There is no recourse for landowners (especially those without surface rights), except court. May you be blessed with a decent judge(s) and nice lawyers, deep pockets, endless zen and a long life, to see any justice at the end of this road. The other option is to sell your home to the company that ruined it and sign a gag order, so you, your children and your children’s children can never utter a word about the situation ever again and people can continue to believe that landowners have rights in Alberta.

Diana Daunheimer
The AER has the Licensee Liabilty Rating program for Alberta. At any point in time the AER can be deploying funds from the LLR to remediate well sites and in no way should these costs be the burden of taxpayers.

http://www.aer.ca/data/facilities/LLR_Report.pdf

Purpose of the LLR Program
The purpose of the Energy Resources Conservation Board (ERCB) LLR Program and licence transfer process as set out in this directive is to

• prevent the costs to suspend, abandon, remediate, and reclaim a well, facility, or pipeline in the LLR Program from being borne by the public of Alberta should a licensee become defunct, and

• minimize the risk to the Orphan Fund posed by the unfunded liability of licences in the program.

http://www.aer.ca/doc…/directives/Directive006_May2013.pdf

The NDP should make the AER do their job. The NDP should also abolish the entire [Board of Directors] of the AER and put the savings – which would amount to millions – from eliminating this bloated and ineffective board into remediation, reclamation and proper monitoring. The people of Alberta do not need to pay for Gerry Protti to take a limo service to his meetings, the people of Alberta need old, dirty well sites that are contaminating water, air and land cleaned up.

We have a “suspended” sour crude oil well just oozing and rotting near our home. There are miles of pipeline that have not been maintained in years, just corroding in the ground. There are active wells with surface casing vents and fugitive emissions. This is a mess of epic proportions and it needs immediate attention and not just from the Surface Rights Groups. There are many landowners, like us, that have no surface rights. We live on a small parcels that are surrounded by other people’s well sites. We get no surface lease payments but all the emissions, risk, traffic, noise, impacts and hazards are ours, yet, we have no standing, with any organization in the province, to protect our rights to public health and safety. We need a landowner and residents rights group and I am not talking about the vile and decrepit synergy models we have lurking in our communities, such as SPOG and CMAG. We need a rights groups that protects the public interest, not the corporate interests.

Daniel Sheridan · Beaverlodge Regional High
Thanks for posting this as Albertan’s need to know this and by doing so Notley can not say she is spending our money on it

…

Adam C. Sieracki
It’s called “privatize the profits, socialize the costs.” And this is the reality in many industries, not simply resource extraction. Take the housing-construction sector, for example. Half of the non-recyclable waste going to landfills is construction scrap, and the infrastructure supporting housing and other structures is largely paid for by tax and utility rate-payers. A portion of your electric bill covers the cost electric transmission lines to Fort MacMurray, sports stadiums, etc. Landowners also don’t have the right to refuse subsurface or pipeline, power line operations, because–in the Donald Trumpesque view of Canadian law–property rights only apply to powerful business interests, which avail themselves of state power to take the private property of others. This ‘resources belong to the Crown’ stuff would be better rephrased as ‘Canadians are stuck with cleanup and other liabilities and costs.’ We will be paying through the nose for decades to clean up the mess in places like Fort Mac, long after the resource companies and their money left. [and how many dying of cancer, asthma, other illnesses decades too soon because of the oil and gas industry’s unmitigated, not cleaned up toxic pollution, all enabled by the AER and politicians?]

Grant Slezak · Calgary, Alberta
Every year or every couple of years, the land departments of an oil & gas producers will review their surface land agreements and will negotiate with their landowners, surface rights payments, I imagine with $30.00 oil and mass layoffs, there is not a land department in any oil company that is not trying to reduce surface rights payments. I find it odd that stories like these did not appear when wheat was selling for $2.00/ bushell or when the BSE crisis was driving the cattle business into the ground. Oil & gas producers have been getting away with “not” cleaning up these abandoned or inactive wells for decades, because the majority of landowners did not complain because they depended on the surface rights payments as part of their income. The Government of Alberta, past & present, and its agencies have not only dropped the ball on this issue, but more than likely lost the ball altogether.

Gordon Gilbertson · Calgary, Alberta
I can understand that a couple of years ago companies would focus on drilling new wells. The real revenue means more than clearing liabilities.

