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Alberta

Premier Smith issues statement on rehabilitating orphan wells

Published

2 years ago

4 minute read

Rehabilitating problematic oil and gas sites: Statement from Premier Smith

Premier Danielle Smith issued the following statement in response to inaccurate claims about the government’s ongoing efforts to rehabilitate Alberta’s oldest and most problematic oil and gas development sites, many of which have flare pits, sumps and other environmental hazards that must be cleaned up promptly:

“Of the approximately 83,000 inactive wells in Alberta, approximately 20,000 were drilled before 1980 and have been inactive for more than 20 years. The number and potential environmental problems posed by these older well sites worsen with time. For example, the number of orphaned wells surged from approximately 705 in 2015 to 5,279 in March 2019, a staggering increase of approximately 648 per cent during that time frame. This failure has led to an environmental hazard for which they provide no realistic solutions to address.

“In response to that failure, the government has introduced regulations mandating oil and gas companies spend a prescribed minimum amount on well site closure and reclamation work. The minimum amount to be spent by industry on this ongoing cleanup work has grown to about $740 million this year and will increase by nine per cent annually in the coming years. This action will fix the orphan well backlog that previous governments failed to address and continue to ignore today.

“In addition, Minister of Energy Peter Guthrie is consulting with landowners, Indigenous groups and industry to design a rehabilitation pilot program to expeditiously clean up these pre-1980 inactive well sites. This consultation process will take several months to complete, after which the cabinet and government caucus will consider the feedback provided and make a final decision on whether and how to proceed with the program.

“The pilot program under consideration would potentially provide a royalty credit on new oil and gas development for energy companies willing to also invest in cleaning up these problematic well sites. The amount spent on cleaning up these sites would have to be over and above the amount these same companies are legally required to spend on regular well site rehabilitation.

“While final decisions have not been made, the total amount of royalty credits proposed to be used for the pilot program is likely to be up to $100 million over three years – after which time, the government would assess the effectiveness of the program and consult again before deciding how best to proceed. It is hoped the pilot program will greatly accelerate the cleanup of the most unpredictable and challenging oil and gas sites in Alberta.

“Bluntly put, these problematic well sites must be promptly and properly cleaned up. The government is designing a pilot for a program that is good for the environment, respects landowners’ rights and the rights of Indigenous groups, and incentivizes industry to simultaneously invest more in both the cleanup of these well sites and new resource development.

“This is the first government to try to find solutions to this problem and we look forward to the results of the consultations.”

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This is a news release from the Government of Alberta.

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Alberta

Big win for Alberta and Canada: Statement from Premier Smith

Published on April 2, 2025

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Premier Danielle Smith issued the following statement on the April 2, 2025 U.S. tariff announcement:

“Today was an important win for Canada and Alberta, as it appears the United States has decided to uphold the majority of the free trade agreement (CUSMA) between our two nations. It also appears this will continue to be the case until after the Canadian federal election has concluded and the newly elected Canadian government is able to renegotiate CUSMA with the U.S. administration.

“This is precisely what I have been advocating for from the U.S. administration for months.

“It means that the majority of goods sold into the United States from Canada will have no tariffs applied to them, including zero per cent tariffs on energy, minerals, agricultural products, uranium, seafood, potash and host of other Canadian goods.

“There is still work to be done, of course. Unfortunately, tariffs previously announced by the United States on Canadian automobiles, steel and aluminum have not been removed. The efforts of premiers and the federal government should therefore shift towards removing or significantly reducing these remaining tariffs as we go forward and ensuring affected workers across Canada are generously supported until the situation is resolved.

“I again call on all involved in our national advocacy efforts to focus on diplomacy and persuasion while avoiding unnecessary escalation. Clearly, this strategy has been the most effective to this point.

“As it appears the worst of this tariff dispute is behind us (though there is still work to be done), it is my sincere hope that we, as Canadians, can abandon the disastrous policies that have made Canada vulnerable to and overly dependent on the United States, fast-track national resource corridors, get out of the way of provincial resource development and turn our country into an independent economic juggernaut and energy superpower.”

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Alberta

Energy sector will fuel Alberta economy and Canada’s exports for many years to come

Published on April 2, 2025

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From the Fraser Institute

By Jock Finlayson

By any measure, Alberta is an energy powerhouse—within Canada, but also on a global scale. In 2023, it produced 85 per cent of Canada’s oil and three-fifths of the country’s natural gas. Most of Canada’s oil reserves are in Alberta, along with a majority of natural gas reserves. Alberta is the beating heart of the Canadian energy economy. And energy, in turn, accounts for one-quarter of Canada’s international exports.

Consider some key facts about the province’s energy landscape, as noted in the Alberta Energy Regulator’s (AER) 2023 annual report. Oil and natural gas production continued to rise (on a volume basis) in 2023, on the heels of steady increases over the preceding half decade. However, the dollar value of Alberta’s oil and gas production fell in 2023, as the surging prices recorded in 2022 following Russia’s invasion of Ukraine retreated. Capital spending in the province’s energy sector reached $30 billion in 2023, making it the leading driver of private-sector investment. And completion of the Trans Mountain pipeline expansion project has opened new offshore export avenues for Canada’s oil industry and should boost Alberta’s energy production and exports going forward.

In a world striving to address climate change, Alberta’s hydrocarbon-heavy energy sector faces challenges. At some point, the world may start to consume less oil and, later, less natural gas (in absolute terms). But such “peak” consumption hasn’t arrived yet, nor does it appear imminent. While the demand for certain refined petroleum products is trending down in some advanced economies, particularly in Europe, we should take a broader global perspective when assessing energy demand and supply trends.

Looking at the worldwide picture, Goldman Sachs’ 2024 global energy forecast predicts that “oil usage will increase through 2034” thanks to strong demand in emerging markets and growing production of petrochemicals that depend on oil as the principal feedstock. Global demand for natural gas (including LNG) will also continue to increase, particularly since natural gas is the least carbon-intensive fossil fuel and more of it is being traded in the form of liquefied natural gas (LNG).

Against this backdrop, there are reasons to be optimistic about the prospects for Alberta’s energy sector, particularly if the federal government dials back some of the economically destructive energy and climate policies adopted by the last government. According to the AER’s “base case” forecast, overall energy output will expand over the next 10 years. Oilsands output is projected to grow modestly; natural gas production will also rise, in part due to greater demand for Alberta’s upstream gas from LNG operators in British Columbia.

The AER’s forecast also points to a positive trajectory for capital spending across the province’s energy sector. The agency sees annual investment rising from almost $30 billion to $40 billion by 2033. Most of this takes place in the oil and gas industry, but “emerging” energy resources and projects aimed at climate mitigation are expected to represent a bigger slice of energy-related capital spending going forward.

Like many other oil and gas producing jurisdictions, Alberta must navigate the bumpy journey to a lower-carbon future. But the world is set to remain dependent on fossil fuels for decades to come. This suggests the energy sector will continue to underpin not only the Alberta economy but also Canada’s export portfolio for the foreseeable future.

Jock Finlayson

Senior Fellow, Fraser Institute
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