Alberta NDP wants UCP to debate $20 billion giveaway to oil companies

The Alberta NDP is asking the UCP to debate the $20 billion royalty credit plan for oil companies to clean up their abandoned wells.

The NDP wants the Legislative Assembly to approve “the polluter-pay principle and oppose the use of government revenue to incentivize the clean-up of abandoned oil and gas wells.”

The opposition party says in a statement oil and gas companies should be “obligated” to clean up the mess they create, especially those that make big profits.

“The polluter-pay principle is quite simple. It means that if you make a mess, you clean it up. But there are some companies out there who don’t abide by this concept. As a result, there are now thousands of inactive oil and gas wells just sitting there. Many of them have owners. In fact, some of these companies are making record profits,” said Alberta NDP environment critic Marlin Schmidt.

Schmidt also questions why the government intends to help oil and gas companies, but not the healthcare system and those experiencing poverty.

“Albertans deserve answers on why Danielle Smith is willing to ignore Albertans and push ahead with a $20 billion gift to her friends and donors at a time when our health care system is in crisis and Albertans are struggling to make ends meet,” said Schmidt.

The UCP told CityNews in a statement their government is still in the consultation and design phase of this potential program, adding ideas and new suggestions are welcome.

“The Liability Management Incentive Pilot program is currently under development and is expected to to be a $100 million total over three years,” said Gabrielle Symbalisty, press secretary to Alberta’s Minister of Energy.

“Consultations are ongoing and will take several months to complete. We won’t prejudge the consultation and analysis process, so we’re anticipating a decision next fall. The Minister of Energy is meeting with landowners, Indigenous groups, municipalities, and industry to design a rehabilitation pilot program after which the cabinet and government caucus will consider the feedback provided and make a final decision on whether and how to proceed.”

The Giveaway is part of the RStar pilot project to incentivize the cleanup and reclamation of wells, which creates a royalty credit for future drilling, according to Energy Minister Pete Guthrie.

Under RStar, companies would earn credits for remediating old wells up to the total liability the well represents as calculated by Alberta’s energy regulator. That credit would then apply against revenue earned from new production to reduce royalties or be sold to another operator.

“It’s like moving more of your income into a lower tax bracket,” said Andrew Leach, a University of Alberta energy economist who has seen the proposal’s details.

Proponents say the program would encourage new drilling, help clean up Alberta’s 170,000 abandoned wells and create jobs doing both. In the letter written when Smith was still a lobbyist, she quotes a consultant who says $20 billion in RStar credits would create 366,000 jobs and $8.5 billion in royalties.

— With files from The Canadian Press