An abandoned asbestos mine in a remote corner of Yukon has yet to be remediated 42 years after closing, and could pose a flood risk to anyone downstream, according to the federal government.

“Clinton Creek is literally on the edge of the map,” said Lewis Rifkind, mining analyst for the Yukon Conservation Society. The mine is on the western border of Yukon, about 100 kilometres northwest of Dawson City. “It’s out of sight, out of mind.”

Clinton Creek Mine opened in 1967 and is the only mine on record in the territory to extract asbestos — a mineral often used in construction materials, such as insulation, and fire-proof coating, until it was found to cause cancer when its microscopic fibres are breathed in. Asbestos gradually ceased to be used in the 1970s, though its use was only banned by the federal government in 2018. 

Yukon’s former open-pit asbestos mine was decommissioned in 1978 by its then-owner Cassiar Asbestos Corporation.

“That mine was developed way before environmental assessments or economic impact agreements, anything,” Rifkind said. “It’s just there.” 

A sign posted at the Clinton Creek Mine site by the Government of Yukon.

The road to Clinton Creek dead-ends at the mine site, about 12 kilometres from the Forty Mile River, which pours into the Yukon River. The abandoned mine gets less attention than others in the territory such as Faro, a former zinc and lead mine — once the largest in the world — which is just 15 kilometres north of the town of the same name. Plans for remediation are much further along at Faro, having been submitted to the environmental assessment board, and anticipated to start in 2024. The cleanup is expected to take around 15 years and cost about $500 million in federal money. 

There’s currently no start date for reclamation work at Clinton Creek, since there’s no plan in place, Sue Thomas, a spokesperson with Yukon’s Department of Energy, Mines and Resources said in an email.

The federal government states an expected start-date for reclamation work in 2026 through its northern abandoned mine reclamation program. The work is expected to take four years. The federal government also expected a conceptual remediation plan to be completed this spring, but it is not yet available.

The Tr’ondëk Hwëch’in First Nation, on whose territory Clinton Creek is located, the Yukon and Canadian governments, are in the process of developing that remediation plan, but the site remains a risk of uncertain degree until that work is underway. A spokesperson for the Tr’ondëk Hwëch’in was not available by publication time.

The Yukon government has notified the public to stay away from Clinton Creek for years. The ground is unstable, with waste rock and tailings throughout. There’s a risk of inhaling asbestos, and the site is susceptible to “extreme” flash floods. 

This is worrying for the nearest community downstream of Clinton Creek: Eagle, Alaska — some 40 kilometres away.

The community of roughly 120 people along the Yukon River is launching a water sampling study in the coming weeks. The study is not being undertaken specifically to identify possible environmental effects of Clinton Creek, Chief Karma Ulvia told The Narwhal, but it could provide a better understanding of the levels of asbestos in the water, as well as metals. 

“The asbestos can blow in the air, so of course that can get in the river, which can get in the fish,” Ulvia said. “It definitely can pollute the river. We would be very interested in helping to get it cleaned up. For me, I’m concerned about our people, the fish, our subsistence way of life.”

What happened at Clinton Creek Mine?

In Clinton Creek’s lifespan, 940,000 tonnes of asbestos were mined, according to a report by the Dawson Regional Planning Commission, which is in the process of drawing information together to eventually establish a land use plan in the region.

In 1974, the slope of the mine’s waste rock dump failed, pouring 60 million tonnes of waste rock and tailings into Clinton Creek valley, blocking Clinton Creek, according to the report. The dam that resulted from that slide created a 25-metre-deep artificial lake that remains today. The sprawling 115-hectare Hudgeon Lake runs the risk of flooding under heavy rain or snowfall. After several failed attempts to control overflow from the lake, in 2002, the Yukon government had a channel built from Hudgeon Lake over the waste rock dam, and fortified the entrance to Clinton Creek to limit erosion. The hope is to prevent a full breach of the dam that could empty the lake, sending 500 cubic metres per second of potentially contaminated water down to Forty Mile River. 

Despite work to restabilize the channel, there is a continued risk that Hudgeon Lake could overflow as the spring freshet gets more pronounced every year, Rifkind said.

“If you have a lot of water going into that lake you could get erosion issues on the channel,” he said. “Once a channel starts to erode, you could get a catastrophic failure. Impacts downstream would be unknown.”

Some remediation work at the site was completed by the former mine owner, but a full remediation agreement between Cassiar and the federal government was never reached, according to a report on remediation options for Hudgeon Lake. 

Blasting during operations at Clinton Creek. Photo: Peter Kosel

Workers at Clinton Creek mine. Photo: Peter Kosel

Cassiar, which also operated an asbestos mine and now-abandoned mining town of the same name in B.C. near the Yukon border, was purchased by Princeton Mining Corporation in 1991 and went bankrupt in 1992. A decade later, the federal government sent a directive to the former owners of the company to stabilize the channel, which went unanswered. The site was then labelled abandoned. 

In 2003, the Yukon government took over care and maintenance of the Clinton Creek site, working on water diversion, geotechnical stability and environmental monitoring — funded by the federal government, who permitted the mine in the first place.

“Upgrades completed at site thus far have been aimed at stabilizing sections of the Clinton Creek channel that are susceptible to erosion during high flow events,” Thomas of Yukon’s Department ofEnergy, Mines and Resources said.

The Yukon government issued an order in council in 2006 prohibiting the staking of new mineral claims across the majority of the Clinton Creek Mine site, to allow for the reclamation of damages already incurred there.

Public access to the site was restricted in 2012 because of a threat to human health and safety. A bevy of signs are posted along the road leading to the site, notifying the public of the risks should they enter.

Moving forward with reclamation

Last August, the federal government earmarked $2.2 billion over 15 years for remediation projects at eight sites in Yukon and the Northwest Territories, including Clinton Creek and Faro. According to a spokesperson with Crown-Indigenous Relations and Northern Affairs Canada, the portion dedicated to Clinton Creek has not yet been determined as the site remediation plan is still in development.

Earlier this year, the Yukon government commissioned a report on potential options for remediation of Clinton Creek to help develop a plan that will be made public once submitted to the Yukon Environmental and Socio-economic Assessment Board, according to the federal spokesperson. It’s unclear when exactly that will happen.

The main concerns right now surround habitat disruption prompted by sheer volumes of water released downstream should heavy levels of precipitation and snowmelt swell Hudgeon Lake. 

Abandoned equipment at the Clinton Creek mine site in 2012.

The federal government also recognizes such flooding poses a risk to anyone downstream — such as the people of Eagle.

The community experienced severe flooding in 2009, Ulvia said, noting the entire area is prone to the phenomenon.

“We lost our lower village,” she said, adding that she wonders how Clinton Creek may have contributed to the event.

But acid rock drainage and metal leaching at the site are not present concerns, Thomas said. And the department has tested asbestos levels in water at the mine site.

“From an aquatic habitat perspective, asbestos does not appear to be any more harmful than other types of suspended sediment,” Thomas said.

The Government of Canada doesn’t have guidelines for acceptable levels of asbestos in drinking water because there “is no consistent, convincing evidence that ingested asbestos is hazardous.”

But impacts downstream are ultimately unknown, Rifkind said, because they haven’t been studied to the degree they should be.

“If a lot of the issues were remediated, they wouldn’t necessarily go away, but we’d have a greater understanding and know better how to deal with it.”

Update June 24, 2020 at 9:20 a.m. PST: This story was updated to include information provided by a spokesperson with Crown-Indigenous Relations and Northern Affairs Canada that a specific portion of the funding for remediation programs in the North has not yet been determined for Clinton Creek Mine as a remediation plan for the site has not been completed.

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As Alberta doles out $1 billion in federal money to ensure oil and gas wells across the province are safely sealed and eventually cleaned up, we started wondering about the elephant in the room: the cleanup of the oilsands.

While the liabilities associated with oil and gas wells are substantial, there are more cleanup costs on the horizon.

The oilsands industry has been hit hard in recent months, with a global supply glut and reduced demand as a result of the COVID-19 pandemic. For a while, oil prices were even negative.

But the pressures on the oilsands have been ongoing for several years now, and low commodity prices have led to questions about the long-term profitability of the industry.

