Alberta oil well report updated after concerns raised over taxpayer backstop recommendation

The Alberta Energy Regulator says there are nearly 500,000 licensed oil and gas wells across the province, although only about 50,000 are active.

A new version of a government-commissioned report about Alberta’s inactive oil wells and what to do about them now says the province should manage a new insurance fund, rather than backstop it with taxpayer funding.

The tweaked language is one of a few changes made to the report, a draft version of which was leaked to media last month leading critics to warn Alberta’s government was being pushed to let oil and gas companies off the hook for reclaiming wells, as is legally required.

The report, authored by David Yager, a former oilfield services executive and current Alberta Energy Regulator board member, contains over 20 recommendations for dealing with the nearly 80,000 inactive but not reclaimed oil and gas wells littered across the province.

One of those recommendations is to create a new industry funded insurance program to cover liabilities related to closed wells. The draft version said this fund was to be “ultimately backstopped by taxpayers.”

The new report now calls for that insurance program to instead be “managed” by the province.

Energy Minister Brian Jean’s office didn’t directly answer questions about why the wording was changed, instead saying in an email that a province-managed fund could be similar to the government’s emissions reduction fund, which collects industrial carbon taxes from polluters.

“The report included 21 recommendations, not set in stone decisions by the province,” Jean’s office said.

“We are reviewing all of them and will provide more information on which recommendations we intend to implement and how, in the coming months.”