Alberta politics started October 31, 2018

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Alberta politics started October 31, 2018

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'No answers for me': Chief says First Nations left out of McMurray fire response

It was May 8, 2016, and the Fort McMurray wildfire was in full blaze.

Municipal and provincial leaders had gathered to discuss a response when Chief Allan Adam of the Athabasca Chipewyan First Nation walked in wanting to know how their plans would affect Indigenous communities.

"All these heads started looking at each other and they had no answers for me," he recalls. "It was clearly evident they had no plans for emergency procedures for First Nations in the surrounding area."

That's also the main conclusion of a lengthy report by 11 Indigenous communities in and around Fort McMurray. It was funded by the Red Cross and is the result of two years of surveys, meetings and focus groups.

"You had this breakdown in understanding," said Tim Clark, the consultant who wrote the report.


The Fort McMurray wildfire became one of Canada's worst natural disasters.

More than 88,000 residents fled their homes and more than 2,400 structures were damaged or destroyed. The estimated cost was pegged at about $10 billion and nearly 6,000 square kilometres in northern Alberta were scorched.

Nobody knew who was in charge

There were no deaths directly caused by the fire, but the report suggests that wasn't because things went smoothly.

Nobody knew who was in charge, it says. Between municipalities, the province and Ottawa, responsibility for Indigenous communities was up in the air.

There were few relationships and less trust between government and First Nations groups, says the report. Indigenous leaders weren't included in the Regional Emergency Operations Centre.

"You had Fort McMurray First Nation, just east of Fort McMurray, and they didn't even know there was an emergency operations centre," Clark said. "(The municipality) did not reach out to First Nations because it assumed they were being dealt with by the federal government."

Most residents from the nearby hamlet of Janvier left for safety in Lac La Biche, 175 kilometres away. But when a few Janvier kids acted up, everyone, including elders, was rousted and moved again — some back to Janvier, which was still under threat.

Re-entry after the fire was similarly tone-deaf, the report says.


More Indigenous people lost their homes

There was also initial doubt about whether residents would be allowed to rebuild in the Waterways neighbourhood — one of the oldest parts of Fort McMurray and settled by Indigenous people generations ago.

"The municipality understood it in financial terms," Clark said. "The Indigenous people understood it in more of a cultural, historical perspective."

Governments also failed to consider the circumstances of Indigenous communities, he said. Many houses damaged in the fire started off in bad shape. Fewer Indigenous homeowners were insured.

About one-quarter of Indigenous people in the survey lost their homes — a far higher percentage than in Fort McMurray as a whole. About one-third of those who lost homes had no insurance.

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Alberta regulator privately estimates oilpatch's financial liabilities are hundreds of billions more than what it told the public

Cleaning up Alberta's fossil fuel industry could cost an estimated $260 billion, internal regulatory documents warn.

The staggering financial liabilities for the energy industry’s graveyard of spent facilities were spelled out by a high-ranking official of the Alberta Energy Regulator (AER) in a February presentation to a private audience in Calgary.

The estimated liabilities for the oil-rich western Canadian province are far higher than any liability amount made public by government and industry officials.

The official who delivered the new estimates is Rob Wadsworth, vice president of closure and liability for the AER. He said that a “flawed system” of industrial oversight is to blame for a problem that ultimately could leave taxpayers on the hook to cover a portion of the costs.

He also called on all stakeholders to accept tougher regulations and move away from a system that now allows the largest companies to take centuries to clean up their toxic well site graveyards.

“We can continue down our current path until the impacts are felt by the public ... or we can start to implement the numerous changes that we now know need to be made,” say notes from Wadsworth's presentation. He added that the liabilities are underfunded and the collection of security funds from industry is “insufficient.”

Until now, the public has been told the liabilities have been calculated at $58 billion, far less than Wadsworth’s estimate. The presentation did not spell out what he based his estimate on and Wadsworth declined an interview. The government meanwhile has only collected $1.6 billion in liability security from companies....

epaulo13 epaulo13's picture

..damage control

Alberta regulator apologizes for spooking public with $260-billion cleanup cost estimate


But following the media report, the regulator went further, suggesting the decision to use the numbers in the presentation was a mistake.

