Alberta oilsands giants given secret deal to pay less cleanup cash: NDP

Alberta’s New Democrats say the government has secretly OK’d a deal to ensure that oilsands companies already paying little for future cleanup will pay even less for a while.

EDMONTON — Alberta’s New Democrats say the government has secretly OK’d a deal to ensure that oilsands companies already paying little for future cleanup will pay even less for a while.

NDP industry critic Rachel Notley says leaked documents show the government — which has so far collected $1 billion in the cleanup fund — will let it stand pat for the rest of this decade rather than collect another $400 million as planned.

After that, says Notley, payments are to rise until the fund is worth $6 billion by 2030, despite cleanup cost estimates of $30 billion or higher.

“At its very best 20 years down the road, the government plans to ensure that Albertans will have about one-fifth of the security they require,” Notley said Monday at the legislature.

“Albertans cannot trust this Tory government to stand up for their best interests when it comes to dealing with the energy industry.”

A spokesman for the Environment Department was not immediately available for comment.

Alberta’s auditor general has been warning the government for more than 10 years that too little money is being pledged by oilsands giants to scrub sites where the land, water and wildlife may be contaminated.

The money is needed to ensure taxpayers are off the hook if an oilsands company won’t do the cleanup or has gone out of business.

Notley presented a slide show she said was delivered to government officials in November. That’s around the time she says Premier Ed Stelmach’s cabinet signed off on the new funding approach.

The presentation says oilsands companies are concerned that they’re being asked to pony up too much security given that many of their mines are in their infancy.

The new payment plan reflects an asset-to-liability approach — less money upfront but escalating payments as the mines generate more revenue.

The payoff for the taxpayer, says the presentation, is that more money will be pledged as security in the long run.

The document also acknowledges that the government has not been transparent on the plan and that “information on reclamation status is very difficult for the public to access.”

It suggests that reclamation, which is currently broken down into three categories, be divided further for a total of eight so that the stages are more obvious. It also urges updates be posted on the government’s website.

Notley said the new program is expected to be passed into law this spring to replace current rules.

The province has been negotiating for years with the oilsands industry on how much should be paid into the fund in the form of securities and letters of credit.

Last fall, the Pembina Institute, an environmental think-tank, valued the fund at $820 million, which equates to $12,000 for each of the 68,000-plus hectares of land that will need cleaning up.

Pembina estimated it could cost up to $320,000 per hectare to properly reclaim it, putting the current liability at around $15 billion.

Notley suggested more money upfront would be a good short-term move.

“If more security were put up upfront and (the companies) had that security slowly given back to them as they reclaimed, there might be more impetus for them to reclaim as they go.”

To date, one reclamation certificate has been issued for an oilsands mine.

Notley acknowledged that the oilsands giants aren’t in danger of going bust, but she warned things can change.

“You go out to Sydney (Nova Scotia). You ask them 50 years ago what the future of coal was and everybody thought the money would always be there.

“Now there’s multibillion-dollar liabilities that the taxpayers are cleaning up.”

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