Alberta to pilot oil and gas royalty breaks for legally required well cleanup | 24CA News

The Alberta authorities is transferring forward with a plan that may give oil and gasoline corporations a tax break for assembly their authorized obligations to wash up previous properly websites, inviting a choose group of landowner organizations to a gathering to debate a pilot venture.

On Thursday, Alberta Energy Minister Peter Guthrie is scheduled to host these teams to debate “a concept for a royalty credit program to incent accelerated oil and gas site closure,” signifies a authorities doc that outlines the proposed pilot program, obtained by The Canadian Press.

That pilot program, beforehand referred to as RStar and now referred to as the Liability Management Incentive Program, would situation $100 million in credit that certified corporations may use to use towards royalties earned from new manufacturing. Credits could be earned by cleansing up properly websites which have been inactive for not less than 20 years.

Opposition New Democrat vitality critic Kathleen Ganley mentioned there must be a dialog concerning the pilot venture taking place with the general 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 mentioned.

The thought has been broadly panned by economists, environmentalists, rural municipalities and analysts inside Alberta Energy. Critics name this system dangerous, opaque and a violation of the polluter-pay precept.

“For some reason, we’re incentivizing future royalties to eliminate liabilities when profits are high,” mentioned Paul McLauchlin of Rural Municipalities Alberta. “It’s very confusing to a lot of people.”

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Alberta landowners coping with the 170,000 unreclaimed websites on their properties aren’t loopy concerning the thought however must get these wells cleaned up, mentioned Daryl Bennett of Action Surface Rights, which is able to attend the assembly.

“It’s somewhat regrettable that the taxpayer is left to fund these programs and that royalties will be reduced,” Bennett mentioned. “However, landowners are dealing with lots of abandoned wells. It’s kind of a catch-22 situation that was never in the social contract.”

Not all landowners teams have been invited to the assembly with Guthrie.

Dwight Popowich of the Polluter Pay Federation mentioned his group made repeated requests to attend the session, however have as a substitute been instructed to satisfy with division officers.

“If you happen to be a dissenter of any kind, you definitely won’t be invited,” he mentioned.

Alberta Energy spokeswoman Gabrielle Symbalisty mentioned additional consultations are deliberate.

“Indigenous groups, municipalities, industry associations, oil and gas companies, landowners and other groups have been asked to provide feedback on the proposed criteria,” she mentioned in an e-mail.

The authorities doc says this system continues to be in improvement and no ultimate selections have been made.

However, some really feel the United Conservative Party authorities has already made up its thoughts.

“It’s moving a lot faster than we expected,” mentioned McLauchlin, who has had what he described as “some engagement” on the pilot venture.

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The proposal has been pushed for years, together with by Premier Danielle Smith when she was a business lobbyist. A former RStar lobbyist now works in Smith’s Calgary workplace. The program was a part of Guthrie’s mandate letter when Smith named him to cupboard.

“I very much get the feeling the fix has been in on this program,” mentioned Ganley. “It sounds to me like this (program) was always going to go forward.”

Other solutions to handle Alberta’s big deserted properly program exist.

“They could say, ‘You’re not allowed to drill any more unless you clean up a well,’” Bennett mentioned.

Timelines are another choice, mentioned Popowich.

“If a well is shut for 12 months, you’ve got 18 months to clean it up,” he mentioned. “Most jurisdictions have that timeline. Alberta has none.”

McLauchlin mentioned different taxes on oilpatch exercise have been lifted and wonders why additional incentives are wanted at a time of file trade income.

“This is designed by industry,” he mentioned. “The engagement with landowners is going to be a day, and then the pilot’s going to roll out.

“This (program) hasn’t been built from the ground up on what is the big picture liability conversation.”

A wider dialog on the problem is required, Ganley mentioned.

“At minimum, the UCP should be talking to not just friends and insiders, but to the entire public.”

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