Tuesday, December 10, 2019

Would YOU do business with a Deadbeat?

Jason Kenney with former PM Stephen Harper

Would YOU do business with a deadbeat?  Would you expect anyone in your family to do business with a deadbeat--even if that deadbeat was also a member of your own family?

The more you read about the American owned and operated oil business that has been powering Alberta's economy for decades now--the more you learn and realize that it is an entirely false economy. The gas/oil business is built on government "welfare bum" handouts, subsidies, tax breaks and avoidance of all responsibility to the environment--that it is systematically ripping apart and destroying.

One of the most precious commodities on Planet Earth today is fresh, clean water.  More and more of the billions of humans on this planet literally have to fight for a daily portion of potable water to drink.  It's getting worse. Yet Alberta is one of the greatest wasters and despoilers of fresh water on the planet...and they want to accelerate that dubious reputation.  Millions of gallons of fresh water are used to frack the oil sands in the extraction of "bitumen".  At what point will the water used be more valuable than the bitumen extracted?!  Is that a good economy or is that the short-sighted, greedy, self-involved mindset of a deadbeat?

Here we have an expose in the Globe and Mail of Alberta's willful negligence in cleaning up the mess in its "orphaned oil and gas wells.  Please read and I will have more comments to follow:

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Alberta ignores the ticking time-bomb of orphaned oil and gas wells at its own peril


Author:  Martin Olszynski is an associate professor at the University of Calgary’s faculty of law.

Despite Alberta Premier Jason Kenney’s campaign promises, the province’s overall economy has yet to find its footing.

The one exception, though, may be the panel industry.

Ranging from regulatory red tape in the oil and gas sector, to the recently completed blue-ribbon panel on government spending, and one that is now hearing from Albertans about getting a “fair deal" within the Canadian federation, these are boom times in boardrooms and for the committees that occupy them.

In light of this, I hope that there’s room for one more panel at the party – one that could provide much-needed information around a potential financial time bomb down the road, but not so far down as some may assume.

The Calgary Herald estimates that Alberta is home to 93,000 inactive and orphaned oil and gas wells. While many of those wells are owned by financially viable companies, an increasing number are not. This represents a “looming financial and environmental crisis” reminiscent of the 2008 subprime mortgage crisis, according to an investigation last year from The Globe and Mail. "A growing proportion [of inactive wells] are owned by companies that can least afford to clean them up … when their commercial life ends.”

When that happens in Alberta, those inactive wells become the responsibility of the Orphan Well Association (OWA), which is primarily funded by an industry levy that is increasingly understood as insufficient. The OWA’s chief executive credits a provincial $235-million loan for enabling it to reclaim about 1,200 wells since 2017, bringing the current inventory down to 3,406 wells – but more wells in need of reclamation are on the way. 

One of the primary barriers to a clear understanding of the problem appears to be the absence of a credible and transparent assessment of cleanup costs. Based on its recent experience, the OWA suggests that average costs range between $27,000 and $34,000 a well. Critics, such as the Alberta Liabilities Disclosure Project, dismiss those numbers as primarily based on easy-to-cleanup wells, and point to internal Alberta Energy Regulator (AER) estimates that suggests the costs could potentially rise to $210,000 a well, which would add up to a staggering $100-billion in total liabilities. Those same estimates also looked at oil-sands mines and provincial pipelines, which could bring the number up as high as $260-billion.

While the regulator sees these numbers as a “worst-case” scenario, neither the province nor the industry have yet seen fit to provide the public with more detailed and credible estimates.

With respect to the oil sands, the AER’s Mine Financial Security Program (MFSP) currently reports total liabilities at $31.39-billion, but holds only $1.47-billion in security – which is proportionately less than was held by the AER back in 2015 when Alberta’s Auditor-General first raised concerns about the MFSP. The Auditor-General warned that the province (i.e., taxpayers) “may have to pay a potentially substantial cost for this work to be completed.”

The Auditor-General’s concerns, supported by ensuing reports, include the fact that MFSP numbers are based on reports submitted by oil-sands companies, do not require supporting documentation, are rarely audited, and do not reflect the uncertainty in the effectiveness of proposed measures (such as water-capping).

The province itself has acknowledged that inactive and orphaned wells pose a threat. In late November, it sent a letter to federal Finance Minister Bill Morneau, asking for additional money to assist in the reclamation effort. Ottawa already provided $30-million in 2017, so how much more help can the province ask for, especially since the industry is legally responsible? It’s nearly impossible to answer that without knowing the scope and magnitude of the problem, and we simply don’t have that information. That’s where a panel could come in.

Albertans may be suffering from panel fatigue. But bearing in mind the assumptions underlying some of those other initiatives, it’s hard to imagine a problem in more desperate need of resolution. Alberta’s public debt is currently around $80-billion, and the estimates we have suggest that this debt could double or even triple within a generation. And while it is likely too late for some portion of Alberta’s inactive wells, it is not too late to prevent the same from happening with respect to the oil sands.

For Albertans contemplating their future, an independent inquiry into the extent of the oil and gas sector’s underfunded environmental liabilities requires champions – especially since getting a solid grip on the scale and potential solutions for the issue seems like basic due diligence. A clear and credible assessment, as well as potential regulatory responses, should be everyone’s priority.