“We want to apologize for the concern and confusion that this information has caused,” said the statement. “The numbers are staggering – $260 billion in total liability, which is $200 billion more than we have consistently reported. This particular estimate was created for a presentation to try and hammer home the message to industry that the current liability system needs improvement.

“While the message to address liability is important, the numbers were not validated and were based on a hypothetical worst-case scenario. Using these estimates was an error in judgement and one we deeply regret.”

That statement appears to be at odds with Wadsworth’s presentation, which stated multiple times that the $260-billion figure was likely to be a low estimate.


Pressed by journalists to respond to the report, Alberta Premier Rachel Notley noted that the problem was significant.

She said the liabilities would be hard to address amid the “biggest oil price drops in generations,” adding that company practices have improved, but after decades of buildup, the existing problem is “not one that we can fix overnight.”

“The issue has always been one that is of concern to us,” Notley said. “It’s actually a matter that I raised with the provincial government well before we were in government – back when I was in opposition.”

United Conservative Party leader Jason Kenney declined to comment on the investigation’s findings.

However, UCP MLA Jason Nixon said his party will likely have more to say about the issue in Alberta’s upcoming provincial election, scheduled for Spring 2019.

“Regulations were behind when our industry started, and there’s going to be some creative ways that governments in the future are going to have to look at tackling,” Nixon said. “I don’t have an answer for that today.”

The issue also came up during question period in the House of Commons on Thursday, as federal politicians sparred over the investigation’s findings.

Alexandre Boulerice, NDP MP for Rosemont — La Petite-Patrie, asked what it would take to get the Liberal government to take “real action” on climate change.

“That’s a hefty bill for pollution,” Boulerice said in French, referring to the estimated $260 billion price tag.

“When you have to take the Liberals to court to get them to take real steps on climate change, things must be pretty bad. Is that what the Liberals are waiting for? To be taken to court?”

epaulo13 epaulo13's picture

..someone must be punished for the truth getting out. as if the lie was his creation and not a government directive.

Head of Alberta regulator to resign in January after $260-billion oilpatch cleanup estimate leads to apology

The president of Alberta’s fossil fuel industry regulator will resign in January, after the organization publicly apologized for the alarm caused by its $260-billion estimate of financial liabilities in the province’s oilpatch.

Jim Ellis, president and chief executive officer of the Alberta Energy Regulator, will be resigning effective Jan. 31, 2019, the organization announced Friday. He became president of the regulator in June 2013.

The announcement comes on the heels of a Nov. 1 report by National Observer, Global News, the Toronto Star and StarMetro Calgary that revealed the regulator’s stunning internal estimate of the cost of cleaning up aging and inactive oil and gas exploration wells, facilities, pipelines and toxic tailings ponds from oilsands mines.

The estimated financial liabilities, contained in a presentation by the regulator’s vice-president of closure and liability Robert Wadsworth, were $200 billion greater than a previous public estimate of just over $58 billion.

The AER said the decision for Ellis to resign “has been in the planning stages for the past several months.”

"The story you reference is unrelated to today's announcement," said AER's communications and international relations director Bob Curran, referring to the liabilities report.....

epaulo13 epaulo13's picture

The damage control from Alberta's oilpatch watchdog is nonsensical

t’s difficult to overstate the consequences of the predicament that the regulator – assumed to guard the public interest, but long since captured to serve industry – has plunged the province

For months its top experts have known that the financial liabilities accumulated by the oilpatch are staggering figures that are far higher than any the industry and government have told the public.

While industry has pocketed hundreds of billions in profits from public resources, complicit regulators have enabled $260 billion in unfunded cleanup to accumulate, as National Observer, Global News and the Toronto Star reported this week. Most of these liabilities have been kept off the balance sheets of government and industry.


At the heart of the problem is a regulatory system that Wadsworth admitted was "flawed."

