Alberta Auditor General’s report raises environmental liability issues

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This file photo taken in September 2022 shows a pumpjack pumping oil from a wellhead near Calgary.  (Jeff McIntosh/Canadian Press - Image credit)

This file photo taken in September 2022 shows a pumpjack pumping oil from a wellhead near Calgary. (Jeff McIntosh/Canadian Press – Image credit)

Alberta’s auditor general says $125 million in federal funds earmarked for cleaning up idle oil and gas wells in the province remain unspent and in limbo.

The findings are one of several concerns about environmental regulation and controls raised by the Auditor General in a 228-page report released Thursday.

Last heard, the audit team said, the provincial and federal governments had not yet agreed on whether Alberta could hand over the remaining funds to another agency to mop up further environmental liability. That’s what it means.

Eric Leonti, one of the state’s four assistant comptrollers, said: “We will get the program up and running quickly and ensure that the funds are directed to their purpose as efficiently as possible. “It was probably a very difficult time.” Interview on Thursday.

The Sites Restoration Program (SRP) was a $1 billion economic injection handed out by the federal government as part of the national economic response plan to the 2020 coronavirus disease (COVID-19) pandemic.

The state had until March 31, 2022 to disburse all grants for site cleanup, and the funds were to be used by the end of 2022.

The state approved 35,000 grant applications, paid out more than $864 million to 560 contractors and created nearly 4,200 jobs, the auditor said.

Energy and Minerals Minister Brian Jean said in an emailed statement that Alberta has asked the federal government if it can keep the remaining funds to subsidize further well cleanup contracts on First Nations lands. Ta. Jean said this work was a particularly successful part of his SRP.

“These are obligations that the federal government must meet at some point, and now is the best time to do so,” Jean said in a statement.

The last time it examined SRP in 2022, the Auditor General found the state had not identified potential risks, such as contractors not spending in full or completing work on time. There was found.

The federal environment minister’s staff did not respond to requests for comment Thursday.

TIER underpayment

Martin Olsinski, an associate professor of law at the University of Calgary who studies environmental and natural resources law, said the unspent funds point to the need to set a deadline by which Alberta must clean up idle industrial sites. He said there was.

He said subsidizing cleanup work alone is not a sufficient incentive if companies can make more money by using these workers to extract oil and gas.

Auditors also found that the company underpaid $30 million because large industrial greenhouse gas emitters underestimated their emissions when paying the industrial carbon levy.

When the Environment Department discovered the error, officials initially believed it did not have the authority to require payment of the shortfall to the Technology Innovation and Emissions Reduction (TIER) Fund.

The audit team concluded that it was wrong for the government to have the power to collect unpaid industrial carbon taxes in the past.

The report says failure to pursue carbon tax funding shortfalls could hamper the province’s climate change adaptation efforts and lead to Alberta misrepresenting how the industry is complying with the law. He said it was possible.

The report also reiterated the auditor general’s previous concerns that Alberta does not accurately capture its environmental responsibilities. The team said the government has yet to act on recommendations from June 2021, and that the state has no responsibility for cleaning up industrial sites when the solvent owner is not present or the owner is unable to remediate the site. said that a decision needs to be made.

The report concludes that the province’s books may not accurately reflect the amount of money Albertans need to spend to clean up abandoned sites.

Leonti said the problem extends beyond the oil and gas industry. He said abandoned coal mines exist and no organization comparable to the Orphan Well Association has stepped in to take responsibility for cleaning them up.

The Department of Environmentally Protected Areas has 19 outstanding auditor recommendations, some dating back to 2008. 11 of them are more than three years old.

Mr Olzinski said the report was “frustrating and disappointing” and highlighted long-standing issues of government interest in environmental management and concerns about conflict with industry.

“Increasingly, Albertans are saying, ‘Who cares about the stores?’” he said. “These are serious, chronic issues that need to be addressed.”

Ryan Fournier, spokesperson for Environment Minister Rebecca Schultz, said Alberta Conservation is currently working to recoup the $30 million industrial carbon tax shortfall.

He said the Minister’s Office was reviewing the auditor’s report and the government was already working to address the auditor’s previous recommendations. He said the ministry has plans to improve issues such as environmental responsibility.

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