Stricter rules for renewable projects called unfair compared to oil and gas obligations

February 29, 2024 Canuck

The seven-month moratorium on Alberta renewable projects is ending, but industry experts say the introduction of stricter rules creates uncertainty and unfair standards compared to the obligations of oil and gas companies.

Developers of renewable projects will be responsible for clean-up costs and must secure a bond or security with the government.

Mark Dorin, the Polluter Pay Federation’s vice-chair, says that’s good news, but should also apply to non-renewable projects.

“I think it has to be fair across the board and it’s just not right now,” he said.

“Alberta has $260 billion, not $30 billion as the premier said in her press release yesterday, of unfunded oil and gas liabilities to deal with in this province. So, while it’s good that they may be requiring some security deposits for renewables, we still have a much bigger problem with oil and gas to tackle.”

Vulcan County Reeve Jason Schneider says his municipality alone had to pay $12 million in property taxes over the past six years to cover costs of reclamation from non-renewable projects.

“We’re not a big municipality. We’re pretty small in size. We have 4,500 people, so when all of a sudden, $12 million of taxes does not come in, it really changes the way you’re doing things,” he said.

“(It’s been) happening in the south for quite a few years and really, if companies were getting away with it in the south, why wouldn’t you do it in the north? And that’s what we’re seeing.

“Once again, there’s a bit of a grey area and a bit of a crack in the legislation and unfortunately, companies are taking advantage of it.”

Schneider says it’s a lot easier to have these conversations at the beginning of development, like what’s being announced with Alberta wind and solar projects.

“It’s about 20 years too late,” he said.

“We do need to address this, it doesn’t matter what industry, because it’s absolutely ridiculous that taxpayers are cleaning up a mess other companies have made profits off for decades.”

The provincial government does not yet have details on how a renewables liability management program would work and there’s no information regarding how such obligations would apply to oil and gas or other non-renewable projects.

“I think the projects are radically different in cost and the potential impact on environment are also different in nature,” said Alberta Affordability and Utilities Minister Nathan Neudorf.

Premier Danielle Smith said in her remarks Wednesday Alberta must “not repeat errors of the past.”

She said the province is looking to take an approach similar to an Environmental Income Trust, in which debtors may, at their option, establish a trust for the exclusive benefit of the holders of environmental claims.

“I’ve given quite a bit of thought as to how to protect landowner rights, and it seems to me, going forward, if you’re putting aside a little bit each year and it’s growing with interest, then by end-of-life, you should have enough money set aside in order to reclaim it, so that if the property transfers, then a pot of money goes with it,” she said.

“The federal government at some point changed that structure for oil and gas and that’s the kind of approach that we’re thinking of doing here. We still have to do a bit more consultation on it.”

The Alberta Energy Regulator says there are currently more than 170,000 wells across the province that are either inactive or abandoned.

There are 26 renewable projects (25 wind, one solar) awaiting approval province-wide following this moratorium in Alberta.

Together, these projects would generate 3,450 megawatts of power.

Alberta accounted for 92 per cent of Canada’s new renewable energy generation capacity in 2023.

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