Alberta hired law firm to collect millions in oilsands debts but won’t say whether bills were paid

Over the past five years, at least 19 invoices totalling about $3.27 million have gone unpaid by companies operating in Alberta’s oilsands

Alberta Premier Jason Kenney’s United Conservative Party government has paid more than $100,000 to an Edmonton-based law firm to chase after delinquent oilpatch operators that owe the federal and provincial environment departments millions of dollars.

Over the past five years, at least 19 invoices totalling about $3.27 million have gone unpaid, according to documents released under a Freedom of Information request.

The provincial government is supposed to be collecting the fees as part of a joint program with the federal government to monitor environmental impacts of oilsands development. The program was created in 2012 in response to international criticism about a lack of oversight of Alberta’s oilpatch, which contains the world’s third largest reserve of crude oil after Saudi Arabia and Venezuela, according to the Canadian government.

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Athabasca Chipewyan First Nation Chief Allan Adam, who represents a community in the heart of the industrial region of Northern Alberta, said the unpaid bills are another sign that government officials allow companies to break the rules and put communities at risk.

“How come they are not pulling the licence of the ones that are being bad about not paying their fair share?” he asked in an interview with The Narwhal.

“They’ve been getting away with it for too long,” he said of the companies.

In the spring of 2020, there was another example of what Adam had described as weak industrial oversight. At that time, he had criticized the Alberta government for temporarily weakening environmental regulations for all oil and gas companies after the industry had asked for relief during the coronavirus pandemic.

Alberta oilsands debts shrouded in secrecy

Details about the unpaid fees and the debt collection contracts are shrouded in secrecy.

There was no open competition or public bidding for any of the three contracts awarded by Alberta to Witten LLP, the law firm hired to collect the unpaid fees, according to a provincial website that lists sole-source contracts. Each fee-collection contract was worth $35,000. The provincial Justice Ministry awarded the first two contracts to the law firm in March 2020 and it awarded a third contract to Witten LLP in March 2021.

Under the Environmental Protection and Enhancement Act, oilsands developers are billed and pay into an annual fund of about $50 million that covers environmental monitoring costs. In addition to loosely outlined parameters for debt collection, the law states that failure to pay within 45 days of assessment means companies are subject to a 20 per cent penalty that could be waived by the minister.

The Narwhal was unable to determine whether any company faced a penalty for unpaid fees. Alberta’s Ministry of Environment and Parks, which oversees the environmental monitoring of the oilsands in conjunction with Environment and Climate Change Canada, did not respond to repeated emails and phone calls requesting comment. The federal department responded to The Narwhal but declined to comment.

About 50 different companies were billed under the monitoring program between 2016 and 2021, according to the documents obtained by The Narwhal. Alberta censored the individual amounts charged and owing and it’s unclear which businesses are in bad standing.

The two contracts awarded to Witten LLP in March 2020 were to collect unpaid fees for fiscal years 2017-18, 2018-19 and 2019-20. The Freedom of Information request, made in January 2021, continued to show outstanding invoices for those years. 

Alberta also refused to release copies of its contract or contracts with Witten LLP, in response to separate requests under Freedom of Information legislation, even censoring details about the contracts that were posted on its published list of sole-source contracts.

Witten LLP also did not respond to email and phone messages seeking comment.

Official Opposition environment critic Marlin Schmidt said he doesn’t think the government is doing enough to hold the operators to account. 

“The government, I don’t think, is pursuing these bill collections wholeheartedly,” said Schmidt, a scientist with expertise on groundwater contamination who now represents the provincial riding of Edmonton-Gold Bar for the NDP. 

“I think that the tools are there, it’s just the government needs to show a willingness to use them.”

While the public listing of sole-source provincial contracts did not identify which companies were delinquent in 2020, a third contract awarded to Witten LLP in March 2021, singled out Surmont Energy for not paying its fees.

Surmont Energy is an in-situ operation headquartered in Calgary. In an email to The Narwhal, the company’s acting CEO Rick Orman wrote that when he took the helm in April 2021, he “immediately set in motion discussions … to make arrangements for paying outstanding fees.”

Orman added that Surmont reached an agreement in September with administrators of the monitoring program “to the satisfaction of both parties,” but he didn’t reveal details.

Orman previously sat on Surmont’s board of directors but did not respond to a question about whether the board should have been aware of the unpaid fees.

Scientists skeptical about industry involvement

The monitoring program’s annual budget was rolled back amid the pandemic from about $50 million to $44 million for 2020-21. The Canadian Press reported much of the cutback was due to pandemic restrictions that resulted in a shortened season of fieldwork. For 2020-21, the governments agreed there would be no monitoring of the main branch of the Athabasca River, even as the province entertained a proposal to release water from the industry’s chemical-filled tailings ponds.

Two scientists who contributed to the oilsands monitoring program in its early days echoed the concerns of Adam, from Athabasca Chipewyan First Nation, about the unpaid fees. They suggested the failure to collect fees is a sign the industry has too much control over the program.

Air quality management consultant David Spink participated in some of the discussions about the program’s design soon after he retired from a job as a public servant at the Alberta Environment Ministry. He said he had some trepidation about companies’ involvement early on.    

“Of course we need industry at the table,” Spink said in an interview. “I think they should be there because we need their perspective.

“But my view is the federal and provincial governments, particularly the provincial government, is paying too much attention to the concerns of industry and not enough attention to the monitoring needs from a scientific standpoint and the monitoring needs in terms of addressing the issues and concerns of the Indigenous people who are up there.”

Jeff Brook, a former Environment Canada scientist, suggested in a separate interview that the program has prioritized efforts to boost the industry’s public image instead of improving environmental oversight. He added, “it just seems kind of ludicrous” to be holding a hat out to industry to ensure governments can protect the environment.

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