But today when the workers are idle, if it still does not make financial sense to do the cleanup then the system is broken and needs to be fixed immediately. [Welcome to the “No Duty of Care,” legally immune AER!]

Companies that do not properly show these liabilities on their books are not following proper accounting standards.

It makes be believe the owners of these companies are very likely to suck every dollar they can out, then go bankrupt and leave the Alberta Taxpayers to foot the bill! [Hasn’t that always been intended?]

…

David Smith · Calgary, Alberta
Shameful. Companies and corporations get to walk away from any responsibility without repercussions. Landowners shouldn’t be responsible the politicians that allow this to happen should be put in jail.

Ed Henderson · Uk
The gvt employee’s responsible are still sitting at their desks counting down the days to retirement.

Ron Christensen
Here is just another prime example of oil companies having their way with Albertans. How dare we ask questions of these corporate elites and ask them to be responsible. If we do, they take their ball and go play somewhere else. It’s time to hold them to account, but it won’t happen. Again, the tax payer will carry the day because they are foolish enough to vote for conservative governments who love to lick the boot of their corporate masters.

Jim Pratt
No….the [land]owner’s should not be responsible. You do not do a deal with an oil company allowing them to drill on your property and then also take on the company’s liability. The costs involved far exceed any cash the land owner will receive. This falls entirely on the shoulder’s of the oil company involved and the gov’t regulator’s to enforce the rules as they are written. If the land owner’s inherited any liability whatsoever you wouldn’t have any wells drilled on private lands due to the risk of a multi million dollar liability.

Mark Sandberg · Medicine Hat College
Think that the clean up should always be going to the company that currently owns the well. But if the company just doesn’t exist anymore the person responsible is the landowner – not the government. No worries while the owner gets the money from these wells then they also should be partly responsible for the wells that they allowed on their own land. Should be in the contract – enforced by the government that in the case that the company is no longer solvent (exists) than the responsibility goes to the landowner. Maybe then people will think a little more before allowing a well on their property and if they do then there is money set aside for this possibility.

Doug Bergmann · Calgary, Alberta
Problem with that argument is that the landowner only has surface rights. All underground resources are owned by the goverment
Like · Reply · 5 · 8 hrs

Debra Bryson · Grunt Worker at The Cows
Are you aware that a surface landowner has no say about wells drilled or pipelines built? Hardly fair to dump reclamation on them.
Like · Reply · 6 · 8 hrs

Troy Vader
Mark Sandberg – Google ‘Alberta Orphan Well Fund’.

In exceptional times, it’s OK to help fund the cleanup of ‘old mistakes and failed companies’ by Stephen Ewart, February 12, 2016, Calgary Herald

The NDP government may be justified in wanting industry to clean up its own messes, but there are environmental and economic reasons to address the growing number of old wells that are a testament to a century of oil and gas development in Alberta.

Given the far-reaching layoffs in the oilfield services sector in particular, it’s an opportunity to put unemployed workers across rural Alberta back to work far more quickly than the large — and certainly much-needed — infrastructure projects that have been put forward to help the province weather the historic downturn in the oilpatch.

It’s even more compelling if Ottawa’s money could be used.

Saskatchewan Premier Brad Wall publicly asked the federal government for $156 million this week to pay for a two-year Accelerated Well Cleanup Program that would “stimulate economic activity and job creation while at the same time delivering environmental benefits” by reclaiming 1,000 inactive oil and gas wells in the province.

He predicted the program could create 1,200 direct and indirect jobs.

Ottawa hasn’t yet responded to Wall’s request.

The Alberta government said it would accept the federal money but won’t make a similar request.

It has prioritized infrastructure projects and secured a commitment from Prime Minister Justin Trudeau to fast-track $700 million in funds to help the province’s economy and provide up to $250 million through a stabilization program to cushion the blow for provinces that sustain steep year-to-year declines in government revenues.

In principle, the NDP is certainly right in its contention the oil and gas industry has made billions and billions of dollars in profits, and part of the “bargain” with the province to develop its resources is that companies ensure responsible development, from exploration and operations to abandonment and reclamation.

There have been close to 450,000 oil and gas wells drilled in Alberta and about one-third of those are deemed “abandoned” or “inactive” by the industry. A well that’s no longer producing but hasn’t been properly sealed off poses an environmental concern as potential pathway for contaminants to pollute groundwater or soil.

