Cleaning up more than 300,000 oil and gas wells scattered across Alberta will cost up to $70-billion, and the province should ensure industry pays its bill when the time comes, according to new analysis.
The Alberta Liabilities Disclosure Project (ALDP), which released the report on Tuesday, says the clean-up also presents a unique chance to create 10,000 industry-funded jobs, as Canada diversifies its energy sector to meet its target of net-zero greenhouse gas emissions by 2050. But a concrete plan is required to enable oil workers to transition to these new opportunities.
The ALDP is a collection of landowners, researchers, academics and environmental groups. It has long pressured regulators and government to address the growing problem of energy companies walking away from the environmental messes they are legally bound to clean up.
Report co-author Regan Boychuk likens the current situation in Alberta to a dine-and-dash by the oil and gas industry. To quash it, he says Alberta’s energy regulator must provide full and accurate estimates of the clean-up scale and cost, and gather enough financial securities from the oil sector to cover those costs. The report suggests the creation of a “reclamation trust” that could take over the wells of insolvent companies and use the revenue to cover remediation costs.
The Alberta Energy Regulator says the current liabilities are closer to $30-billion. It recently unveiled a new financial assessment system to determine who can get a licence to operate, and directed companies to spend a certain amount on environmental clean-up each year.
But Mr. Boychuk says the province must muster the political courage to enforce clean-up laws and make polluters pay – and that doing so would spark an employment boom. “With 300,000 wells to be cleaned up, there’s decades of work in every corner of the province,” Mr. Boychuk said.
“There’s an enormous opportunity for full employment in the energy sector. Regardless of how much we produce and how we meet our climate responsibilities winding things down, there’s always going to be enough work for riggers.”
The question, he says, is whether industry or taxpayers will foot the bill for clean-up and the workers to complete it.
The public purse has increasingly funded well clean-ups, including provincial government loans to Alberta’s Orphan Well Association (an industry-funded group tasked with remediating sites with no owner), and a billion-dollar well-reclamation program funded by Ottawa in 2020.
As Canada moves to diversify its energy sector to drive down emissions and help meet climate change goals, critics say governments have largely ignored the question of how workers will switch from well-paying oil and gas jobs to working on emerging fuels and technologies.
The Alberta government counters that its Jobs Now program will help train people to work in the province’s growing technology sector, and argues oil will continue to be a significant source of employment.
Analysis released this month by Clean Energy Canada presents another opportunity. It found that clean energy could create up to 208,700 new jobs by 2030 – vastly outpacing the 125,800 it projects will disappear from the fossil fuel sector.
However, executive director Merran Smith cautions that a smooth transition will require detailed energy worker transition action plans.
“I don’t think that any governments – federal or provincial – are really focusing on that worker transition piece,” she said in an interview.
A plan is key to building support for the energy transition, she said, to make sure Canadians “can see that workers and families aren’t being left unemployed and hung out to dry; that they are being supported.”
While many in the oil and gas sector point out there will be global demand for fossil fuels for decades to come, most acknowledge the global energy sector is indeed diversifying.
Kevin Krausert, himself a former oil rig worker, is chief executive and co-founder of Avatar Innovations in Calgary, which recently launched an industry-backed accelerator program. Run in partnership with the University of Calgary, participants from the energy sector create and de-risk new technologies that will play a key role in achieving net-zero targets.
The industry is already rich with the skills Canada needs to pursue low-emission solutions, he says – efficiency, adaptability, resilience, creative problem-solving.
“Even in a $100-oil scenario, jobs don’t come back like they have in the past, and to somehow suggest we’re just going to retrain everyone to be a software developer is ridiculous,” he says.
“We need to take their skills ... and apply them to the emerging technologies that are going to be required in a net-zero future.”
One of Avatar’s partners is Suncor Energy Inc. Martha Hall Findlay, the company’s chief sustainability officer, doubts the energy transition will result in a wholesale evaporation of jobs. After all, she says, an awful lot of transitions to cleaner technology in the oil sands have already taken place, and “people are still very, very much employed.”
Whatever happens, she says collaboration is key.
“I’m not a big fan of, ‘Let’s just throw a bunch of money at this.’ Let’s be really smart about it,” she says. “When you have academic institutions or training institutions and governments and private industry all saying, ‘Hey, we need to get from here to there,’ it’s incredibly powerful.”
Non-profit Iron & Earth – formed by, and for, oil and gas workers with the energy transition in mind – is already running upskilling programs and to help people figure out their next steps. It will soon release a new career portal with a mentor program, too, with an easy-to-navigate system for oil and gas workers to figure out how their skills are transferable and what else they can do.
“It’s really empowering for fossil fuel industry workers to be seeing that although there have been job losses in the industry, that there are opportunities growing in the renewable energy sector,” says executive director Luisa Da Silva.
“People just feel like they’re going to be left behind. We’re trying to bridge that.”
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