At the end of the day, all those mines (and their tailings ponds) legally have to be cleaned up. The big question is: who’s going to end up paying for it?

Read on.

How much will it cost to clean up the oilsands?

The Alberta Energy Regulator tracks the estimated cost of reclaiming coal and oilsands mines in the province using its mine financial security program, based on figures submitted by industry.

A spokesperson for the regulator confirmed in November 2020 that the most recent estimate of total liabilities associated with oilsands mines in that program is $30.81 billion.

But not everyone is confident these estimates fully capture the cost of cleanup once the resources are tapped.

“It’s almost impossible to [estimate the liabilities] because no one has a clear sense of what it’s going to cost,” Martin Olszynski, an associate professor of law at the University of Calgary, told The Narwhal. “It’s never been done before.”

And then there’s the risk the cleanup technologies oilsands companies are betting on won’t work.

“It’s really difficult to know whether those estimates reflect the risk of things not performing as expected,” Nina Lothian, the director of the fossil fuel program of the Pembina Institute, told The Narwhal.

And, as has been frequently reported, even senior staff within the regulator’s office have had their doubts.

In 2018, a team of journalists working on the Price of Oil series revealed internal documents from the Alberta Energy Regulator that pegged the total liabilities of mining to be $130 billion — far higher than the figures the regulator had long been sharing with the public.

Facing public outcry, the regulator attempted to distance itself from its internal estimates, saying the figures “were based on a hypothetical worst-case scenario.”

Those same internal documents showed the estimated tab for the total cleanup of the industry to be $260 billion, once wells and pipelines were added to the equation. 

Is there a system to make sure companies have the money to pay for cleanup?

In theory, the mine financial security program, essentially a deposit system administered by the Alberta Energy Regulator, is supposed to ensure that companies put aside funds to pay for cleanup down the road.

But according to figures a spokesperson for the regulator confirmed to The Narwhal, the amount currently held in deposits is nowhere near the total cost.

As of September 2020, the most recent data available, the regulator held $939 million in securities from oilsands mining companies. 

That’s just three per cent of the industry-generated estimates of total liabilities associated with the oilsands — and less than one per cent of the internally estimated liabilities.

Other jurisdictions have moved to avoid this potential cash shortfall in the long term. Both Quebec and Yukon, for example, require mine operators to set aside money for cleanup in full prior to getting started.

In Alberta, the base deposit required ranges from $30 to $60 million. For comparison, the recently scrapped proposal to build the Teck Frontier mine pegged the cost at $20 billion. That would add up to a deposit worth approximately 0.1 per cent of the cost to build the new mine.

Remind me what an oilsands mine actually is?

Oilsands mines are the huge, strip-mined swaths in the boreal forest for which Alberta’s energy industry has become widely known.

They account for 97 per cent of Canada’s proven oil reserves, according to Natural Resources Canada.

The oil produced there also makes up the majority of Canada’s total oil production — 63 per cent in 2019, or 2.95 million barrels per day.

But not all oil from the oilsands comes from the open-pit mines that everyone has seen photos of (even from space). Open-pit mining accounts for half of production. The rest comes from something known as in-situ production, which involves injecting steam deep into the ground via wells.

There are seven oilsands mines operating in northern Alberta right now. According to the Canadian Association of Petroleum Producers, the active mining areas of these sites combined is around 1,030 square kilometres — roughly the size of the City of Calgary.

Cleaning up those seven mines is what could amount to $130 billion.

Open-pit mining in the Alberta oilsands requires digging up boreal forest in order to extract vast quantities of bitumen. Photo: Louis Bockner / Sierra Club BC

What in particular costs so much to clean up in the oilsands?

Two words: tailings ponds. 

“The tailings problem is the most pernicious and the most difficult,” Olszynski told The Narwhal. “The water issues are the main hurdle.”

Canada’s Ecofiscal Commission, founded by a group of Canadian economists, concluded in July 2018 that “tailings from oilsands represent the province’s largest environmental liability.”

The tailings ponds in Alberta’s oilsands are huge, spanning some 220 square kilometres total, nearly twice the size of Vancouver. So far, more than a trillion litres of tailings — a mixture of waste water, clay, sand and petrochemical residues — have been stored in them.

The mixture in tailings ponds can be highly toxic, and has been known to contain arsenic, benzene, lead and mercury.

Environmental Defence advocates against the creation of any new tailings ponds in the oilsands “until industry successfully demonstrates that it is capable of properly reclaiming them.”

And therein lies the problem, according to experts.

Tailings ponds in Alberta’s oilsands. Louis Bockner / Sierra Club BC

What exactly is so difficult about cleaning up tailings ponds?

Two words come up time and time again when talking about technologies to reclaim tailings ponds, whether it’s from concerned stakeholders, scientists or the regulator itself: “unproven” and “unknown.”

“We haven’t figured out solutions today that we’re confident are going to create landscapes that are going to be self-sufficient and self-sustaining tomorrow,” Lothian of the Pembina Institute, told The Narwhal.

Currently, one preferred technology is known as water capping. In this method, tailings are pumped into an old mine pit and “capped” with a layer of fresh water to create an artificial lake. The idea is that the heavier tailings are trapped deep below the surface of the freshwater.

“It’s got some long-term unknowns about what happens to the quality of your water cap [and] could those tailings become resuspended and contaminate the water,” Lothian said.

Syncrude, one of the major players in the oilsands, says on its website that water capping results in lakes that “will evolve into natural ecosystems and, over time, support healthy communities of aquatic plants, animals and fish.”

“There has been a lot of investment … a lot of smart people are trying to figure out this challenge,” Lothian added.“There are just a lot of unknowns about the performance of tailings treatment over time.”

Syncrude’s first attempt, Base Mine Lake, was created in 2012. The project involves 20 years of monitoring “to demonstrate that the lake is developing into a viable ecosystem and to prove that this technology can be used on other oilsands leases,” according to the company.

But not everyone is so optimistic the technology will pan out — and many have raised concerns that other technologies might end up being even costlier.

Olszynski calls it “super experimental.”

“Frankly, it’s very hard to get a very sober objective analysis of how [Syncrude’s Base Mine Lake] is doing and whether it will succeed,” he said.

“We need a sober assessment of what exactly are the prospects for any kind of innovation: What are the costs? What are the alternatives? What’s the backup plan?” he said.  

“There’s no guarantee that they’ll figure it out.”

Residual bitumen on a wastewater pond at a tailings treatment plant at the Shell Albian Sands site in 2014. Photo: Julia Kilpatrick / Pembina Institute.

What financial shape is the oilsands industry in now?

For years, the oilsands industry was riding on a high, so to speak, in the wake of the $100-per-barrel oil prices seen six years ago.

But those prices haven’t been around for a while. Prices sunk dramatically, even reaching negative prices in April, though they have since increased. These lows were not something the industry had been forecasting.

One can look to the (now-abandoned) Teck Frontier oilsands mine proposal for a sense of the industry’s optimism in the not-so-distant past.

In projections for the project, the company used “an average long-term real oil price of US$95 per barrel for West Texas Intermediate” — a price not seen since 2014 — to calculate its base case for the economic impact of the project.

“Prices are forecast to be US$80 to US$90 per barrel by 2020, and increasing thereafter,” Teck had written in a 2016 submission. 

We’re in strange times now, what with the impacts of the novel coronavirus and a global supply glut, but even before these forces hammered oil markets, the industry was dealing with lower prices and projections that they would only decrease further in the long run. 

In its 2020 budget, for example, the Alberta government projected prices of US$58 per barrel for West Texas Intermediate, far below the expectations laid out by Teck.

That raises questions for Olszynski about whether the industry will be bringing in enough money in the long run to pay for its cleanup.

“They’ve backended all of their liabilities,” he said. “They have massive multibillion-dollar liabilities — you know, at least $30-billion and possibly as high as $100-billion liabilities — that they have essentially, through the regulatory process, backloaded to when they are potentially facing a declining market.”

Are investors taking note of these liabilities?

Amid news of international investors pulling out of the oilsands citing climate change concerns, some are also starting to note the industry’s substantial long-term liabilities.

Earlier this year, SHARE, a not-for-profit investment service group that works with endowment funds, institutional investors and pension funds, published an investor brief outlining the risks associated with environmental liabilities in the oilsands for investors.