However, these are extraordinary times. [Really? Aren’t these just usual down times in the oil and gas industry’s greed induced boom-bust cycle that repeat like clock work and are always used to make governments and citizens cowardly bow down in acquiescence and pitifully hand over more billions?] As Premier Rachel Notley undoubtedly knows after almost a year after unseating the Conservative political dynasty in Alberta, governing in a downturn can mean setting aside long-held ideals. Remember all those things Notley said about higher royalties or the breaking up the Alberta Energy Regulator.

It’s not about taxpayers bailing out Big Oil — Alberta has 796 companies licensed to produce oil and gas; the Canadian Association of Petroleum Producers, which represents the biggest companies, has about 80 members — as much as it is helping service companies and keeping experienced workers around for when commodity prices and drilling eventually recover.

The energy regulator lists 66,500 wells “abandoned”, another 76,500 “inactive” under its Licensee Liability Rating system. The Orphan Well Association has more than 700 wells without an owner financially capable of the remediation work. The regulator and well association have frameworks in place to rank wells by risk and efficiently contract out the down-hole work and well-site remediation.

Saskatchewan has an inventory of about 20,000 inactive wells.

Issues around the status of wells denoted as “inactive”, “suspended”, “abandoned”, “reclaimed”, or “orphaned” are as complex as any facing the industry. Economic and environmental obligations around wells play a crucial role in industry-landowner relations in the province that’s home to almost 80 per cent of Canada’s oil and gas activity.

Unscrupulous operators have been known to suspend wells indefinitely rather than pay to remediate and reclaim the site.

It’s not a new issue for the industry.

“Cleaning up messes left behind by old mistakes began in 1954,” wrote Gordon Jaremko in his 2013 book, Steward: 75 years of Alberta Energy Regulation. “About $2 million (or equivalent of $17 million today) was spent on the first campaign to ‘abandon’— the industry term for properly seal up — leaking wells known as orphans because they’d been deserted by their original owners.”

Table 2 from: Husky Oil’s Gas Migration Research Effort – An Update

Slide from Ernst presentations.

More details at FrackingCanada Industry’s Gas Migration

There are a number of “legacy” wells that have been inactive for decades and will never be re-completed to resume production. The regulator, which has a program that forces companies to bring wells into compliance, should determine what’s stopping them from cleaning up and the authorities should address wells that most urgently need remediation. [“Should” = AER/industry’s favourite escape-jail-for-free word?]

In the 2009 recession, Premier Ed Stelmach gave $30 million in one-time funding to clear the backlog of orphaned wells. [Where did the money go? Golf games, steak and beers?] With the current downturn, the number of orphan wells has surged and there are fears of more to come. [Many more to come is a given, not a fear. There is no one minding the oil patch in Alberta, except to rape as much money as fast as possible, and leave the messes, toxic and explosive groundwater contamination and ravaged people behind] The well association’s annual budget doubled to $30 million in recent years and the association expects to remediate more than 100 wells this year. [Costs to clean up some of the oil and gas well messes in Alberta is in the billions. Pffffft, what’s a measily $60 million going to clean up?]

“The model is very elastic, we’re putting those folks to work,” said Brad Herald, a vice-president at CAPP and chairman of the Orphan Well Association. “It’s very scalable and, with the budget doubling, the association has shown we can handle more work.”

The decline in field costs, as much as 25 per cent from boom levels, is adding to the cost effectiveness of the cleanup.

The higher fees have also prompted complaints from industry that dozens of small companies have been forced out of the business over the steep environmental obligations. [Pass the tissues again please? Many companies are choosing to walk, disappear, or file bankruptcy to avoid paying to clean up. Or change company names or sell to a darker, smaller outfit.] In a submission to Alberta’s Royalty Review Panel last fall, CAPP even referenced the “closure liability” for industry under the well association being $512 million. [Is CAPP telling the truth or grossly understating the liability to con the NDP and Albertans into stayed tucked into their fairy tale that there’s regulation in Alberta?]

CAPP suggested industry and government develop “innovative financing mechanisms” to address future liabilities. [Translation = Dear Mummy, Please, please, we promise we’ll clean up and not run with your money. Give us a few more billion in special subsidies and a few hundred billion to clean up our dirty laundry and we”ll make sure you get re-elected.]

It’s easy to dismiss Big Oil for crying poverty after years of windfall profits, but it’s the small companies and workers that will be helped most by any government funding and it’s always been critical for the industry in Alberta to have viable companies that range from small to multi-nationals to best develop the resource. [Time to let big and small companies survive on their own. Those that fail need to fail. Those that survive will learn some vital business lessons. Tory Free Market Rules anyone? Where’d they go?]

