Group proposes clean-energy cleanup fund
Proposal asks sustainable energy firms to help cover future reclamation costs
Alberta’s property rights advocate is proposing a cleanup fund for renewable energy projects, referencing the ongoing struggle to deal with abandoned oil and gas wells scattered across the province.
“By developing a retirement fund used primarily for structure removal and land reclamation, the landowner has some assurance that they will get their land back in decent shape even if the company becomes insolvent,” said Karen Johnson during a Wednesday committee meeting.
“What if we asked sustainable energy industry firms to make small investments today that gently build toward future reclamation costs?” she said. “If we did this, a company would be faced with one less cost to worry about if or when its profits started to decline.”
Johnson, who presented her office’s annual report to the standing committee on Alberta’s economic future, noted that the long-term implications of infrastructure, including wind farms and solar fields, aren’t clear.
If renewable energy projects are abandoned, landowners could be liable for costs related to surface leases and property tax, said Daryl Bennett, director of the Action Surface Rights Association.
“There’s no Orphan Well Association to take care of renewables,” he said in an interview, referring to the organization that manages the closure of orphaned oil and gas wells. “We are concerned about wind and solar companies going bankrupt.”
But Bennett also said the risk of abandonment is not as serious as in the oil and gas industry where resources become depleted.
“Even if a (solar or wind) company goes bankrupt, it’s far more likely someone is going to come along and take it over,” he said. “With oil and gas, no one is coming along to save the day.
“It wouldn’t be hard to set up an Orphan Well Association (for renewables). If we start now, industry wouldn’t have to pay very much into it,” he said. “It’s a prudent thing to do.”
The committee has directed research services to conduct a cross-jurisdictional review and report back.
To date, no solar and wind projects have been abandoned, said the Ministry of Environment and Parks.
“There are a number of operations that are coming to the end of their operating life in the next five years,” said spokesperson Jess Sinclair in a statement. “(Alberta Environment and Parks) will be working with these to assist them with the end land use decisions.”
In 2018, the province amended legislation to require renewable energy companies to prepare conservation and reclamation plans, she said.
“Rather than assuming there will be a problem with companies going out of business and abandoning their infrastructure, AEP is considering more proactive means of ensuring renewable energy sites are reclaimed, possibly through tools like reclamation security.”
Evan Wilson, prairies regional director for the Canadian Wind Energy Association, said the industry worked with the province on recent policies and he understands landowners’ concerns.
He said landowners are positioned to dictate terms, and can say no to wind energy developers if they don’t agree with steps being taken at the end of a project’s life. Some companies use bonds with individual landowners to ensure money is set aside, or may include a line item in their annual budget.
“Typically our members are pretty eager to keep their partner landowners happy,” he said Thursday. “The approach that is taken right now is really determined on a case-by-case basis.”