The AER will soon tweak rules governing the cleanup of aging and expired oilfield infrastructure. But the changes were developed in close collaboration with industry and will almost certainly fail to address the true scale, urgency or cost of the crisis.

Before the provincial election this spring, Albertans must get informed and get engaged if there is to be any chance of making the polluter pay and avoiding the worst consequences of the mighty oilpatch’s capture of Alberta energy regulators.

The starkest example is the scandalous mismanagement of aging and expired oilfield infrastructure and the accumulation of $260 billion in cleanup liabilities while hiding the true amount from the public.

Shocking scale of unreported liabilities

It puts the scale of off-balance sheet liabilities on a shocking level.

Liabilities not recorded on a company's balance sheet are hidden from investors and lenders. Such hidden liabilities can become a significant concern when trying to assess a firm’s financial health.

This scale of unaccounted for liability also has the potential to seriously affect the province’s credit rating.

Regulators have failed to impose meaningful cleanup deadlines. Another central reason that industry has failed to fulfill a legal obligation to return sites to near their original state is this: accountants simply make the problem disappear.

Accountants do so in three ways. First, they begin with absurdly low estimates of the actual cost of reclamation.

Then, the schedule of payments necessary to fund cleanup is drawn far into the future with unrealistically long well lives.

Finally, the underestimated costs are discounted over too many years to arrive at the “net present value” that is recorded on a company’s balance sheet.

The result leaves fractions of a penny on the dollar of the actual cleanup costs on today’s books.


This makes a mockery of what the Canadian Association of Petroleum Producers told the last royalty review: “The LLR Program protects industry, and industry protects the public.”

The days of hiding this crisis are over

The truth is that the LLR program protects industry from having to pay even tiny deposits on multi-billion-dollar cleanup costs. How is industry protecting the public?

The cleanup of hundreds of thousands of kilometres of pipeline has never been a part of a regulatory program in Alberta, so the liabilities are not accounted for on company balance sheets, and regulators hold no security for them. The internal AER estimate pegs the pipeline price tag at $30 billion.

The low-ball liabilities publicly reported under the MFSP are supplied by industry without verification by the regulator. And almost all oil and gas producers use the public LLR numbers, shown to be gross underestimates, to state cleanup costs.

What’s more, a case currently before the Supreme Court of Canada could effectively render polluters and their bankers immune from the environmental consequences of their profit. This is the RedWater Energy case in which lower courts in Alberta accepted an extreme interpretation of bankruptcy law that allows bankrupt companies to disown liabilities, dealing a huge blow to regulators' ability to force polluters to clean up their mess.

epaulo13 epaulo13's picture! gorsak talks about being surprised at how much support there is for her ideas.

MINI-EP: Paige Gorsak for Edmonton-Strathcona

Paige Gorsak is running for the federal NDP nomination in Edmonton-Strathcona, a seat currently held by the NDP's Linda Duncan (who is not seeking re-election). Kate interviews Paige about her ambitious platform and bold vision for the future, which includes a fossil-fuel phaseout and just transition fund, housing as a human right, free education, universal healthcare, drug decriminalization, and Indigenous sovereignty.
Members of the Federal NDP in Edmonton-Strathcona can vote for Paige at the nomination meeting on November 26th, 2018. See for details.


epaulo13 epaulo13's picture

Alberta oilpatch cleanup would provide decades of employment

Jobs, jobs, jobs, especially in Alberta’s oil industry; they have been at the centre of our national political debate for most of the last three years.

According to Prime Minister Justin Trudeau and Alberta Premier Rachel Notley, they’re the reason we bought a pipeline, and need to twin it and fill it with bitumen in a hurry. According to United Conservative Party leader Jason Kenney (and federal Conservative leader Andrew Scheer, and Ontario Premier Doug Ford) they’re the reason we can’t have a price on carbon.


If Alberta retooled its economic engine to restore the landscape of this beautiful province, rather than continuing to ravage it with extraction, riggers could keep right on rigging and truckers could keep on trucking. With comparatively little retraining or relocation, hundreds of thousands of oilfield service workers could keep doing what they do, where they do it — protected by the same unions too.