The industry could use government help — federal or provincial — in these challenging times, but it makes no sense to aid companies to drill more wells to pump more oil and gas the world doesn’t need at rock-bottom prices. It makes far more sense to support environmental goals and retain a key sector of the workforce in an especially challenging time. [What do you think companies will do with the bailout money? Emphasis added]

Some of the comments:

Diana Daunheimer

David Zabrocki · Calgary, Alberta
Corporate welfare is still socialist meddling in the economy. I can’t wait to hear the outraged comments from the right . Let’s get rid of limited liability and hold shareholders accountable for the damage done on their behalf.

Ron Christensen
Now you are on to something. Hold the shareholders accountable. Great idea!

5 Things: Abandoned and inactive wells in Alberta by Stephen Ewart, February 12, 2016, Calgary Herald

Five things about reclamation and remediation of oil and gas wells in Alberta;

• The “Sask” ask: Saskatchewan Premier Brad Wall asked the federal government to contribute $156 million this week to fund a two-year Accelerated Well Cleanup Program that would “stimulate economic activity and job creation while at the same time delivering environmental benefits” by creating 1,200 direct and indirect jobs to reclaim 1,000 of the approximately 20,000 inactive oil and gas wells in the province.
• Names and numbers: The Alberta Energy Regulator oversees the 449,000 wells drilled in the province in the last century. As of January, the AER lists approximately 66,500 wells “abandoned”, another 76,500 “inactive”, and 104,500 “reclaimed.” As of April 2015, companies had to bring 20 per cent of “inactive, non-compliant wells” into compliance each year. They’ve brought more than 6,800 wells into what the AER calls a “safe and secure state” under the program. [Why not all? What kind of Tory Free Market is this? How would shareholders respond if 80 per cent of their purchased shares were taken away for no reason?]
• Licensee Liability Rating: The LLR is an industry-funded, AER-administered “insurance” program that constantly compares assets of 796 companies – about 80 belong to the Canadian Association of Petroleum Producers – against the projected clean-up costs of their operations. The AER requires a security deposits if the liabilities exceed the value of company. As of this month. 6, 357 companies had ratings below the critical 1.0 asset-to-liability threshold. [Why the hell would any sane jurisdiction or regulator allow such high risk garbage companies to operate in it or get permits to frac for oil/gas or mine/steam tarsands?] The LLR has more than $204 million from companies held in trust. [But, Alberta requires hundreds of billions of dollars to clean up the oil and gas industry’s horrendous existing liabilities (largely caused by regulators not enforcing their rules, not inspecting and deregulating as impacts escalate from unconventional oil and gas).  Who’s going to make the difference?  Protti?]
• Orphan Well Association: The OWA is a not-for-profit organization established in 20o2 as a collaborative effort of industry and government primarily funded by industry [Why should any tax payer money be stolen by politicians to go into industry’s dirty underware fund?] to address wells, pipelines and facilities that do not have a legally responsible, or financially able, company to deal with its abandonment and reclamation obligations. The industry levy doubled to $30 million [peanuts compared to the actual costs required to clean up, notably with  the escalating number of companies changing names to evade responsibility, or walking (declaring bankruptcy) after stripping as many millions as possible without cleaning up. And nothing, compared to the contaminated aquifers and citizen water wells that require remediation] in 2014 as the well inventory surged to the current level of 705 wells. The OWA has closed 651 wells and reclaimed 489 sites and it expects to remediate more than 100 wells this year. [Why report on and boast about nothing? Compared to the number of wells requiring reclamation, that’s nothing but an embarrassment, just how industry likes it.]
• The Well from Hell: It was called “Old Salty” and the well drilled by Peace River Oils in 1916 was the worst offender among orphan wells failures. The company didn’t find oil but the well did tap into a highly pressured aquifer that flowed enough salty water to fill an Olympic-size swimming pool daily for 87 years. After repeated attempts to plug it, the “world’s longest blowout” was finally sealed in 2003 at a total cost of almost $10 million.
  Sources: Government of Saskatchewan, Government of Alberta, AER, CAPP, OWA.

