Estimated Alberta Tar Sands Cleanup Costs $57 Billion; 3% Of Those Costs Covered By Fund Meant To "Protect" Citizens
In a scathing 2023 report, University of Calgary researchers summed up provincial oversight of the oil patch with the following opening sentence: “Alberta policy on inactive and orphan oil and gas wells is a massive regulatory failure characterized by a historical lack of transparency, excessive regulatory discretion, and regulatory capture…”
That storied tradition apparently continues with recent news that the Alberta government will not seek to increase the security posted by oil sands mining operators despite ballooning mine reclamation liabilities that have more than doubled in the last six years to an official estimate of $57.3 billion. Only 3 percent of this amount is currently covered by the Mine Financial Security Program (MFSP) meant to protect Albertans from footing the bill for mine clean-up costs that have doubled from an estimated $28 billion in 2018. During this period, the MFSP saw only a 17 percent increase – all of which was contributed by coal mining companies.
Oil sands operators have only contributed a single dollar to this fund since 2010 under rules that do not require them to make additional deposits until they have 15 years of profitable bitumen reserves remaining. And what would happen if high-cost low-value Alberta bitumen became uneconomic to extract as the world shifts away from fossil fuels? The Alberta taxpayer would likely be left holding the bag for billions in mine reclamation costs, as they have for other unfunded messes foisted on the public by the oil industry.
The Alberta Auditor General in 2023 pegged the clean-up costs from conventional oil and gas wells and pipelines at $60 billion. Yet the Alberta Energy Regulator (AER) has collected only $295 million in security from the companies it is allegedly overseeing. That would cover only 0.5 percent of this towering debt. Put another way, the Alberta government has allowed each Alberta household to be on the hook for over $36,000 in unfunded well and pipeline liabilities racked up by an exceedingly profitable industrial sector. If you also include $55 billion in unfunded bitumen mine liabilities the tab for every Alberta home could exceed $70,000 per Albertan home.
EDIT
https://www.desmog.com/2024/10/30/albertas-oil-sands-operators-still-wont-pay-for-their-own-cleanup/