21 Mar Oil and gas well site reclamation, polluter pays and pie crust promises
As was reported last week, a large chunk of change is being sought by the Petroleum Services Association of Canada from the federal government to bolster economic activity around reclamation of well sites in Alberta and Saskatchewan. This, as I have noted in the past, is not in line with the polluter pays principle and, while attractive in this economic downturn, reflects a fundamental problem with how we manage the large number of unreclaimed well sites in Alberta. Throwing public money at the problem (either directly or through tax breaks) is a convenient approach but it is also likely to allow a broken system to be perpetuated.
A core aspect of an effectively applied polluter pay principle is that the price signals attract investor and managerial attention and in turn drive due diligence in how we pursue our environmental management on a site by site basis and how we decide whether an acquisition of other property (or well) should proceed. Throwing public money at the problem undermines this site specific drive to do better.
In the meantime we, as a society continue under rules that appear to be, as Mary Poppins (both my daughters love her) would call it, “pie crust promises; easy to make, easy to break”. We are assured that polluters will pay for the pollution they release into the environment and yet all too often the promise appears all too easy to break: insufficient financial security up front, insolvency laws which favour other creditors over environmental cleanup orders, and a lack of regulatory timelines on reclamation (which I would argue could also drive due diligence and minimize risks to the public purse) all reflect a system that needs fewer promises and more concrete action.
Frankly, with the “ask” of $500 million I was reminded again of Mary Poppins as I may have looked like the character of Michael Banks [below].
Not because the money is a large sum (I suspect the nature of the problem demands more), not because I don’t believe the money would support jobs and the economy; but because we need to tackle this issue with regulations — the market approach has clearly failed, and undoubtedly will continue to do so. We need to address it soon or we are likely to find ourselves just hiring another nanny to solve our problems. (Even Mary Poppins’ magic isn’t sufficient to clean up Alberta’s unreclaimed sites).