“Investors and creditors will need to factor these liabilities into valuations and credit risk models,” the report noted.

Mike Toulch works as a senior analyst in shareholder engagement and policy at SHARE. He advises investors to think about the risks associated with environmental liabilities.

He told The Narwhal environmental liabilities have often been seen by investors as a problem for the future.

“These liabilities tend to maybe be undervalued or over-discounted because of their long-term nature,” Toulch said.

“The fact that they might take a long time to materialize in a lot of cases does not mean that they are not real in the here and now.”

And, like many others, he’s concerned about the technologies being explored to clean up tailings ponds.

“Remediation technologies [for tailings ponds], while potentially promising, really have not been proven to be effective over the long term,” he said.

What happens to an oilsands producer if they can’t pay for cleanup?

Well, that remains to be seen. Experts are quick to point out that this hasn’t really been done before. These are massive, multi-decade projects, operated by huge corporations.

In the conventional oil and gas sector, where many smaller companies have been able to drill wells, there has been a well-documented trend of companies selling off old wells when they are no longer earning the money they used to — what The Globe and Mail described as a “brisk trade in junk assets.” 

In those examples, smaller companies that are unable to pay for cleanup were able to declare bankruptcy and foist liabilities onto the Orphan Well Association.

The oilsands are run by much larger companies. No one knows what will happen in the future, but with so little held in securities, questions have been raised about how even large companies will be able to cover substantial liabilities — especially if oil prices don’t rebound the way they’d been hoping.

Is there a chance taxpayers will be on the hook for oilsands cleanup?

That’s the elephant in the room.

The costs to seal and clean up conventional oil infrastructure — including inactive and orphan wells — across the province have increasingly fallen to taxpayers. 

In recent years, the province’s Orphan Well Association has received more than half a billion in loans from the provincial and federal governments. And as part of the pandemic economic stimulus package, $1 billion in taxpayer money has been earmarked for the cleanup of wells still owned by companies in Alberta. Then there are the land rents left unpaid by delinquent companies and ultimately paid by taxpayers. The unpaid taxes. The list goes on.

A lot hinges on the price of oil (or gas) and whether companies have any money leftover when wells run dry, or the product is no longer as profitable.

That has left some wondering if the liabilities in the oilsands are also at risk of being shouldered by the public.

“A greater and greater amount of these environmental liabilities that we’re becoming aware of are not going to fall on the people responsible for creating them in the first place,” Toulch told The Narwhal.

With so little held in security for the cleanup of oilsands mines, there are concerns that these liabilities — like some in the conventional oil sector — may end up foisted on to the public, especially if the industry continues to be beleaguered with low oil prices.

“I’m 98 per cent confident that they will become public liabilities,” Olszynski told The Narwhal. “It’s just hard to imagine that we’re ever going to get to a point of profitability with these companies.”

“I don’t see it. I don’t see how it’s possible at this point for this not to become [a public liability].”

This article was updated to reflect the most recent data available on oilsands mine liabilities, securities, size and production. 

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The Narwhal has obtained a previously unreleased report commissioned by the Alberta government that raises red flags about whether the government’s own program to ensure oil and gas sites are cleaned up is actually working in the long term. 

The 55-page report, obtained through a freedom of information request, cites “mounting evidence” that Alberta’s land reclamation program is not ensuring former oil and gas sites meet regulatory requirements in the long run, and instead confirms that, of the sites studied so far by an internal government pilot project, all but one failed to meet the government’s standards.

A former senior government official (who asked to remain anonymous) with knowledge of the report told The Narwhal that releasing the report was “seen as an extreme risk to the department” and that there was “extreme pushback” against it being made public. 

The former official described the report as a “valuable piece of science” and one “that needed to be publicly reported.”

But “politically inconvenient” reports, the official said, were often “buried” within the department, regardless of the government in power.

The province’s United Conservative Party (UCP) government has indicated that the office that has been working on this research — the environmental monitoring and science department — will soon be eliminated, and its staff “integrated” into other government departments.

‘The public needs to know that this land is being degraded’

There are nearly half a million oil and gas well sites in Alberta, covering an estimated 400,000 hectares — an area approximately five times the size of Calgary. 

For the last century, oil and gas companies have made a promise to Albertans — that the wells they’ve drilled across the province would one day be cleaned up. Companies promised that land would be returned to just as good as before drilling, sometimes even boldly claiming it would end up even better.

The Environmental Protection and Enhancement Act, the legislation that governs how companies must act to protect the environment, requires that operators — like those drilling oil and gas wells — fulfill “the objective of protecting the essential physical, chemical and biological characteristics of the environment against degradation.”

But the report finds that the government’s reclamation certificate program is unable to ensure this is happening in the long run.

The government updated its reclamation criteria in 2010, requiring cleaned-up well sites to achieve a sort of equivalence with nearby land. The government issues certificates to sites to mark them as officially cleaned up, called reclamation certificates. 

However, many reclaimed sites are not actually reclaimed at all, according to the report. 

In farmer’s fields, the exact outlines of well pads may be clearly visible through crop degradation. 

A drone shot used in a presentation made by an Alberta Environment and Parks scientist at an Alberta Institute of Agrologists conference in April 2018. The image clearly shows lingering crop degradation, long after a reclamation certificate was issued. The Alberta Institute of Agrologists told The Narwhal in fall 2018 that “there was unwanted negativity toward s[the] findings.” Image: Alberta Environment and Parks

In forested areas, there may be no trees where wells used to be.

Peter Eggers, a farmer in northern Alberta, told The Narwhal last year that an old well site on his property that has received a certificate is known locally as “the spot where nothing grows.” 

As John Begg, recently retired senior manager of public land policy and former manager of the public land reclamation program with the Government of Alberta, told The Narwhal: “The public needs to know that this land is being degraded.”

“The fact that a … certificate is issued doesn’t mean everything is good — or is going to be good in 20 or 30 years.”

Shari Clare, a professional biologist and one of the authors of the report, told The Narwhal by email that the provincial government is “very focused on the short-term goal of issuing reclamation certificates, with the assumption that once a site is certified it will continue to improve through time.”

But, she said, “there is evidence to suggest that this is not the case.”

Long-term impacts of wells ‘largely unknown’

Companies are supposed to restore an area where a well has been drilled to “equivalent land capability,” a term that — according to the report — has turned out to be more subjective than one might imagine. The government uses an extensive list of criteria to compare an old well site to a nearby piece of land that hasn’t been drilled.

In the public understanding, a reclamation certificate should ensure that the site of an oil or gas well has been returned to an environmentally acceptable state. 

The report’s authors note “the ecological implications of certification remain largely unknown,” citing a number of factors, including a lack of any long-term monitoring of well pads after they are certified.

“[S]ites are underperforming long after certification,” the authors write, referring to reclamation certificates issued by the regulator once it deems sufficient work has been done. 

They note previous research has shown “a large number of certified well sites do not meet an acceptable standard,” as defined by the government.

Alberta Environment and Parks did not respond to The Narwhal’s repeated requests for an interview.

Oil operations near Carseland, Alta. An author of a previously unreleased report on the long-term reclamation of sites like these told The Narwhal that the government and the provincial energy regulator are “very focused on the short-term goal of issuing reclamation certificates, with the assumption that once a site is certified it will continue to improve through time.” Her research found “mounting evidence” that this is not the case. Photo: Todd Korol

Alberta’s reclamation certificate program is overseen by the Alberta Energy Regulator, an independent corporation funded entirely by industry that oversees the regulation of oil and gas activities in Alberta.

The Alberta Energy Regulator declined to make anyone available for an interview and instead requested questions submitted by email.

Shawn Roth, a spokesperson for the Alberta Energy Regulator, said in an emailed response that the regulator has “concerns with the methodology and interpretations made in the report.”

He noted that the sites studied received a reclamation certificate before the government’s current criteria were being used to evaluate equivalent land capability. “A site should not be reassessed using criteria that came into place after its reclamation certificate was granted as criteria evolve over time,” he wrote.

But the report notes that, currently, a “fairly substantive number of reclamation certificates are being issued for sites that do not meet the 2010 criteria,” because the regulator grants exceptions to companies by labelling their applications as “non-routine.”

