Critics call for review after study suggests Alberta Energy Regulator underestimated oil well liability

Critics are calling for a public inquiry into the actions of the Alberta Energy Regulator, after documents surfaced suggesting the agency downplayed the industry's environmental liabilities and withheld information on those costs.

"The [regulator] has failed to do its job," Opposition New Democrat energy critic Nagwan Al-Guneid said in a release Friday.

The regulator announced earlier this week that Alberta faces a $33-billion liability from abandoned and inactive wells.

The Canadian Press reported on internal documents suggesting the real figure is closer to $88 billion. Those documents also included a recommendation that the higher estimate be kept internal to avoid alarming investors or the public.

"The documents … demonstrate that Alberta's Energy Regulator is still operating on the basis of questionable systemic estimates of the cleanup liabilities being imposed on future generations of Albertans," Al-Guneid said.

"While the methods of calculating this multi-generational liability may be complex, Albertans deserve greater levels of transparency from the regulator."

Martin Olszynski, a law professor at the University of Calgary, said withholding the higher estimate is part of a pattern at the agency.

He compared the internal liability estimate to the nine-month gap in 2022 between when the regulator knew about oilsands tailings seeping into groundwater and when it informed downstream First Nations communities in northern Alberta.

"This is all a manifestation of the same disease — regulatory capture of the regulator by the industry," he said.

"It's crystal clear that there was an analysis done, deemed to be more accurate than any other analysis. Yet they explicitly and clearly decided not to share that information with Albertans."

The documents also suggest the regulator didn't have a good handle on pipeline reclamation or the state of 59,000 pieces of energy infrastructure on the provincial landscape. That's a serious failing, said Olszynski, a former federal regulatory lawyer.

"I've never seen this level of wilful ignorance," he said. "There should be some accountability."

Mark Dorin of the Polluter Pay Federation, a landowners group that has argued for years that liabilities are underestimated, agreed some kind of probe is required.

"The [regulator] needs to be reformed," he said.