Bring back credible environmental regulation by Brian Staszenski, December 28, 2015, Edmonton Journal

A Canadian Press story published Dec. 4 indicates the Alberta government believes the province’s energy regulator is performing well and there are no plans to make major changes to the agency. Energy Minister Marg McCuaig-Boyd is quoted as saying, “It is working well. Industry likes it.”

Of course industry likes it! The creation of the Alberta Energy Regulator (AER) in 2013 was a significant transformation of the province’s environmental regulatory regime. It was something that Big Oil and Big Coal have been lobbying for more than 30 years. They had always complained about the role and power the Environment Department had over project decision-making, as well as ongoing monitoring and enforcement. They hated it because they did not have control of it as they did with the old Energy Resources Conservation Board (ERCB), then the Energy and Utilities Board (EUB) and now the AER and Alberta Utilities Commission (AUC).

Finally, in 2013, they got their wish from the previous Tory government, which essentially dismantled the Environment Department and destroyed important democratic rights. This was done even though opposition parties at the time screamed to high heaven about what a travesty this transformation was.

So for now, deregulation of environmental enforcement continues.

Alberta’s deregulation — and that which happened federally — are a big embarrassment. We want to look green, sustainable and progressive, yet the NDP gleefully has decided not to overturn bad decisions made by the previous government. Fortunately, the federal government will rebuild Fisheries and Oceans, Environment Canada and the Canadian Environmental Assessment Agency, with moves already underway. Federal scientists have been set free, thankfully.

For Alberta, I quote Donald Bur, a formidable Canadian constitutional lawyer: “If the NDP acts now, and reverses deregulation, the PCs get to wear that decision. However, if the NDP don’t act now, they will get to share it. There is only so much time that a government gets to blame the previous government, but after they are aware, and do nothing, the blame gets shared.”

We all know how powerful and threatening Big Oil and Big Coal are. They took this new government to task and laid out the bottom line as to what was going to happen: “Go too far and this place becomes a ghost town.” And with the worldwide crash in oil, gas and coal prices, this government was already on its knees.

It does not have to be this way. We have all learned that it is not bad economics to give equal standing to ecological concerns. In fact, it is bad business not to. Albertans should be outraged with these ongoing economic policies that shortchange nature and with leaders who succumb to short-term political and economic compromises.

So I say to this current government, find the strength to bring back credible regulation — even if they have to have secret backroom meetings.

There are big questions to ponder. How is the Department of Environment going to be rebuilt, so that it becomes a credible agency? It is paramount that the staff and resources transferred to the AER be replaced, along with the authority to act and enforce.

With this decision to leave the AER alone, the NDP government is saying only the energy sector matters — and not tourism, agriculture, chemical industry, transportation, urban development. None of these other sectors will face valid and credible environmental reviews, as there is no capacity in what is left of the Environment Department for this to happen. For now, Albertans and First Nations facing industrial development are on their own. And as with the AER, in Alberta, due to deregulation, there is no credible formal public test for approving and managing industrial development.

But hey, industry likes it!

[Emphasis added]

[Refer also to:

The false promise of fracking and local jobs

U.S. oil bankruptcies spike 379%

Alberta & Texas: Drilling records suggest lax enforcement of oil and gas industry

Oil bust could mean skyrocketing property taxes for ordinary residents & farms, Some Alberta municipalities hit hard as oil companies stop paying. A Devil’s Bargain: Rural environmental injustices and hydraulic fracturing on Pa’s farms

Where did Tory-Touted ‘Free Market’ Go? More theft by the oil & gas industry enabled by a politician? Premier Brad Wall begs Ottawa to make Canadians pay to clean up after billion dollar profiting oil & gas companies finish ravaging Saskatchewan

NDP Royalty Fraud? 3rd most profitable industry in the world assembles crack team to ‘quietly’ seek more subsidies, loyal media cheers. Alberta’s Big Oil Bias: Billions in subsidies & lies for oil, gas, bitumen, frac’ing; $5 million for municipal solar, $0.5 million for farm solar, $0 for home solar, $0 for the many poisoned by oil & gas, $0 for families with frac health harms, 0$ for contaminated or lost water

Alberta oil companies walk from their responsibilities; Thousands of wells sit orphaned on people’s land with trees growing out of pump jacks and no reclamation in sight

The Sakens need to prepare themselves for when AER’s “Best in Class” cruelty kicks in and takes the water deliveries away

Supreme Court of Canada rules federal Bankruptcy & Insolvency Act can trump provincial motor vehicle laws if the two are in conflict ]