“This raises important questions regarding long-term liability of these sites, that will eventually shift to Albertans on both private and public land,” the report’s authors write.

Clare, one of the authors of the report, told The Narwhal that “while the government insists that the new (2010) reclamation guidelines will result in better outcomes, there is no requirement to monitor these sites once they have been certified.”

And, as others point out, the massive number of sites that have already been certified as reclaimed may be a liability Alberta needs to deal with.

“Some of the things that are diminished are maybe permanent,” Begg said. “It’s not necessarily fixing itself over time.”

Alberta’s Energy Regulator’s public reporting is ‘not transparent’

The report alludes to a brewing regulatory failure to oversee the reclamation certificate process in the first place.

The report — which dubs the Alberta Energy Regulator’s public reporting as “not transparent with respect to very basic metrics,” “somewhat opaque,” and “unlikely to be informative” — was provided to the Alberta Energy Regulator in 2018 by Government of Alberta staff, according to emails obtained through a freedom of information request. 

The report contains a lengthy analysis of Alberta’s reclamation laws, policies and regulations and raises concerns about the Alberta Energy Regulator.

In it, the authors wave a red flag about the regulator’s audit system, which relies on a program for certification that is largely automated and seldom sends auditors out into the field to check the work of consultants hired to fill out applications for reclamation certificates. 

Less than three per cent of sites that have received reclamation certificates from the Alberta Energy Regulator have been visited as part of an audit of the site’s approval, which is largely automated. The public has frequently been told 15 per cent of sites would be visited for an audit. Graph: Sharon J. Riley, Carol Linnitt / The Narwhal

The authors interviewed practitioners who work in reclamation. Those practitioners felt the “audit system resulted in a greater proportion of poorly performing sites being certified, as there was less regulatory oversight in the audit system.”

Begg, the retired former manager of Alberta’s public land reclamation program, is concerned there are few consequences for a company when an audit reveals a site should have failed. “When there’s an audit failure there’s got to be drastic consequences, other than just failing the site,” he said.

Currently if an audit reveals a site should have failed, the company will simply need to update its application and complete any work to ensure the site passes next time.

The report suggested there is a large amount of leeway for the consultants that sign off on reclamation jobs, even if they may not meet the criteria required by the government.

Following an analysis of data provided by the regulator, the report found a “fairly substantive number of reclamation certificates are being issued for sites that do not meet the [government’s] criteria.”  

And that’s a problem — as the government has no mechanism to monitor the health of sites in the long term.

The report noted “there are no formal or legislated post-reclamation metrics against which to evaluate reclamation outcomes longer-term.” 

And with the soon-to-be elimination of the government division that was looking into long-term monitoring, it seems unlikely there will be any type of metric in the future.

No consensus a reclaimed well site is ‘actually going to grow a tree again’

The report notes that forestry operators have long found that certified well sites in the boreal region “do not support trees with the same growth and yield” and that farmers and landowners report that crop productivity on certified well sites is not comparable to the rest of their fields.

According to Begg, “on forested well sites, there isn’t consensus it’s actually going to grow a tree again.” 

A ‘reclaimed’ oil and gas well in Yellowhead County, 250 kilometres west of Edmonton, Alberta. The landscape has not been returned to its former state. Image: Screenshot / Google Maps

The problem is often with the soil.

As Larry Brocke, former director of the Government of Alberta’s land reclamation division in the ’90s, put it in an interview with the Petroleum History Society, “You can’t put it back the way it was immediately. You just can’t.”

Roth, the spokesperson for the regulator, noted in an email that “companies remain responsible for surface issues related to reclamation for 25 years after receiving a reclamation certificate. They are also permanently responsible for contamination and any infrastructure left beneath the surface.”

But there are concerns that issues with reclamation may not be noticed for years, or even decades, particularly on remote public lands where there is no nearby landowner to keep a watchful eye.

And the question remains: how long does it take for land to get “back to what it was before” after oil and gas development? Or can it?

No one knows what will happen in the future

The Alberta Energy Regulator received the report in 2018. Nothing appears to have changed since the findings were shared among government officials.

Roth from the regulator wrote by email that “while we are not currently working on anything specifically with Alberta Environment and Parks, we are always looking for potential improvements to the reclamation certificate process.”

The Narwhal first reported on the Alberta government’s internal pilot project to evaluate a small number of reclaimed well sites in 2018. 

Since then, some of the results of that pilot project have been published for the scientific community.

In research published in November, University of Alberta scientists and their government counterparts found that “well pad impacts can be long lasting and may remain for decades or more post reclamation,” suggesting that regardless of the criteria used to measure a pass or fail, former well sites simply cannot be said to be recovering from the impacts of oil and gas development.

A paper in the Canadian Journal of Soil Science has detailed some of the results of the pilot project — and is sharply critical of the government’s ability to ensure oil and gas wells are truly cleaned up.

“There is a general lack of assurance to the public that intended goals of reclamation and recovery, as expressed in legislation, are achieved at reclaimed and certified well pads,” the authors write. 

The lead author of the paper is a land scientist with the soon-to-be scrapped environmental monitoring and science division of Alberta Environment and Parks.

The authors lambast the government for its lack of monitoring and its failure to collect scientific evidence.

They write that “even after more than five decades of certification history,” the government has not acted to collect any long-term information about the success of the cleanup of well sites.

”This type of scientific evidence is essential … to assure citizens that public and private land will be protected.”

The authors undertook a pilot project, called the ecological recovery monitoring project, that found “significant” environmental and crop impacts of oil and gas wells long after the government had signed off on reclamation certificates.

The path of a buried pipeline is clearly visible in a farmer’s fields near Fairview, Alta. Some farmers have long been concerned with the impacts of oil and gas infrastructure on their crops. A report obtained through a freedom-of-information request has warned that even after oil and gas sites are certified as reclaimed, there may be long-term issues with the productivity of the land. Photo: Amber Bracken / The Narwhal

The pilot project found “there are long-term oil and gas legacy effects on soils at reclaimed well pads.”

The funding for the ecological recovery monitoring project has since been cut, according to internal emails obtained by The Narwhal through a freedom of information request. 

And in October, CBC reported that the entire environmental science and monitoring division would be dissolved by the UCP government.

‘The most efficient regulatory system is one that doesn’t exist’

It has been internally estimated that it would cost as much as $100 billion for all the wells across the province to meet the government’s standards.

“Given how many of these sites exist on the landscape, and the enormous ecological and public liability that this represents, I think that the provincial government should be giving greater attention to this issue,” Clare, one of the authors of the report, said in an email.

There should be, she added, “less focus being put on the number of applications that are being processed, and more focus being put on the quality of those sites.”

This report raises serious questions about what happens if sites still don’t meet standards, even after they’re certified as reclaimed — at a time when the Alberta government has increasingly put an emphasis on “efficiency” in its regulatory bodies.

“The most efficient regulatory system is one that doesn’t exist,” Begg told me. “It doesn’t create any burden. That’s extremely efficient.”

That sort of system, he laments, would also mean zero oversight for companies operating all over Alberta.

Begg is adamant that more needs to be done to ensure reclamation policies have been working in the province, and that includes ensuring companies invest in reclamation work in the first place. 

“We need policies to have timelines to ensure reclamation occurs,” he tells me.

And, he added, the government — who is responsible for setting reclamation policy — needs to take a step back and fully evaluate whether its program is working (as it appears the report obtained by The Narwhal was intended to do).   

“You’ve got to look back and make sure that the things you’re doing today are delivering what they’re supposed to,” Begg says. 

Eliminating the only government department to date that has tried to do just that, he implies, certainly isn’t helping.

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It’s been five years since the Mount Polley tailings dam burst and spilled 24 million cubic metres of mining waste into critical salmon habitat in the Fraser River watershed, but B.C. hasn’t learned its lesson, according to a new report released on Tuesday.

If another mining accident happened today, B.C. taxpayers would still be at risk of paying the clean-up bill according to the report released by the First Nations Energy and Mining Council, which calls on the B.C. government to compel mining companies to provide funds for cleanup.

