Critics are calling for a public inquiry into the Alberta Energy Regulator’s (AER) actions following the emergence of documents suggesting that the regulator downplayed the environmental liabilities of the oil and gas industry and withheld information regarding the actual costs of these liabilities.
Earlier this week, the AER disclosed that Alberta faces a $33-billion liability associated with abandoned and inactive wells. However, internal documents obtained by The Canadian Press indicate that the real figure is closer to $88 billion. The documents also revealed that the higher estimate was deliberately kept confidential to prevent alarming investors or the public.
Nagwan Al-Guneid, Opposition New Democrat energy critic, expressed her concern, stating, “The [regulator] has failed to do its job.” She emphasized the need for transparency in calculating and disclosing multi-generational environmental cleanup liabilities.
Martin Olszynski, a law professor at the University of Calgary, noted that withholding the higher liability estimate is consistent with a pattern of regulatory decisions favoring the industry over public interest. Olszynski argued that the regulator’s actions reflect “regulatory capture” by the industry.
The documents also highlighted the regulator’s inadequate knowledge of pipeline reclamation and the condition of 59,000 energy infrastructure pieces across the province. Olszynski called for accountability, emphasizing the gravity of the situation.
Mark Dorin of the Polluter Pay Federation, a landowners group advocating for more accurate liability assessments, agreed that a thorough investigation is needed. Dorin also called for an increased industry contribution to the Orphan Well Fund, suggesting that last year’s $135 million levy should exceed $1 billion.
Alberta Energy Minister Brian Jean acknowledged the long-standing issues and promised an announcement later this year regarding liability management and reclamation efforts. He emphasized the government’s commitment to balancing the benefits of oil and gas development with proper site cleanup.
The United Conservative Party has initiated a review of the AER led by David Yager, an oil industry veteran. However, details about the review, including its terms of reference and consultation plans, have not been disclosed, and an interim report by Yager has not been made public.
Critics argue that a competent and trusted regulator is vital for the industry’s sustainability and investor confidence and insist on the need for clarity and transparency concerning environmental liabilities.