The Narwhal: Alberta taxpayers pay another $14M tab for oil companies’ rent

Alberta paid $14 million in rent on behalf of delinquent oil companies in 2022. The government is supposed to recoup that money from companies but data shows debt collection remains below one per cent. Drew Anderson writes the story for The Narwhal.


In a nutshell:

Drew Anderson writes about what seems to have become a perennial problem in the extraction industry. These folks do not like to spend money on cleaning up their messes. In this case, it's oil and gas. Apparently, in the petro-province of Alberta, a landowner must grant access to their property for oil and gas exploration, for which they than receive annual compensation. If the well is abandoned or the rent is otherwise deemed uncollectible, financial responsibility falls to the taxpayers.

Key quote:

“I would guess that if we took all of these sites where surface lease payments are not being paid, we’d find a lot of so-called active sites that probably should be considered inactive and the regulator should be pushing for closure work on those things.”

Big picture:

Unpaid rents is but a small symptom of a much larger deadbeat well-owner problem. With the current number of abandoned wells in Alberta alone hovering around 75,000 there are certain to be massive unfunded liabilities coming due. They often leak methane as well as other pollutants into soil and groundwater, impacting ecosystems and posing a public health threat to surrounding communities. The responsibility for decommissioning and reclaiming abandoned wells is intended to fall on the well operators but enforcement appears to be lacking.

Read the full story in The Narwhal

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