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Cleanup of Orphan Wells

Ms Blakeman: Thank you, Mr. Speaker. With the prosperity of our oil and gas wells comes a price: thousands of abandoned wells, pipelines, and facilities with a billion dollar cleanup price tag. The companies get their resource and walk away. The big question is: who will pay to clean up these sites? My questions are to the Minister of Environment. Can the minister tell us why taxpayers are paying $30 million to clean up orphan wells? They mess it up; we pay to clean it up.

Mr. Renner: Mr. Speaker, there are two reasons. First of all, this government is committed to keeping Albertans at work. That’s the underlying reason for having this expenditure put in place at this point in time. There are thousands of service rigs and individuals that work on those service rigs that are looking for work at this point in time. So that’s part of the reason.

The other part of the reason is because it’s an opportunity for us to address some long-standing issues that, yes, industry is responsible for, but at $10 million a year it’s going to take a lot longer than what we can accomplish at $40 million.

Ms Blakeman: To the same minister: given that the $30 million taxpayer subsidy is only for the upstream oil and gas industry, are taxpayers going to be on the hook for the downstream facilities as well?

Mr. Renner: Let’s be clear, Mr. Speaker. Companies that are currently operating in this province are and will continue to be responsible for the reclamation of everything that they do. Orphan wells are different. Orphan wells are wells that were drilled long ago, and for numerous reasons the company that was responsible for drilling those wells is no longer in business, has gone bankrupt, or for whatever reason is not in a position to be held responsible and liable. Industry pays into a fund to address orphan wells. All this does is speed up the rate at which those wells are reclaimed.

The Speaker: The hon. member.

Ms Blakeman: Thank you. To the Minister of Energy: given that for ’07-08 industry contributed only $13.6 million to the orphan wells fund and there are over 37,000 abandoned sites, for which the ERCB estimates that more than $9 billion will be needed to reclaim them all, why is the fund set up to only collect a fraction of the cost of what is needed?

Mr. Knight: Mr. Speaker, again, it’s interesting that we stand and answer questions relative to newspaper articles and articles that other people publish relative to the business related to energy in the province of Alberta. It’s very true that there is somewhere in the neighbourhood of $12 million or $13 million a year collected. The fund actually has about $110 million in it currently, and they spend about $12 million a year working on orphan wells. The Orphan Well Association, of course, directs that work, a much different situation that we’re talking about here. These are not abandonments. These are orphaned wells. There is an obvious disconnect between what the member is talking about and what it is we’re doing.