This is a complex question, but as we consider benefits that flowed to the public and how to apportion cost responsibility between producers and taxpayers, it’s worth noting that oil and gas production doubled in Alberta since 1980 but royalty revenues to the province fell 90% and corporate taxes from producers are down 51% since 2006. Profits were booked without sufficient security deposits and full-cost accounting, so now clean up costs are urged on the public purse. As more companies get into financial trouble, this tab is only getting started. Full-cost accounting is imperative as we move forward with cost-benefit analysis around energy and infrastructure development.
Listen to CBC’s Alberta at Noon with Judy Aldous – Nov. 27, 2019: Orphan wells for insight on this issue.
Also, see What do rural landowners need to know about inactive and orphaned wells:
Increasingly, Albertans have heard about the number of oil and gas wells that sit inactive, neglected, or potentially orphaned in this province. Inactive and orphaned well numbers are growing in parallel with a prolonged energy recession in Alberta since 2014. Often this issue is discussed in an abstract way, mainly focusing on the financial implications for the province or referencing liabilities that companies do not have the funds to properly care for, which raises questions about whether some of these wells will be cleaned up at all.
At the end of the day, rural landowners are the ones who have this infrastructure on their land and have to live with these uncertainties. With support from the Alberta Real Estate Foundation, the Pembina Institute has published the Landowner’s primer: what you need to know about unreclaimed oil and gas wells to help those who are most impacted.
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