The Alberta government is moving ahead with a plan that would give oil and gas companies a tax break for meeting their legal obligations to clean up old well sites, inviting a select group of landowner organizations to a meeting to discuss a pilot project.
On Thursday, Alberta Energy Minister Peter Guthrie is scheduled to host those groups to discuss “a concept for a royalty credit program to incent accelerated oil and gas site closure,” indicates a government document that outlines the proposed pilot program, obtained by The Canadian Press.
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That pilot program, previously known as RStar and now called the Liability Management Incentive Program, would issue $100 million in credits that qualified companies could use to apply against royalties earned from new production. Credits would be earned by cleaning up well sites that have been inactive for at least 20 years.
Opposition New Democrat energy critic Kathleen Ganley said there should be a conversation about the pilot project happening with the public.
“They’re taking public money and giving it to oil companies to do work they are already legally obligated to do and they’re doing it at a time of high oil prices,” Ganley said.
The idea has been widely panned by economists, environmentalists, rural municipalities and analysts within Alberta Energy. Critics call the program risky, opaque and a violation of the polluter-pay principle.
“For some reason, we’re incentivizing future royalties to eliminate liabilities when profits are high,” said Paul McLauchlin of Rural Municipalities Alberta. “It’s very confusing to a lot of people.”
Alberta landowners dealing with the 170,000 unreclaimed sites on their properties aren’t crazy about the idea but need to get those wells cleaned up, said Daryl Bennett of Action Surface Rights, which will attend the meeting.
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