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Greencrow says: Hey, if I was a crazy conspiracy theorist, I would say that some foreign [NAU] entities are setting Alberta up as a timebomb to blow Canada to smithereens.  All this debt, all this waste, all this corporate welfare bum-ism...it's gonna blow!

Yet, British Columbia is expected to bow its head, forget about its own environment and jump on the TMX bandwagon "to save Canada".  Should, heaven forbid, there be a bitumen spill in Burrard Inlet [which should be declared a protected marine park in perpetuity] will the Albertans treat it like they've treated the "Orphaned Oil and Gas Wells" on their own territory?  Will they "declare bankruptcy" and force British Columbia to clean up their mess?  Would YOU do business with a deadbeat?!

8 comments:

Reading between the lines said...

Isn't it always the same though ,the expense of capping and clean up of the dead wells will be pushed on to the public purse while big business has finished raking off the benefits and is now nowhere to be found. And if you talk to any Albertan about socialism you will get a good talking to about the benefits of free enterprise capitalism.Like in 2008 the bankrupt banks and businesses didn't seem to mind being bailed out so much , but don't remind anyone that is socialism for rich .

greencrow said...

Hi RBTL

And now Jason Kenney is starting up a $30 million "war room" to combat inaccurate information about the oil industry in Alberta. We would all really like to know what "inaccurate" information he's talking about. In fact, I'd like to debate that particular topic with him. IMO, the "war room" is just another $30 million taxpayer dollar corporate welfare bum handout for the foreign owners of the oil industry...so their spin doctors can all get paid.

Reading between the lines said...

No doubt !

M. Rocknest said...

Interesting that the cost to clean up a dead oil/gas well can be the same as decomissioning a worn out wind turbine. Producing energy is expensive whether it's coming or going. In the between time there are enviromnental issues, no matter what the energy source might be. Wind turbines appear relatively innocent in this regard but they are a hazard to birds and bats and some humans living in close proximity report adverse health effects. There's simply no free, perfectly "clean", lunch when it comes to meeting our energy needs ... yet. I wonder if they'll ever make cost-effective thorium nuclear reactors for home installation? Would they even allow us to completely disconnect from the grid which binds us to a corporation's bank account? Where's an ET with the blueprints to tap into zero-point energy when you really need it?

I'm commenting on this issue because I'm afraid I'd go too anti-PC if I commented on your other current post about Canada's regretable relationship with Israhell (yes, IMHO, our government has a deal with the devil going on there). However, I will say I didn't watch the last olympics and won't watch the upcoming ones either. Russia and its innocent athletes were unfairly treated by WADA for a doping incident where the suspect turned accuser turned defector and the world turned a blind eye to the truth.

greencrow said...

Hi M. Rocknest

Thanks for your comments. It is encouraging to read your views, which indicate you're one of a minority--the "woke" sentients that I write for.

BTW, I am also against wind turbines. They're not functional enough and are an eyesore, in addition to being a hazard to wildlife. I am in favour of solar power but it has to be massively improved over what it is today...and I believe humanity has the capacity to achieve that goal.

gc

Reading between the lines said...

@ M.Rocknest .Some very good points that I entirely agree with .
Those of us that are awake , know that we have been visited by other beings from afar ,probably for millions of years . As Dr, Greer states , how did they get here.And that is probably the reason why research on this subject is taboo. The energy needed for the travel and lets not talk about interdementionality .
The political sphere in the West is controlled by zionist entities and I am at a loss to come up with a solution to wake people up to this .It is said that the protocols of zion are fake .I am not so sure given our state of affairs.In all fairness ,not all Jewish people are Talmudists .I support IJV in Canada ,an organization that promotes peace and justice in Palestine .Much needed.
As for the WADA decisions ,that they are political is beyond question .Short of redress of said decision ,I also will not be viewing the forthcoming Olympics .
Very unfortunate for the very good athletes of Russia and my heart goes out to them.

greencrow said...

RBTL says:

"...I support IJV in Canada ,an organization that promotes peace and justice in Palestine. Much needed..."

I also support this group RBTL. I have said many times on this blog that the bravest of the brave...the ones who are working in the dark belly of the Zionist Beast that is currently hollowing out USrael are Jews themselves. Bloggers like Ron Unz, Stephen Lendman and writers like Atsmon, Finklestein and others"

http://www.thehypertexts.com/Jewish%20Intellectuals%20Who%20Opposed%20Zionism%20Israel%20Racism%20Injustices%20Apartheid%20Ethnic%20Cleansing.htm

But, unfortunately, these are the notable and rare exceptions. Sadly, most Jews either subscribe to Ziofascism or are silent. That's why I have in the last few years decided to categorize "Jews" and "Ziofascists" together. Only when Jews realize that their identity has been stolen and used to destroy humanity will they be able to rise up and divest themselves of these parasitic entities. As a Social Worker, then, I have been forced to "name" the problem.

M. Rocknest said...

Truthfully I'm not a fan of giant wind turbines. However, I'm always interested in learning more about them. Today I came across this article about the challenges of decomissioning dead turbines and it includes a video of some spectacular and dangerous failures of these whirling monsters. I'm posting it here in case anyone happens to come across this particular blog post of Greencrow. In my humble opinion, the answer to the "green" generation of electricity is NOT "blowing in the wind".
http://www.informationliberation.com/?id=61170