Alberta laid out new rules for wind, solar power. Some say it should do the same for oil

December 16, 2024 Canuck

When Dwight Popowich walks to the middle of his alfalfa field, he sees an inactive oil well on his land that he says is in “shambles.”

He’s envious of the new Alberta regulations placed on wind and solar energy projects, rules he wishes also applied to oil and gas development in the province.

Popowich, who receives about $2,500 a year to have it on his farmland, said it’s not worth the time he’s spent waiting to have it cleaned up. He said it was drilled on his land near Two Hills, Alta., in about 2008 but has been an issue for the past eight years.

“Albertans have made it very clear that they want development of their oil and gas but done safely and in a responsible manner,” he said.

Popowich is not alone. The Alberta Energy Regulator (AER), which oversees the energy and mineral resource sector, reported earlier in December that more than $1 billion was spent last year on closing and reclaiming inactive wells.

An oil well in a field — Dwight Popowich says the oil well on his land was drilled in 2008 but has been a nuisance for him for the past eight years. (Submitted by Dwight Popowich)

Those efforts barely made a dent. There are still billions of dollars worth of inactive wells in waiting.

After a seven-month moratorium on new wind and solar projects, the government of Alberta laid out new regulations earlier this month to manage wind and solar energy sources in the province, but the oil sector is not policed by the same rules.

Oil and renewable energy reclamation

Three major regulatory changes were announced earlier this month surrounding land reclamation bonds, visual impact assessments and agricultural land assessments for renewable energy.

Beginning Jan. 1, new amendments to provincial government policy will mandate renewable energy developers set aside a security or bond to restore the land when the project is done. That lays out a safety net for property owners negotiating with those developers.

Right now, there is no requirement for oil companies to provide a form of deposit upfront to ensure cleanup is managed at its end. But there is an industry-funded Orphan Well Association (OWA) that is tasked with taking care of wells without an owner. If a company goes bankrupt, for example, the cleanup task can fall to the OWA.

That issue is made more complicated by the Surface Rights Act, which allows the right of entry onto land in Alberta to drill for oil, though there is compensation for it. That right-to-entry privilege is a major difference between the two sectors.

Landowners have to allow oil drilling on their land and are paid annually until the site has been reclaimed, which is the final step in the cleanup process.

In comparison, renewable energy projects are at the landowner’s discretion and have been referred to by some as a “buyer beware” negotiation.

Until now, the negotiation fee and the cleanup guarantee have been up to the landowner. The Alberta Utilities Commission says there is no sister to the Orphan Well Association that takes care of renewable energy developments left behind if a company goes bankrupt.

a map with circles in certain sections and a buffer zone on the western edge. — This map shows where wind projects will be prohibited and where wind and solar projects will need assessments to be build. The goal is to maintain the province’s ‘pristine viewscapes.’ (Government of Alberta)

Cleaning up behind them

In November 2022, the Rural Municipalities of Alberta voted to ask the Alberta government to develop policy that protected agricultural land from renewable projects and mandated that cleanup fee.

“It’s not a bad thing for the province to be forcing some of these impacts that emanate from energy development to be addressed. The problem is that they’re only imposing it on one sector of that industry,” said Shaun Fluker, a law professor at the University of Calgary who focuses on energy.

Fluker said the AER doesn’t require oil companies to cut through the same red tape now wrapped around renewable energy projects.

In Fluker’s experience, the regulator rarely imposes the security costs on oil developments.

But the regulator has the discretion to mandate those, the AER told CBC News in an email, and it is phasing in a new way to determine when to require security deposits and how much it should cost.

CBC News asked the Alberta government if it would be mirroring the new rules for the oil and gas sector.

“We continue exploring ways to improve reclamation and liabilities across the energy industry to support responsible development, sustainably conserve the environment and keep growing the economy,” Ministry of Environment press secretary Ryan Fournier said in an email. “Unlike the renewable sector, Alberta already has extensive regulatory requirements for oil and gas facilities, including rules around security and reclamation.

“However, there were previously no regulations requiring security for any renewable energy projects except geothermal. This was not fair, ineffective and placed landowners and future generations at risk.”