We don’t need another pipeline or gargantuan bitumen mine to pump money into the coffers of multinational oil companies. On the contrary, the much greater economic opportunity lies in cleaning up the mess they have already profited from.

And all we need to spark this boom is for governments to enforce the law and make polluters pay. You see, in Canada, the oil industry has a legal obligation to return oil and gas sites to near their original state after their productive life ends.

Now of course there are barriers, huge ones. First, cleanup money has not been set aside. Forty four years of petro-Conservativism resulted in only $1.6 billion in industry deposits against that vast slag heap of liabilities. That works out to just 0.6 cents of every dollar the AER predicts we’ll need for the eventual cleanup.

And needless to say, while the Notley government has been utterly relentless in demanding a new pipeline, it just hasn’t gotten around to pressuring industry to kick any more cash into the cleanup kitty.

Hurtin Albertan

Petro-conservatism.  I like that.  Good article, couldn't agree more.

epaulo13 epaulo13's picture

May warns Ottawa will be forced to pay for oilpatch cleanup costs


On Tuesday, Alberta's governing New Democrats and official Opposition United Conservatives prevented an emergency debate on the issue proposed by a Liberal MLA.

“Yes, the federal government is going to end up being responsible for some of that cleanup,” said May in an interview Wednesday, following remarks she gave at a biotechnology conference in downtown Ottawa.

“Right now all Canadians should know that we have a very heavy debt load that we’re carrying on behalf of the oil industry, because they won’t be paying off their cleanup costs.”

Speaking on Parliament Hill after a caucus meeting, Sohi told National Observer that companies are responsible for cleaning up their environmental destruction — and provinces are responsible for holding those companies accountable.

“This is a report that was generated by the regulator in is a liability that the oil industry is responsible for, and it’s a liability that a provincial government manages, or asks companies in Alberta to manage,” he said.

Feds gave millions for Sydney Tar Ponds cleanup

May argued that the federal government had already spent hundreds of millions of dollars for an environmental cleanup of a provincial installation — the Sydney Tar Ponds on Cape Breton Island, which she called one of the country’s worst toxic waste sites.

Toxic sludge had flowed into an estuary into the harbour of Sydney, N.S., the byproducts of a steel plant that ha been bought by the Nova Scotia government. In 2001, May — at the time the executive director of the Sierra Club of Canada — went on a 17-day hunger strike to demand relocation of residents away from toxins in a Sydney neighbourhood.

Six years later, the federal government committed $280 million to a joint $400-million fund with Nova Scotia to clean up the mess. May said it was a recognition of Ottawa’s responsibility — even though it was much smaller than the size of operations in Alberta’s oilpatch.

“That’s one estuary on Cape Breton Island — a fraction of the size of the tailings ponds the oilsands are creating,” she said. “So yes, we’re all going to end up paying for the cleanup.”

Asked about whether the Sydney Tar Ponds set a precedent for federal government investment in environmental cleanups, Sohi said “I don’t know the specifics of the project that you are mentioning,” and reiterated his stance on provincial responsibility.

“It is my understanding that companies are responsible for making sure that they have plans in place to mitigate the damage that is done to the environment,” he said, “and it’s the province’s responsibility to make sure that when these resources are extracted, companies are held responsible to pay for the costs of remediation and cleanup that has to occur afterwards.”

The federal government has already chipped in some money to help Alberta clean up abandoned wells. In its 2017 federal budget, the Trudeau government offered $30 million in support for the oilpatch, including funding to support reclamation of orphaned wells. An orphan well is an inactive site that no longer has an operator due to bankruptcy.

epaulo13 epaulo13's picture

..from an email


This past week has been overwhelming. Together, we've raised an astonishing $30k for the Tar Sands Trial, bringing out grand total to over $500,000. This success is thanks to 10 new online fundraisers, great events in Montreal and Victoria, and extraordinary people stepping up to have their contributions doubled by our matching funds donors. It's amazing, it's goosebumps-inducing, and here at RAVEN the realization is dawning that we just may be able to pull off our audacious goal.


