Joe L Howse
Is this why klien and his cronies moved govt offices down to cowtown ? …to the …put the fox in with the hens ? …..smh….
Diana Daunheimer [Much better and more accurate summary of AER’s Lexin/OWA fraud than any article published in (CAPP controlled) Canadian media]
Put the blame where it belongs, with the AER, our provincial regulator, which has enabled this mess, for decades. [And teaches other jurisdictions and regulators around the world how to set in place similar fraudulent programs with which to make the citizenry pay to clean up after profit-raping multinationals]
To this day, the AER does not have any legislation, regulations or directives that mandate the timely and appropriate remediation and reclamation of well sites and facilities.
Above and beyond the some 4000 orphaned well sites, facilities and pipeline segments, there are 83,000 more inactive and unproductive well sites listed in Directive 13, some dating back to the 1960’s.
The AER permits the continual licensing and transfer of these sites, for decade upon decade, as it’s cheaper for companies to re-license, than to remediate and reclaim.
7% of all active and inactive sites in the province are leaking, and the AER does nothing about it.
Under REDA, the AER is run as a corporation, which is not an agent of the Crown. They operate with no public interest or public health mandate, owe no duty of care to the public and are not beholden to the Public Service Act.
Most importantly, the AER are legally immune from any and all of their regulatory actions or inactions. This legally immune corporation is 100% industry funded.
Where do you think our problem originates? The AER does not collect sufficient levies for orphaned sites. They have no regulations for proper reclamation. They permit the continual licensing of non-producing sites, as opposed to mandating reclamation. Their liability program is a sham, obviously ineffective.
The NDP endorsed this corrupt system, as Energy Minister Mc-Cuaig Boyd was quoted: “It’s [AER] is working well. Industry likes it.”
It’s time to abolish REDA and restructure the AER, so that is operates within the confines of the Crown, is no longer legally immune and owes the public a duty of care, otherwise, the taxpayers will pay the intentional and wilful follies of the AER that are only acting in the best interests of the industry that pays the full amount of their operating costs. Expenses which are grossly wasteful and unrelated to operations in the province.
One VP Zeeshan Syed, expensed nearly $34,000 in two months, to tour the world for “reputation meetings.” There have been hundreds of thousands of dollars for meals at the Pete Club, meetings and sponsorships with Synergy Alberta and their groups, such as the disreputable SPOG (laundered lobbyists) and millions wasted on stakeholder relations departments.
Lexin Resources bankruptcy leads to millions in rising costs for Orphan Well Association by Dan Healing, The Canadian Press, November 10, 2017, Edmonton Journal
The cost of looking after hundreds of wells, pipelines and other oilfield gear left behind by bankrupt Lexin Resources Ltd. has exceeded $2 million and the bills continue to roll in, says Alberta’s Orphan Well Association.
The association was handed responsibility for nearly 1,100 wells plus associated equipment after the Alberta Energy Regulator took the unusual step last February of shutting down all Lexin operations.
The AER accused the Calgary-based oil and gas producer of ignoring orders and regulations and forced it into receivership, claiming it owed more than $1 million in levies to the OWA and another $70 million in security for its reclamation obligations.
At the time, OWA chairman Brad Herald estimated it would cost about $1 million to administer the assets for six months until the ones with value are sold to new owners — but he said the actual costs have more than doubled as the process enters its ninth month.
“It’s taking longer than we thought,” he said Thursday.
“We’re still sitting with all that inventory and the carrying costs until the sales process is over, then we’ll have a view as to what the (final) liability might be. Not all of that Lexin property will move in the sales process so, oh yeah, it will be certainly north of that ($2 million).”
Property that isn’t sold will likely revert to the OWA, an industry-funded body assigned the task of cleaning up oil and gas wellsites for owners who can’t or won’t do so.
Executive director Lars de Pauw said OWA is spending about $100,000 every month to maintain the Lexin properties.
He said OWA had spent a total of about $1.2 million as of last month, with about two-thirds from hiring contract staff to complete well inspections, replace Lexin signs with OWA signs, talk to landowners and perform routine maintenance.
The accumulated bill will swell by an estimated $900,000 when a project is completed to purge a pipeline leading to Lexin’s closed Mazeppa sour gas plant near High River, about 60 kilometres south of Calgary, he said, and by another $150,000 to bring facilities into compliance with provincial regulations.
It will grow again when the costs are calculated for retiring and cleaning up two wells on the southeast edge of Calgary, rated a priority because the gas they produce contains poisonous hydrogen sulfide.
The OWA has a budget this year of $30 million, paid by industry through an annual levy. Herald said looking after Lexin’s assets means it will do less than expected to clean up other orphan oil and gas properties.
Grant Thornton, Lexin’s receiver, says in updates posted on its website the process to sell the assets has been held up while the Alberta Court of Queen’s Bench considers the validity of certain ownership claims by parties related to Lexin.
It notes that the court assigned Lexin into bankruptcy last month with Grant Thornton named as its trustee.
When the Alberta regulator shut down Lexin last spring, it said it didn’t know how much oil and gas it was producing because it hadn’t filed reliable reports for nine months.
Herald welcomed news Thursday that the Supreme Court of Canada has agreed to hear an appeal from the AER seeking to overturn a ruling that could allow insolvent energy companies to walk away from cleaning up abandoned oil wells.
He said OWA’s inventory of orphan wells has grown dramatically since April when the Alberta Court of Appeal backed a 2016 court ruling that proceeds from the sale of insolvent Redwater Energy Corp. would first go to creditors and not toward the cost of cleaning up the company’s operations.
He said the decision has resulted in “significant incremental costs” for OWA.
The Redwater case doesn’t directly affect the Lexin situation because it’s hoped most of Lexin’s assets will be sold to other companies and not result in cleanup costs for OWA.
[Refer also to:
2017 11 11: To Honour the Fallen on Remembrance Day: Make public AER’s secret “D79 Abandoned Well Methane Toxicity Preliminary Assessment” & Appendix 2 by Alberta Health, Admitting “Acute-Life threatening” risks & “Neurological effects”
2017 06 30: Calgary wants control over contaminated sites (1,766 known in the city!): “Oftentimes the authority is not aligned with the ability.” AER & industry set taxpayers up to be hung with $300 Billion in oilfield liabilities. Enabled by the courts? Alberta Cancer Cases Expected to Sky Rocket – How much caused by oilfield pollution? 18,600 new cancer cases expected in Alberta in 2017!
2017 04 24: AER’s $300 Billion Ponzi Scheme Closer to Fruition? Alberta Court of Appeal favours creditors over the environment, upholds Redwater decision. Did AER set this up to create horrific legal precedent to let companies hang their toxic pollution and massive damages on the public via the impotent Orphan Well Program?
2017 02 17: BNN Interviews Alberta Oil Patch Consultant Brent Nimeck on Lexin and AER’s Orphan Wells: “This problem is 30 years in the making. … I would call it a Ponzi Scheme…. This is an orchestrated fraud from multiple angles: Industry, CAPP and the Alberta Energy Regulator have enabled this to happen. … Through our independent analysis and we’ve confirmed this at multiple sources within the energy regulator, the liabilities are over $300 billion. That’s what’s on the hook for Alberta taxpayers right now – $300 billion.” ]