The Alberta government is moving forward with a plan that would give tax breaks to oil and gas companies to meet their legal obligations to clean up old well sites, a group of landowner organizations to discuss a pilot project. Will invite the selected group to the meeting.
On Thursday, Alberta Energy Minister Peter Guthrie is scheduled to host groups that are set to discuss “a concept for a royalty credit program to accelerate oil and gas site closures,” a government document indicates. that outlines the proposed pilot program, which has been received. canadian press,
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That pilot program, formerly known as RStar and now called the Liability Management Incentive Program, will issue $100 million in credits that qualified companies can use to apply against royalties earned from new production. Credits will be earned by cleaning up sites that have been inactive for at least 20 years.
Opposition New Democrat energy critic Kathleen Gunley said there should be a dialogue with the public about the pilot project.
“They’re taking public money and giving it to oil companies to do work they’re already legally obligated to do and they’re doing it at a time of high oil prices,” Ganley said.
The idea has been widely criticized by economists, environmentalists, rural municipalities and analysts within Alberta Energy. Critics describe the program as risky, opaque and in violation of the polluter-pays principle.
“For some reason, we are incentivizing future royalties to eliminate liabilities when profits are high,” said Paul McLachlin of Rural Municipalities Alberta. “It’s going to be very confusing for a lot of people.”
Daryl Bennett of Action Surface Rights, who attended the meeting, said Alberta landowners aren’t crazy about the idea of having to deal with 170,000 unclaimed sites on their properties, but those wells need to be cleaned up.
“It is somewhat regrettable that it is left to the taxpayer to fund these programs and royalties will be reduced,” Bennett said. “However, landowners are dealing with a lot of abandoned wells. It’s a kind of Catch-22 situation that was never in the social contract.”
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Not all landowner groups have been invited to the meeting with Guthrie.
Dwight Popovich of the Polluter Pay Federation said his group made repeated requests to attend the session, but was instead asked to meet with department officials.
“If you’re any kind of antisemitist, you definitely won’t be invited,” he said.
Alberta Energy spokeswoman Gabrielle Cimbalisti said further consultations are planned.
“Indigenous groups, municipalities, industry associations, oil and gas companies, landowners and other groups have been asked to provide feedback on the proposed criteria,” she said in an email.
The government document says that the program is still in development and no final decision has been made.
However, some believe that the United Conservative Party government has already made up its mind.
“It’s moving a lot faster than we expected,” said McLachlin, who has what he described as “some engagement” on the pilot project.
The proposal has been pushed through the years, including by Premier Danielle Smith when she was a business lobbyist. A former RStar lobbyist now works in Smith’s Calgary office. The program was part of Guthrie’s mandate letter when Smith nominated him to cabinet.
“I feel great that this program has been fixed,” Ganelli said. “I feel like it (the program) was always going to move forward.”
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“They could have said, ‘You’re not allowed to drill any more until you do a well cleanup,'” Bennett said.
Timeline is another option, Popovich said.
“If a well is shut down for 12 months, you have 18 months to clean it,” he said. “Most jurisdictions have that timeline. Alberta doesn’t have one.
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McLaughlin noted that other taxes on oilpatch activity have been removed and wondered why more incentives were needed at the time of record industry profits.
“It’s designed by industry,” he said. “The engagement with landowners is going to happen on day one, and then the pilot is going to roll out.
“It (the program) is not built from the ground up based on the big picture liability conversation.”
A broader conversation is needed on the issue, Gunley said.
“At the very least, UCP should be talking not only to friends and insiders, but to the entire public.”
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