The general rule in regard to environmental damage is the polluter pays. In accordance with that rule as applied to mining, Alberta has in place the Mine Financial Security Program (MFSP). The program is designed to collect financial security from mine owners to protect the public from the financial burden of cleaning up after their projects are concluded. Under the MFSP, oil mining companies use their reserves as collateral. They contribute to a cleanup fund based on the value of their assets. However, except for a small base payment paid up front, reclamation payments don’t begin until a mine has only 15 years of reserves remaining.

We know how that kind of thinking worked for the conventional industry. Companies were allowed to leave payment for reclaiming their well sites until after the wells were abandoned. The result is thousands of “orphan” wells, i.e. abandoned wells that no longer have a financially viable owner. An orphan well fund, financed by the industry, is proving inadequate. As a result, you and I are bearing much of the burden. Last year the federal government announced $1.7-billion to clean up orphan wells in B.C., Alberta and Saskatchewan. Alberta has announced loans to the Orphan Well Association for $335-million.

We can expect a similarly sad story in the tar sands. As reported by the Pembina Institute, tar sands operators have posted only $0.9-billion of the estimated $31-billion required to clean up the damage done to date. In other words, should for whatever reason the industry collapse, Alberta taxpayers would be on the hook for $30-billion. So far.

A company’s reclamation payments are based on the ratio of a mine’s assets to the liability of cleaning it up. It must make additional payments if the ratio is less than three to one. This means that if the price of oil drops too low—like last year when it temporarily dropped into the negative—the payments will increase to bring the ratio back to three to one.

This of course is as it should be. If it looks like a company may be financially challenged, it is that much more important for the public to be protected. The UCP government is of a different opinion. It suggests that “the math doesn’t work” with last year’s low oil prices, so to ease the burden on the companies it will allow them to base their payments on the revenue they earned from each barrel of oil they produced rather than directly tying their value to the price of oil.

Should companies fail, or should the entire industry fail, as the world increasingly moves away from fossils fuels, the cost of reclamation will fall upon Albertans. And, just as with the conventional industry, Alberta will beg for help from the feds. All Canadians will pay.

The cost will be high. The Alberta Energy Regulator estimates the ultimate cost to rehabilitate the land disturbed by tar sands production as $130-billion, far higher than the estimated liabilities made public by government and industry officials. To date, only 0.1 percent has been reclaimed. A very big bill is coming due.

One thought on “You, <em>yes you</em>, will pay for the tar sands cleanup”
  1. Yes, and so far as I’m aware, no Alberta oil or dilbit has ever made it to Atlantic Canada except in cans of motor oil. No pipeline, because not enough population to turn a fast buck.

    Helping to pay for Alberta’s virtually non-existent regulation of their oilfields over the decades is thus literally not our responsibility down East, even paying through the federal back door. The people who made the money and lived high off the hog are the ones who need to step up to the plate to pay for remediation. Plain and simple. You made your bed, now sleep in it, as the old saying goes. Without oil, and natural resources is a treasured provincial jurisdiction, would Alberta have had a higher standard of living than we do, and award citizens with zero provincial sales tax and low provincial income tax rates? And then act superior and lecture us to embrace their style of politics?

    That great intellectual harper, and Alberta leaders before him back to Lougheed, claimed the West wasn’t listened to in Ottawa as was its due when any Canadian dope should have been able to see the way of prairie poltical life was superior and needed to be copied by all Canadians. harper proceeded to inform Maritimers we were lazy and without ambition, like a rich man telling a beggar to get a job, and said he’d change the face of Canada. His hubris was based on a depleting resource that in historical terms briefly fuelled prosperity. Somehow, like all recent Alberta politicians, he confused the wealth derived from natural resources as a sign Alberta-style politics was a superior philosophy. One has nothing to do with the other, and to believe so is the mark of a very stupid person. Rancid conservatism is not the way to run Canada, nor did citizens need a kick in the butt for the ills caused by bad political leadership. Yet somehow it was the average citizens’fault that things weren’t to harper’s liking during the abysmal years we had him as PM.

    Socialized payment of private costs (being the depleted oilfield remediation in this case) is the typical expectation these days from the entitled who don’t see why their way of life should be disturbed by some mere inconvenience that the mob can pay for. So I expect ever more whining and rattling the tin cup is what we’ll hear and see from kenney. Just like the bankers after 2008. Get stuffed, pop-in-Jay. Albertans have been very badly led for a very long time. harper and kenney are two transplanted Ontarians who picked Alberta as a likely spot to grow right wing anti-social careers with a helping of God and “Christianity” as a veneer of respectability.

    As you can tell, this is a hot button issue for me. It’s about time some home truths got aired in this country. Neoliberalism has gone quite far enough, the environment is ruined as well, which means the Liberals are as guilty as Cons. Useless pair of big money parties. Just to make my tirade complete, I’ll dun Notley’s NDP Lite. We got bombarded down here at the 45th parallel by TV ads during her reign. Just put in TMX so’s Alberta could flog more dilbit, and it would pay for shiny new hospitals and a better life for all, and there’d be enough left over to get started on that pesky Environmental file. A non-sequitur argument of the worst kind. Complete nonsense.

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