Alberta auditor general seeks reforms to how province manages oilpatch liabilities
Alberta’s system for managing environmental risks from old oil patch facilities has yet to detail how security will be collected to ensure cleanup and has confirmed that the work has been completed. That’s not enough to confirm, the state’s Comptroller General said Thursday.
“[Alberta Energy Regulator]concluded that it had implemented liability management processes during the audit period, but all of those processes were well designed and We were not effectively mitigating the risk.” As reported by Doug Wylie.
Wiley acknowledged that regulators are reforming how they ensure old energy sites are evaluated and cleaned up.
But the program has yet to address two major problems: abandoned so-called “legacy sites” and inadequate security gathering to keep the number of such sites from growing, he said. Wiley said the current program, which mandates spending on well closures, may not be getting where the problem is.
“Since the program is new, it is too early to tell if sites will be closing sooner,” Wiley wrote. “Licensees are more focused on low-risk, low-cost sites.”
Wiley said regulators should develop and publish targets to ensure the public can determine if enough old sites are being cleaned up.
He also noted that Alberta does not yet have a timeline for operators to rehabilitate the site.
The report highlights that despite regulatory reforms, significant questions remain about how Alberta collects deposits from energy companies.
“We recommend that the Alberta Energy Regulator determine the amount of security that must be collected, when it will be collected, and how the collection will be conducted,” it said.
Similarly, regulators need to increase oversight of remediation programs.
Approximately 17,000 suspended wells are non-compliant. No process exists to ensure that abandoned wells meet environmental standards. Automatic approval of reused wells is rarely checked.
“We encourage Alberta’s energy regulators to evaluate their compliance assurance activities for interrupted wells and periodic abandonment,” the report said. “[Regulators]need to ensure that there is evidence of a corrective action plan review.”
In response, the government did not say whether it would accept and adopt Wiley’s nine recommendations.
Alberta Energy spokesman Gabriel Simballisti said in an email: “The auditor general’s report shows that we have made significant progress in addressing the cleanup of oil and gas sites.
“We appreciate their review and recommendations on the new framework and will work with (regulators) to improve our processes.”
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