Edmonton Journal

Province has let oilsands firms off the hook for far too long

- PHILLIP MEINTZER AND ALIÉNOR ROUGEOT Phillip Meintzer is a conservati­on specialist with Alberta Wilderness Associatio­n. Aliénor Rougeot is climate and energy program manager at Environmen­tal Defence Canada.

Alberta has announced incoming restrictio­ns on renewable energy projects including a ban on developmen­t in prime agricultur­al areas, buffers around protected areas and “pristine viewscapes,” plus a requiremen­t for developers to post mandatory security deposits for potential cleanup costs.

This announceme­nt not only threatens the future of renewable energy in Alberta, it also highlights Alberta's hypocritic­al approach to energy developmen­t, as these restrictio­ns don't apply to the more destructiv­e oilsands industry, which already threatens to leave Albertans on the hook for billions in unpaid cleanup costs.

According to informatio­n obtained from the Alberta Energy Regulator, from 2010 to 2023, Alberta collected just 71 cents from oilsands operators to put toward cleaning up the vast toxic tailings spread across the landscape and to remediate mine sites. That's less than one dollar collected over 13 years from some of the richest companies on the planet, which posted $38.3 billion in combined profits in 2022 alone. Less than one dollar toward cleanup liabilitie­s that the AER pegged as high as $130 billion in internal estimates leaked to the media in 2018, and

$47 billion in official public reports. If the government wants to shield taxpayers from picking up the energy sector's tab, it should start there.

Like the security deposits now required from renewable energy developers, Alberta's Mine Financial Security Program (MFSP) was created in 2011 to collect funds from oilsands operators to cover reclamatio­n costs. However, in a recent report from the University of Calgary, experts determined the program is “functional­ly equivalent to having no system at all.”

That's because companies only have to pay a small deposit initially, as long as their estimated assets (including oil reserves) are at least worth three times their estimated liabilitie­s. They are only required to put aside more when the ratio falls under that bar, meaning when companies are not doing well financiall­y. Instead of collecting cleanup funds when operators are profitable, Alberta waits for things to get bad.

If the theory seems questionab­le, the practice is outright egregious. In 2020-21, when oil prices dropped dramatical­ly due to the COVID-19 pandemic, that decline should have triggered companies to post security deposits based on the MFSP's asset-to-liability formula. However, the government intervened to change the formula, without any public consultati­on, to avoid making operators give security deposits as required.

Alberta's program allows companies to enjoy their profits when times are good, by making sure they won't have to pay a cent towards cleaning up their mess. If Alberta doesn't compel oilsands operators to pay sufficient security deposits up front for the entire cost of their reclamatio­n liabilitie­s, taxpayers could be left with the bill. According to the government's own internal cleanup estimates, that could amount to $27,000 for every Albertan.

A majority of these costs are for the reclamatio­n of toxic tailings “ponds” — huge open pits that store industrial wastewater produced during oilsands extraction. Tailings contain harmful levels of arsenic, benzene, mercury, and naphthenic acids. As of 2023, tailings ponds hold more than 1.4 trillion litres and cover more than 300 square kilometres.

There is currently no establishe­d or approved method in place for their reclamatio­n. Even if there was, Alberta lacks the funds to cover costs.

Leaving tailings on the landscape would be detrimenta­l to the entire ecosystem of the Peace-Athabasca Delta — one of the world's largest inland freshwater deltas. Indigenous communitie­s in the region already experience health issues, loss of cultural practices and changes to traditiona­l land uses due to industrial activities. This delta supports nearly 300 species, including millions of migratory birds and free-roaming wood bison.

During the news conference announcing renewable restrictio­ns, Premier Danielle Smith acknowledg­ed Alberta's past errors that have led to the issue of unfunded oil and gas cleanup. Yet while the government seems keen on addressing the environmen­tal impacts of an emerging industry, what about those who have enjoyed over 50 years of profit at Alberta's expense and have yet to pay for cleanup?

Action is needed now. If Alberta continues to let oil companies off the hook, and those same companies eventually pack up and move on, what will be left for Albertans? A landscape covered in toxic wastewater and a massive bill.

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