“The lack of financial assurance for mining disasters is a serious policy gap in British Columbia — one that increases the risk of another Mount Polley,” said report author and economist Jason Dion. “By implementing smart financial assurance requirements, B.C. can better protect the public while still ensuring a thriving mining sector in the province.”

The cost of cleaning up B.C.’s abandoned mine sites was pegged at more than $500 million in 2016.

Financial assurance is a system of ensuring funds are available to pay for a cleanup even if a company goes bankrupt. It screens out companies that can’t afford the risk of their own projects.

British Columbia currently relies on a phased system of financial assurance, in which companies do not have to put up the full estimated clean-up cost up front; companies can rely in part on the value of the untapped commodities in the ground, an approach that is vulnerable to commodity swings, company bankruptcies and technological innovations at competing mines elsewhere in the world, Dion says.

Two tailings dam failures expected each decade under current regulations

The expert panel that reviewed the cause of the Mount Polley mine disaster warned B.C. can expect two dam failures every 10 years unless mining laws are updated. Nearly five years later, no fines and no charges have been laid against the mine’s owner Imperial Metals, which is now on precarious financial ground. One economist has estimated that British Columbians are on the hook for a $40 million clean-up bill for the Mount Polley disaster.

“B.C. has a polluter-pay policy under its Environmental Management Act, but that’s not the reality on the ground,” said Allen Edzerza of the First Nations Energy and Mining Council.

“By accepting our recommendations, the government would not only ensure that polluters pay when there are disasters, it would also reduce the risk of another Mount Polley by giving mining companies a financial incentive to reduce risk in their operations.”

The recommendations would bring the mining sector into line with other heavy industrial sectors — pipelines, offshore oil and gas production, tanker traffic and nuclear power generation — which must provide financial security against the risk of disaster, in many cases up to $1 billion, according to the report.

A June report from the First Nations Energy and Mining Council found that British Columbia does not need to reinvent the wheel in terms of mining rules. It can emulate other jurisdictions such as Quebec and the United States.

A case in point: in 2013 Quebec tabled legislation requiring all new mines to provide a guarantee sufficient to cover the estimated costs of clean up. A mining operation today must provide a financial guarantee in three separate payments in the earliest stages of mine life: 50 percent of the total amount within 90 days of mining plan approval, with two payments of 25 percent each, made on the subsequent anniversaries of approval.

‘The power exists to do it today’

These changes could be made in B.C. with a stroke of the pen, says report author Dion, a researcher at Ottawa’s Ecofiscal Commission.

“The power exists to do it today,” he says of requiring any new B.C. mine to put up a full clean-up cost with cash or other secure financial instruments. “Under this scenario, only the mines that could afford to clean themselves up would go forward, from now on. This is definitely low-hanging fruit.”

This spring, the B.C. Ministry of Energy, Mines and Petroleum Resources confirmed it was engaging industry and First Nations on legislative changes to the Mineral Tenure Act, specifically around changes to placer mining and mineral tenure rules. In late July, a spokesperson for the ministry confirmed that there are also plans to change B.C.’s reclamation security policy this year, although details and more specific timelines were not provided.

The Quebec policy shift, part of a wider body of reforms, is noteworthy because a big multinational mining company operating in Quebec today needs to put up full clean-up costs upfront, regardless of how much money it has in the bank. Meanwhile in B.C., mining giant Teck Resources has unsecured reclamation costs of $700 million for its mines.

Tulsequah Chief mine polluting for decades

Emulating the Quebec approach could eliminate the conditions that created the fiasco at northern B.C.’s Tulsequah Chief mine. In that instance, a large company developed the mine and later sold it off, only to be taken over by a succession of small players without the means to clean it up.

The Tulsequah Chief, which has been polluting a shared Alaska-B.C. transboundary salmon river for decades, has not only strained B.C.’s reputation and relationship with Alaska, but B.C. taxpayers are now on the hook to pay for clean-up.

Water pits filled with acid mine drainage at the Tulsequah Chief mine in northwestern B.C. The mine has been discharging waste into the transboundary salmon-bearing Taku River for 60 years. Photo: Chris Miller via CSM Photos

B.C. also gives its Chief Inspector of Mines, an unelected bureaucrat appointed by the ministry, a large amount of discretion in setting the terms of financial assurance, which appears to occur on an ad hoc, mine-by-mine basis without posted guidelines. The province did not facilitate The Narwhal’s request for an interview with Herman Henning, B.C.’s new Chief Inspector of Mines. Henning’s LinkedIn page as of July 24 showed his current occupation as a “self-employed mining consultant.”

Edzerza of the First Nations Energy and Mining Council cautions that more is necessary than simply insisting on full up-front reclamation costs. Mechanisms are also needed to ensure that estimated reclamation costs reflect the real clean-up cost — including when a mine expands beyond the originally permitted size.

‘No negative effect’ from Quebec’s strengthened reclamation policy

In Quebec, political will was required to make the policy changes. Government faced criticism from a wide range of industry-related groups in the lead-up to the changes, including warnings that tougher bonding rules would make the sector internationally uncompetitive.

But more than five years later, the sky has not fallen in Quebec.

“There has been no negative effect on investment attraction,” wrote Sylvain Carrier, a spokesman for Quebec’s Ministry of Energy and Natural Resources, in an email to The Narwhal. “This policy change had a positive effect on public confidence, fostering social responsibility, and on mining investment.”

Carrier says that in 2014, the year after the changes were made, total mining investment in Quebec was $2.9 billion; last year, it was more than $3.1 billion.

“We can say with reasonable confidence that [the Quebec changes] haven’t led to the kind of major crash in mining sector investment that some might have predicted when the policy was put on the table,” says Dion. “It might mean less mining investment, but given the risks and costs of remediating some of these mines, if they cannot pay their own costs down the line, that might make sense.”

Dion cites the latest Fraser Institute’s annual survey of mining companies, sent to 2,600 global mining professionals, which ranked Quebec fourth out of 83 mining jurisdictions in terms of “investment attractiveness.” British Columbia came in at number 18.

The Quebec Mining Association (Association Minière du Québec), one of the groups that cautioned about the changes in advance, declined comment for this story.

Should B.C. have a Superfund program?

One approach to paying the massive costs of future disasters, recommended in the June report from the First Nations Energy and Mining Council, is for British Columbia to create something akin to the U.S. federal government’s Superfund program.

Superfund is the name given to 1980 federal U.S./ legislation that empowers the Environmental Protection Agency (EPA) to clean up contaminated sites, forcing parties responsible to either perform cleanups or pay for government-led cleanup work.

At its outset, Superfund was funded by excise taxes on the petroleum and chemical industries, which makes it a useful model to consider for raising money to deal with future industrial disasters in B.C. Dion says it might be possible to “pool risk” across industrial sectors that are provincially regulated — for example, requiring mining and natural gas fracking companies to pay into a single disaster clean-up fund.

“We think the Superfund [approach] should be looked at closely as a model to replicate,” Edzerza said. “Because as we found out with Mount Polley, you’ve got to scramble to find funds to initially respond, and then to assess [damages] and do restoration work.”

Such an approach creates an industry-wide incentive — a sort of peer pressure — to ensure that all companies across a sector don’t let operations slip, because each company is indirectly on the hook for costs if a disaster occurs.

While this pooled risk approach is commonplace in many sectors, not a single province or territory in Canada currently uses such an approach to pay the cost of mining disasters.

— With files from Emma Gilchrist

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A new presentation obtained by The Narwhal shows that senior staff at the Alberta Energy Regulator are projecting the number of inactive wells in the province could double in the next decade if there isn’t any change in policy.

In recent years, the backlog of wells in Alberta that are no longer active, but not yet cleaned up, has been steadily increasing. Right now, there are roughly 90,000 inactive wells in the province.

The presentation obtained by The Narwhal reveals senior staff at the Alberta Energy Regulator are privately projecting that number could double to 180,000 by 2030.

The cost of cleaning up wells is huge. Today, the Alberta Liabilities Disclosure Project, a coalition of landowners, oil and gas companies, academics and civil society groups, dubbed the problem of the province’s wells “a massive ticking time bomb.”

Inactive wells have never been plugged or sealed, are unlikely to ever be productive again, and can languish on the landscape for years — or decades. As The Globe and Mail reported last fall, the oldest inactive well in Alberta dates back to 1918.

