Oil price hike won't raise cleanup spending: Minister

The current spike in oil prices is no reason to force industry to spend more on cleaning up Alberta's tens of thousands of abandoned oil and gas wells, says the province's energy minister.

Sonya Savage said the province's recently adopted plan to fix the problem, which requires industry to spend $422 million next year and slightly more after that, will do the trick.

“The framework is a fair and balanced approach to address the management of oil and gas liabilities throughout a project's life cycle,” Savage said in an email Friday. “It also takes into account the challenging conditions that the energy sector in Alberta has grappled with.”

But critics say the province's current cleanup requirements are based on the industry's past efforts, which are what led to the problem in the first place.

The current price spike for oil, now more than $80 a barrel, represents a profit windfall for an industry that should be spending it on cleaning up the province's 97,000 inactive wells.

Given the global attempts to shift away from fossil fuels, this may be Alberta's last chance, said Sara Hastings-simon of the University of Calgary's School of Public Policy.

“It's the last, best chance to fix the issue,” she said. “It doesn't seem fair to have the Alberta public face the cleanup costs when it's the global shareholders of these companies that are going to see the benefits of those higher prices.”

New Democrat Opposition environment critic Marlin Schmidt said forcing industry to spend money on cleanup would create jobs at a time when Alberta has the highest unemployment rate of any large province.

“We need the jobs right now,” he said.

“Increased profits for oil and gas companies are not translating into jobs for Albertans. If we focused on getting money that we are owed for cleanup, we could put Albertans to work right away.”

Savage said the current program allows for higher spending requirements once the economy improves.

“Targets may change due to a variety of factors, such as market conditions and results from closure spending in the previous year.”

Hastings-simon said the time never seems to be right.

“It's never a good time for companies to put in the money that's required to clean up,” Hastings-simon said.

“Either the prices are too low so they can't afford to, or the prices are too high.”