Blocking agriculture and sky

Other changes to renewable projects were implemented Dec. 6, on the day of the government’s announcement.

Developers planning wind or solar power plant projects on “high-quality” agricultural land — which is graded in classes based on aspects like the landscape, soil and climate — will have to pass an impact assessment. That assessment will consider aspects like how the build is expected to affect a farm’s productivity.

That mandate is alongside a requirement to assess how the project could affect farmland irrigation.

If the renewable energy development is within certain areas, the operator will need to complete a visual impact assessment to ensure it’s not obstructing the province’s “pristine viewscapes.”

An abandoned oil well awaiting removal. Critics say the number of orphaned and abandoned wells is growing faster than resources to clean them up. (Orphan Well Association)

Buffer zones have been designated specifically as no-go zones for new wind projects, but they can be reviewed for use by other electricity developments.

In an email to CBC News, the AER said it does not mandate visual or agricultural impact assessments for oil and gas projects but it does enforce policy to minimize environmental impacts.

Impact on agriculture, scenery

CBC News contacted government officials in the other Prairie provinces, Saskatchewan and Manitoba, about their impact assessment policies.

In Saskatchewan, there are no visual or agricultural impact assessments and no financial assurances for renewable projects, according to a spokesperson with the ministry of environment. Instead, there are wildlife and environmental assessments, depending on the project.

In Manitoba, there are environmental assessments for different classes of development, but no absolute restrictions on where renewable projects can be built, according to a provincial spokesperson.

Fluker said the visual impacts from developments can be subjective, but he said landowners in Alberta have long raised concerns about the loss of land.

According to a study from the Pembina Institute, a clean energy think-tank based in Calgary, conventional oil and gas is 125 times more land intensive than wind and solar development.

Some critics of the new regulations have voiced frustration with how the government stopped short of forcing the oil and gas sector to abide by the same regulations.

Others do not see it as necessary.

Oil, gas regulations already strong

Daryl Bennett is a director of the Action Surface Rights Association and the Alberta Surface Rights Federation who also represents landowners in their negotiations or grievances with energy companies.

He believes the oil and gas sector should not match the regulations for renewable energy.

“I’m not saying the oil and gas situation can’t be improved. I’m saying it already has greater protections than the renewable energy had,” said Bennett.

Bennett says the oil and gas industry already has land reclamation security through orphan well levies, licence liability ratings and the Orphaned Well Association. He says landowners won’t be responsible for wells on their land.

“It might not be in a timely manner, but with renewable projects it’s the Wild West out there. Many of these landowners are signing surface lease agreements that had no reclamation security requirement whatsoever,” he said.

If a renewable energy developer is not contractually obligated to clean up, Bennett said the build could bankrupt a landowner, financially burden a municipality or become a safety issue.

Tough comparison

Jorden Dye is the director of the Business Renewables Centre-Canada (BRCC), which is an initiative of the Pembina Institute.

The BRCC works with large corporations that want to purchase renewable power, including oil and gas companies, and the renewable energy developers who build those projects.

Dye says it’s too early to tell how drastic the impact from land reclamation security will be on energy companies because the specifics will be released in a code of practice in the new year.

He said there are also issues with comparing the two resource sectors.

An SUV drives along, with the backdrop of wind turbines in a field, and the snow-peaked Rockies behind. — Jorden Dye of the Business Renewables Centre-Canada says there are distinct differences between the two developments that make cleanup more complicated. For oil, the resource is depleted, whereas for solar and wind projects, it is not. (Jeff McIntosh/The Canadian Press)

For one, the end of an oil or gas well’s life depends on how much of the resource is available, compared with a renewable energy project, which is determined by the lifespan of the structure material. There’s potential for it to be rebuilt or adapted rather than permanently torn down.

“The resource is still there; the wind is still blowing, the sun is still shining,” he said.

Beyond that, he said comparing the two is difficult because they can also work in tandem.

A large portion of renewable energy deals made through the centre came from oil and gas companies, so renewable energy regulations could still fall on them.

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