The presentation — obtained by The Narwhal in a freedom of information request — shows that in 1999 there were approximately 30,000 inactive wells in the province, a third of the number that exist today.

A slide from the AER presentation showing the growth rate of inactive oil and gas wells in Alberta.

In addition to the 90,000 inactive wells today, another 77,000 are what’s known as abandoned — the industry term for safely plugged —  but they too are not yet reclaimed. Reclamation involves restoring the well site’s soil and vegetation. There are hundreds of thousands of wells in the province.

The rapid increase in inactive wells has implications for the estimated tens of billions in liabilities industry faces for well cleanup costs. But these costs are not borne by industry alone. 

Not only is there a burgeoning number of orphan wells in recent years, but taxpayers can end up picking up the tab for rent owed to landowners. The Narwhal reported in February that the rent payments government has made to landowners on behalf of delinquent companies is up 840 per cent since 2010.

“It’s a huge issue,” said Thomas Schneider, an associate professor of accounting at Ryerson University who studies environmental liabilities.

“It’s a pretty sad legacy to leave behind.”

‘We have a problem’

The presentation, entitled “Liability Challenges in Alberta,” was made by the regulator’s vice president of closure and viability, Robert Wadsworth, in a meeting with representatives from the Canadian Association of Petroleum Producers (CAPP) in October.

The presentation was obtained after The Narwhal asked the Alberta Energy Regulator to release a year’s worth of emails and lobbying records with the Canadian Association of Petroleum Producers. The request entailed such a “large volume of records” that the regulator charged The Narwhal $643.95 to access the documents. Our readers quickly stepped up to the plate and donated the money to pay the fee.

“We have a problem,” the presentation began.

Wadsworth presented data on the past 20 years of well closure in Alberta. While the number of wells abandoned annually — “abandoned” is the industry term for sealing or plugging a well, the first step in reclaiming a site — has remained relatively constant, the number of inactive wells has increased at a rate of six per cent per year.

The title page of a 2018 Alberta Energy Regulator presentation released to The Narwhal via Freedom of Information legislation.

The first page of Wadsworth’s presentation that begins, “we have a problem.”

“Industry needs to increase closure activities,” the presentation states.

The presentation also said that a “manageable inactive inventory” would be about 20,000 wells — less than a quarter of the current inventory.

The Narwhal asked the Alberta Energy Regulator by email if Wadsworth’s projection of a doubling of the inventory of inactive wells by 2030 is a situation the organization is anticipating.

A spokesperson did not specifically answer the question, writing instead by email that, “the liability issue has been identified as a corporate priority,” adding, “we are working towards finding solutions.”

In his presentation, Wadsworth indicates that “quotas and timelines” could prevent the explosion in inventory projected in the next ten years.

Alberta’s well liability problem has become an issue of note in the provincial election, with the NDP vowing to “implement clear timelines for when companies need to clean up their abandoned oil and gas wells and require them to justify delays in reclaiming sites.”

The United Conservative Party (UCP) platform makes no such promise, indicating instead it would ask the federal government for tax incentives for reclamation, and “speed up approvals” of new wells.

An editorial in the Edmonton Journal last week declared that the issue of oil and gas liabilities “may be the biggest single issue that has ever faced this province.”

Costly cleanup

Companies may leave wells to sit inactive because it’s expensive to clean them up.

The Alberta Energy Regulator estimates it can cost $12,800 to $134,177 to plug a well, and $16,500 to $42,155 to reclaim the site.

As The Narwhal reported last fall, a researcher at the University of Calgary found that actual reclamation costs can easily be 60 per cent higher than the regulator’s estimates. Others have said the numbers may be far higher.

The presentation obtained by The Narwhal indicates that if current conditions continued, it would take 126 years to plug all wells in the province — and this doesn’t include reclamation of the landscape.

Nor does it take into account what could happen to struggling energy companies if oil prices don’t rebound the way Albertans hope they will.

New data released Monday shows cleanup will cost billions

The Alberta Liabilities Disclosure Project, using data from the regulator’s public estimates, estimates the actual cost of cleanup of each well in the province is between $40 and $70 billion.

The result, according to a press release, is a liability “2 to 3.5 times higher than the $18.5 billion [the regulator has] told Albertans.”

According to the group, $200 million is currently being held as a deposit — less than 0.3 per cent of the group’s estimated total cost of clean up.

“Albertans are at risk of being on the hook for an oil well cleanup bill $22 to $51 billion more than the publicly reported estimates,” the Alberta Liability Disclosure project said in a statement.

“That’s a massive problem.”

The Alberta Energy Regulator did not respond to request for comments on these new figures by press time.

Reclamation certificates before reclamation is complete?

Currently, a company is issued a reclamation certificate from the Alberta Energy Regulator after a wellsite has been fully reclaimed — though questions have been raised about the quality of the work being approved.

Wadsworth’s presentation suggests the regulator might consider issuing reclamation certificates before all reclamation work is completed through the use of “progressive and partial” certificates.

When asked for clarification, a regulator spokesperson said progressive certificates would mark “stages or major milestones of reclamation activity,” while partial certificates would be used when only a portion of an active site has been reclaimed.

It seems a company may be able to receive some sort of credit from the regulator before finalizing full cleanup of a site.

Both new types of certificates are “are still being assessed and reviewed,” according to the spokesperson.

When The Narwhal asked if a partial reclamation certificate would mean a company may be off the hook for making rental payments to landowners, the regulator declined to answer.

Mike Smith, retired oil and gas well reclamation inspector, at a flooded oil lease site in Wainwright, Alta. This site has been suspended, according to the regulator. Smith lives nearby and drives by the site occasionally, to see if any reclamation work is being done. It isn’t. He’s seen plenty of contamination issues over his career. If no one checks, he worries about the long term recovery of sites. “Those problems are still there,” he says. Photo: Amber Bracken / The Narwhal

The wells of bankrupt companies

The regulator has long been criticized for allowing financially precarious companies to obtain licenses for wells associated with large environmental liabilities. The Orphan Well Association lists 2,000 wells in the province that have yet to be ‘abandoned,’ an industry term for properly sealed, and whose owners are now bankrupt.

The presentation suggests that a “corporate health tool” could replace the regulator’s current system for rating liabilities which is used to determine if a new well should be approved.

In the presentation, the tool is described as an automated system used to weigh a company’s ratio of inactive wells with inventory, production and financial health among other factors. In its election platform, the NDP indicated plans to implement a corporate health tool of this kind. (See The Narwhal’s comparison of NDP and UCP platforms when it comes to oil and gas wells here.)

A spokesperson with the regulator told The Narwhal, “we are currently refining a corporate assessment tool to assess risk using financial, behavioural, and inventory risk factors.”

The spokesperson noted that the regulator already has “more discretion to reject applications” than in previous years and that companies are now required to disclose audited financial statements or insolvency proceedings.

But Schneider, an expert in environmental liabilities, is concerned that not even a corporate health tool can predict whether a company will be able to pay for clean up in the future. He also worries that this kind of assessment can favour large companies.

“They look healthy” at first, he said, “then everything goes south.”

Without a deposit on hand, he added, there’s no guarantee that clean-up costs will be covered.

‘Too much room for politics and regulatory capture’

As for whether the province is going to take any serious steps towards mitigating the growth of inactive wells, Schneider isn’t sure.

“It’s a question of political will,” he said. “The only solution is starting to do the actual decommissioning.”

“We need to start getting serious security put to the side,” Schneider says, noting the current system “leaves too much room for politics and regulatory capture.”

There are concerns that a rush to reduce liabilities on paper could lead to lax regulations around certification. A recent investigation by The Narwhal found that the regulator approves 97 per cent of reclamation certificates without sending an auditor to the site, despite having previously assured the public 15 per cent of sites would be visited.

Then there are concerns about what happens to the hundreds of thousands of wells puncturing Alberta’s landscape if the industry becomes less profitable.

“It’s an industry that’s not going to last forever — whatever you say the horizon is,” Shneider told The Narwhal.

The question remains: who’s going to end up with the bill?

In Wadsworth’s presentation, he highlighted that “growing liabilities” are a “shared liability problem” — shared, he noted, by industry, the regulator, government and taxpayers.