Main Street Poll; November 2, 2018:

UCP: 54.3%

NDP:  29.1

Alberta Party: 5.5

Liberals: 5.2

Green Party: 2.7

Freedom Conservative: 2.5

The Wildrose and the PCs garnered a total of 52% of the vote in the last election, and the UCP today has 54.3%”, continued Angolano. “This indicates that UCP support is most likely an aggregate of pre-existing support for the two former small-c conservative parties.

The poll also found that Albertans have a positive view of Kenney compared to Notley. While respondents have +14.3% net favourability rating of Kenney, Notley has a -20% rating.

Ken Burch Ken Burch's picture

At this stage, it looks as though Kenney could promise to legalize bestiality and still win in a landslide.

epaulo13 epaulo13's picture

The silence on Alberta's $260 billion environmental liability is deafening


Anger among many Albertans that successive governments have let this issue worsen has not led to accountability – yet. You would think that the revelation of a $260 billion in off the books environmental debt against a mere $1.6 billion in security deposits collected might garner more sustained interest. Yet headlines the next day in Edmonton focused on a $79 per household proposed city tax hike and not the quarter trillion dollar elephant in the room.

It’s difficult to imagine companies investing such a large sum of money in reclamation efforts and even more inconceivable that this would take place when revenues dry up. If companies walk away, Alberta taxpayers could ultimately be on the hook for the cleanup, which would amount to about $150,000 per household or more than six times Alberta’s current provincial debt. That’s why it is critical that Alberta strengthens its regulatory regime to ensure that companies that reap the benefits of the province’s natural resources are also responsible for the cleanup.

United Conservative Party avoided the issue

The official opposition, the United Conservative Party, which will likely campaign around financial responsibility and the deficit in Alberta’s 2019 election, curiously declined to comment on the $260 billion liability – an issue of financial mismanagement that dwarfs all others. What’s more, party leader Jason Kenney signaled that he wants to appoint a “minister of deregulation” and undo environmental policy advancements. To go back to the old way of doing things and relax already weak requirements is the opposite of what needs to be done and would expose Albertans to further financial risks of this inherited problem. Such regression in policy is illogical.

It is also troubling that the smoking gun on the need to protect citizens and reform Alberta’s weak liability system, was met in large part with silence. If nothing else, it might temporarily quiet the usual refrain about Alberta’s “world class” regulatory system and cause a moment’s pause in industry and opposition arguments that the oil and gas industry needs even more deregulation.

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Top Alberta Fossils Stayed ‘Incredibly Profitable’ Despite Oil Price Crash

The five companies that dominate the oilsands industry have remained "incredibly profitable" despite low oil prices and delays in building new pipelines, according to a report from the Parkland Institute.

"Despite the 2014 oil price crash and the ongoing hand-wringing over pipelines and the price differential, the reality is that the big five oilsands producers have remained incredibly profitable corporations," said Ian Hussey, lead author of a report released Thursday by Parkland Institute and the Canadian Centre for Policy Alternatives.

Last year alone, the companies banked or paid out to shareholders a total of $13.5 billion, he said.

"These companies have been able to continue to transfer sizeable amounts of money to their shareholders or to their bank accounts, while at the same time in 2015 cutting almost 20,000 jobs from the Alberta economy," Hussey said.

The report analyzed the business economics of Suncor Energy, Canadian Natural Resources Limited, Cenovus Energy, Imperial Oil, and Husky Energy, who together produce 80 per cent of Canada's bitumen.


Industry response

Those in Canada's oil industry say the comparison of money paid to shareholders and money paid to governments in taxes and royalties shows the system is fair.

"Both companies and the governments are sharing in the benefits of the development, which is actually quite consistent with the nature of the royalty and resource development system that was built in Alberta," said Ben Brunnen with Canadian Association of Petroleum Producers. "So I would sort of make the case that we see here is an example of the system working quite well."