Cypress County faces highest well cleanup tab

Posted on July 5, 2021 by 40 Mile Commentator

By Alex McCuaig

Local Journalism Initiative Reporter

It will cost close to $5 billion to clean up oil and gas wells in Cypress County, the highest price-tag of any municipality in the province – and likely the country – according to a report released last Tuesday.

The report, titled “The Big Cleanup,” was released by the Alberta Liabilities Disclosure Project and also estimates the County of Newell as rounding out the top four municipalities with hefty price tags for well remediation. ALDP’s estimate for Newell is $2.7 billion.

The estimate for well cleanups province-wide is $40- to $70-billion, according to ALDP.

But while the costs are high, so too is the opportunity to create tens of thousands of jobs for industry workers, says ALDP lead researcher Regan Boychuck.

But only if there is an acknowledgement of the issue by provincial regulators, governments and industry that the bill needs to be paid by those who profited if Alberta is going to maintain the polluter pay principle.

“This isn’t an issue that can be ignored by politicians and executives who don’t plan on staying here very long,” said Boychuck. “This issue has to be addressed. It’s not going anywhere. We want to tackle it before it grows any larger while there is still money coming out of the ground to pay for it.”

Boychuck says a large part of the problem comes from businesses “that have no business being in business.”

Namely, companies formed to fail after taking on environmental liabilities of wells but which then are transferred to the underfunded Orphan Well Association once they become insolvent.

The problem is only exacerbated by the real issue of companies going bankrupt if forced to pay for cleanup of wells after decades of inaction in addressing the issue and despite royalty rates currently a quarter of what they were during the booming 1970s, says Boychuck.

Among recommended changes, ALDP suggests making any company which made money from a well responsible for a portion of its cleanup.