Wadsworth pointed to “industry retain[ing] the liability” as a “strategic goal” in the coming years. But no one knows for sure if this is really in the cards.

“The oil and gas industry is legally obligated to fund the cleanup of its environmental liabilities,” Greg Rogers, an environmental risk and liability consultant and member of the Alberta Liability Disclosure Project, said in a press release.

“But the industry isn’t setting aside anywhere near enough money to do it which means the public will be left on the hook for the costs.”

“If it ends up in the hands of Alberta to pay for it, it’s a huge liability,” Schneider said.

Wadsworth AER Presentation Liability Challenges in Alberta by The Narwhal on Scribd

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Documents obtained by The Narwhal reveal that, for the last four years data is available, 2014 – 2018, less than three per cent of oil and gas sites certified as reclaimed have been visited by an inspector from the provincial regulator — a far cry from the 15 per cent the public has been long told.

The data — accessed through a lengthy back-and-forth with the Alberta Energy Regulator’s media team and freedom of information office — shows that since the spring of 2014, more than 9,400 reclamation certificates have been issued, but during that same time period, just 277 sites were actually visited by the regulator for an audit.

This means the vast majority of oil and gas sites are certified as reclaimed without any independent physical assessment by the regulator — and most reclamation certificates are granted by an automated system.

This wasn’t always the plan.

In a 2014 report, the Government of Alberta noted there are “randomly selected field audits on approximately 15 per cent of all sites that have received a reclamation certificate.”

And at a 2015 landowner oil and gas information workshop, government and regulator officials — including Kevin Ball, senior advisor with the Alberta Energy Regulator — told participants that 15 per cent of sites are visited for a field audit.

But this is certainly not the case under the Alberta Energy Regulator, which oversees the certificate program today.

2015 – 2017: not a single subsurface audit conducted

The Alberta Energy Regulator took over handling reclamation certificates from Alberta Environment in 2013. It launched an automated approval system online, called OneStop, in 2016.

Though the audit system is often understood as a way for the regulator to go out into the field to assess the work of the contractor who applied for the reclamation certificates, it has largely come to mean a human eye looking at an application’s details, and has rarely entailed a visit to site.

The percentage of certified reclaimed sites where the regulator completed a surface or subsurface audit between 2014 and 2018. In 2015, the regulator and the government told landowners 15 per cent of sites would be visited for a field audit. In reality, less than three per cent of sites have been visited. Graph: Sharon J. Riley, Carol Linnitt / The Narwhal

When The Narwhal started looking into this issue last fall, the Alberta Energy Regulator initially told us by email that “84 per cent or 1767 of the 2093 issued reclamation certificates were audited” in fiscal year 2017/2018.

When pressed, a spokesperson changed the number. “We discovered that the number provided was incorrect,” she said in an email.

“The [Alberta Energy Regulator]’s audit program flags 15-30 per cent of reclamation certificates for desktop, surface, or subsurface audits,” a spokesperson for the regulator then told The Narwhal by email last fall.

More recently, the regulator told The Narwhal by email that, “on average, 15-20 per cent of reclamation certificates are flagged for desktop, surface, or subsurface audits.”

Either way, none of these statements accurately capture what’s been going on over the most recent four years of data available.

Data shows that 12.7 per cent of approvals have involved any kind of audit at all over the most recent four years data is available, 2014 to 2018. Of those audits, the vast majority are simply a human review of the paperwork, a procedure called a “desktop review” that was introduced in 2016.

Less than three per cent of sites that have received reclamation certificates from the Alberta Energy Regulator have been visited as part of an audit of the site’s approval, which is largely automated (2014-2018). The public has frequently been told 15 per cent of sites would be visited for an audit. Graph: Sharon J. Riley, Carol Linnitt / The Narwhal

Field visits are much more rare.

Since taking responsibility for regulating reclamation, the highest number of sites visited by the regulator in the province in one year is 117, while between 1,110 and 4,500 certificate have been approved annually.

In fiscal year 2015/2016, just seven sites were visited for an audit, while 1,184 were issued reclamation certificates.

Even fewer sites involve what’s known as a subsurface audit, which involves looking below the surface of the site and collecting soil samples for lab analysis.

In 2015, officials told landowners that five per cent of sites would receive a subsurface audit.

In reality, just over one per cent of reclamation certificates have involved a subsurface audit in recent years.

Between 2015 and 2017, not a single subsurface audit was conducted, while nearly 6,000 reclamation certificates were approved.

The regulator cites “budget constraints” as the reason for not conducting any subsurface audits in those years.

The Alberta Energy Regulator is an independent corporation funded entirely by industry. It is mandated by the provincial government to oversee regulation of oil and gas activities in Alberta.

A spokesperson says the program was in a “state of transition” and that it has only been auditing under its current system for one year (five per cent of sites were visited for any kind of field audit last year). Thirty-six per cent of reclamation certificate applications were audited — the vast majority of which were desktop reviews — last year, up from five per cent in 2016-2017.

The rest were approved by the regulator’s automated system.

The vast majority of reclamation certificates in Alberta are approved via an automated system and never audited by the regulator (2014-2018). Sharon J. Riley, Carol Linnitt / The Narwhal

Up until 2003, Alberta’s reclamation program involved field visits to every site applying for a reclamation certificate. Government inspectors would head out to former wellsites to make sure clean-up efforts met government standards.

That all changed in 2003, when the government moved to an audit system, with a spokesperson telling The Globe and Mail at the time that random field audits would help ensure compliance, and that the province planned to audit 15 per cent of the sites.

‘Bingo-dauber agency’

In 2003, 14 people gathered around a long conference table to talk about the future of reclamation certificates in Alberta. They were the Oil and Gas Remediation and Reclamation Advisory Committee, created to provide recommendations to the minister on the new system that had just been designed to “enhance capacity needed to deal with an increasing workload” — in other words, they were overwhelmed with applications for reclamation certificates.

Some committee members were representatives of Alberta Environment, the Surface Rights Federation, the Farmers’ Advocate and the Energy and Utilities Board, among others. Two representatives were there on behalf of the Canadian Association of Petroleum Producers (CAPP).

Peter Eggers, a director with the National Farmers Union who farms near La Glace, Alta., was there, too. He was representing the Alberta Conservation Tillard Society.

Eggers had had his own problems with a certified reclaimed well pad on his property — he told The Narwhal that the Orphan Well Association had paid for its cleanup, and removed thousands of tonnes of soil. Still, Eggers said, the quality of the site has never been the same. His neighbour, he told The Narwhal, refers to the certified reclaimed well pad as “the spot where nothing grows.” It’s been a long-standing headache.

Eggers was interested in the reclamation certificate process, and was optimistic he’d be able to have input. “People said the oil companies were dictating how things would happen,” he remembers.

He wanted to find out for himself.

CAPP ‘put their fist down’

Eggers told The Narwhal he was paid an $8 per diem to attend the meetings in Edmonton. The purpose, he says, was to develop a way to “streamline” the process through which companies could receive reclamation certificates.

On the final day, Eggers told The Narwhal, the CAPP delegates sat at one end of a long conference table, Alberta Environment representatives at the other. The two parties, Eggers said, looked only at each other. Other participants watched from the sidelines, literally.

“The CAPP people were dictating to the [Alberta] Environment people” he said. “The CAPP people would always kind of put their fist down.”

“The rest of us were there just for the alibi.”

The end result, according to Eggers, is a “bingo-dauber agency” — now the Alberta Energy Regulator — that approves reclamation certificates without what he considers to be sufficient regulatory monitoring.

“It’s an agency that supposed to appear to the public that they have really good oversight,” he said.

“But it lets sites slip through the cracks.”

Active wells near Hays, Alta. Photo: Theresa Tayler / The Narwhal

Certificates approved ‘within a matter of hours’

The Alberta Energy Regulator’s annual report advertises that the majority of applications are approved using its automated system, OneStop, boasting that at one point 2,100 reclamation certificates (which it deemed “low-risk”) were processed “within a matter of hours” — no human oversight, no field visit, no inspection of the land or soil’s condition.

In Eggers’ committee’s recommendations to the minister in 2004, it was made clear that 15 per cent of all reclamation certificates were to be audited, and that an audit would involve a “field investigation component,” including the possible use of soil sampling equipment or laboratory analysis — a far cry from a desktop review.

At some point, the 15 per cent standard was apparently dropped, and the “field” was dropped from “field audit.” Prior to the introduction of “desktop audits,” all audits involved a field visit.

Eggers is clear that this is not how the program was initially intended to function: “An audit is also a site visit to verify that the written report and the actual condition [of the site] matches,” he said.

When asked for comment, the Alberta Energy Regulator responded to questions by email.

When The Narwhal asked if there had ever been a public announcement of this shift from field audits to primarily desktop audits, we were pointed toward a brief announcement unveiling OneStop. There is no mention of field audits.

“The [Alberta Energy Regulator] does not have a specific audit target for reclamation certificates,” Samantha Peck, a spokesperson for the regulator, wrote to The Narwhal.

“Our audit program was revised in 2016 and now uses statistics and confidence intervals to determine the number of audits that will be conducted within a given period,” Peck continued.

“[The Alberta government] does not provide direction or guidelines on the percentage of audits completed by the [Alberta Energy Regulator],” Peck said by email.

Slides from a Government of Alberta and Alberta Energy Regulator presentation delivered to landowners that indicates 15 per cent of oil and gas sites receiving reclamation certificates would be audited.

Peck referred The Narwhal to Alberta Environment and Parks for answers to questions about previous public commitments to conduct field audits at 15 per cent of sites.

The Narwhal first requested an interview with the Alberta Environment and Parks land reclamation policy team about this topic on Feb. 6.

After following up on Feb. 14, Feb. 15, Feb. 27, March 1, March 4, March 9, March 11 and March 19 — including sending questions by email, as requested — The Narwhal was told that the communications team was “not able to get the messages through approvals before the election was called… Sincere apologies.”

‘Perverse incentives’

There are tens of thousands of inactive wells on the landscape, and the number has been growing every year.

Unlike in other jurisdictions, such as in parts of the United States, there are no required timelines in Alberta as to when a company has to clean up a site. It becomes a calculation — costs versus benefits for the company.

Once a company does decide to invest in cleanup, obtaining a reclamation certificate removes the liabilities it keeps on its balance books, and relieves it of the obligation to pay rent to the landowner where the pipeline or well is located

“Reclamation is not always simple or cheap,” Regan Boychuk of Reclaim Alberta told The Narwhal by email. “Auditing is crucial in order to protect Albertans from long-lasting risks and consequences.”

“Issuing certificates on the basis of paperwork without verification in the field creates perverse incentives for industry to forego expensive remediation and instead gamble it will ever be uncovered,” he said.

“Regulators have repeatedly chosen to prioritize industry’s interests over the health and safety of Albertans and their environment.”

The Alberta Energy Regulator points out that its automated approvals allow it to focus more energy on what it deems to be high-risk applications.

“To improve efficiency, the [regulator] is focused on improving application turnaround timelines, ensuring modern, effective requirements, and continuing to transform how we operate in order to keep up with market and technology changes that affect industry,” a spokesperson for the Alberta Energy Regulator told The Narwhal by email last fall.

Peck, a regulator spokesperson, told The Narwhal that it maintains that it “continually refines its reclamation certificate program to ensure the [Alberta Energy Regulator]’s mandate can be met, requirements remain effective, and assessment rules remain relevant.”

The Narwhal previously reported that the number of field inspectors has declined by 16 per cent since the Alberta Energy Regulator took over from Alberta Environment in 2013.

Necessary checks and balances?

Whether audits are necessary at all is up for debate.

The current system requires that an accredited professional — an agrologist, a forester, an engineering technologist or similar —contracted by the company, signs off on a reclamation certificate application before it is submitted to the Alberta Energy Regulator.

For some, that professional assurance is enough — professionals could lose their accreditation if they sign off on subpar reclamation efforts — but for others, regulatory oversight is necessary, and even professionals need to know their work may be checked.

As one professional who spoke to The Narwhal last fall on the condition of anonymity put it, the company a contractor is evaluating a site for is also “going to be signing off on [their] invoice.”

Numerous contractors told The Narwhal there can be pressure to pass sites.

David Lloyd, CEO of the Alberta Institute of Agrologists — whose members are among the professionals contracted by companies to sign off on reclamation certificate applications — told The Narwhal by email that, “unless the professional body has specific practice standards in place related to a specific activity (like reclamation or remediation) and unless the profession is conducting a practice review of their members related to that practice standard, governments, I believe, should be auditing all professions equally and fairly.”

“If professions are not conducting practice reviews of their members, then how is the profession and the public to know that work is being done to a defined standard?” he asked.

The Alberta Institute of Agrologists has recently begun conducting its own random practice reviews — completing eight in December — and plans to resume in the fall.

Lloyd told The Narwhal that he isn’t aware of any other professional organizations involved in signing off on reclamation certificates in the province doing something similar.

Inspections show reclaimed sites don’t meet government standards

The Narwhal reported last fall that a pilot project from Alberta Environment and Parks found that the vast majority of certified reclaimed sites studied were not meeting the government’s own standards for “equivalent land capability,” with lingering impacts on soil, plant and crop quality.

Eggers is skeptical that Alberta’s reclamation certificate program is working as it was intended, especially without on-the-ground audits being conducted regularly by the regulator.

“In our experience,” he said, “[companies] always try to get away with as much as they can.”

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“Every single wellsite failed.”

That’s what Keith Wilson, a lawyer who has worked on surface rights issues for 30 years, says he heard at a presentation by the Alberta government earlier this year.

Wilson was listening to a representative from Alberta Environment and Parks give a lecture entitled “An analysis of Alberta’s Conservation and Reclamation program — does the program work as intended?”

The answer, in short, was no.

Daryl Bennett, a director at a group called Action Surface Rights, was there too. What he heard about the ecological condition of former wellsites — which had been officially certified as reclaimed — was alarming.

The government’s own research studied wellsites where reclamation certificates had been issued — and found they were nowhere near back to normal.

Nor were they meeting the government’s own regulations about the condition of the land.

Daryl Bennett, director of Action Surface Rights, poses beside inactive oil and gas infrastructure near Taber, Alberta. Sites like these need to be plugged and reclaimed before they can get a reclamation certificate but research shows certificates have been handed out even when adequate reclamation work has not taken place. Photo: Theresa Tayler / The Narwhal

There are currently no legislated timelines requiring when an oil and gas company reclaims a wellsite. Last month, Alberta’s Minister of Energy said she is “looking at targets and timelines,” for when reclamation is cleaned up, but did not herself commit to a timeline to implement any new rules.

In the meantime, companies are faced with the same trade-off they’ve had for years — continue to pay annual rent to the landowner where the well is located, or pay to clean up the site.

But as the government study found, the ecological and agricultural effects of industrial activity may linger — seemingly indefinitely — even if a company chooses the latter.

This has left some to wonder if the regulator has been allowing industry to get away with sub-par reclamation efforts — for decades.

Automatic approvals

The Alberta Energy Regulator issues reclamation certificates to companies that apply for them. For the vast majority, no inspection by the regulator is necessary — just the required paperwork, signed off on by a certified practitioner. Most applications are approved by the regulator automatically.

Alberta has accumulated more than 100,000 wellsites that have received reclamation certificates — or that are exempt from reclamation based on their age — during the past 50 years. The liability for these sites eventually reverts back to the taxpayer.

And this doesn’t include the massive backlog of inactive wells in Alberta. Officials within the regulator tasked with ensuring oil and gas wellsites are cleaned up have privately pegged the bill at as high as $100 billion.

The presentation Wilson and Bennett saw was about a pilot project, conducted by Alberta Environment and Parks. It looked at 73 wellsites from across Alberta, representing forested, cultivated and grassland landscapes, that had been issued reclamation certificates.

Some sites had been certified as reclaimed as many as 54 years ago, others as recently as 2011.

The presentation warned that if reclamation hasn’t truly restored the landscape, the province could potentially face an even larger bill in the future. “Certified site liabilities will begin to transition from industry to public,” it concluded, adding, “public interest is not served as intended.”

The research examined whether the sites studied had met the regulated objective of returning a wellsite to “equivalent land capability” to ensure that the ecological, agricultural or other productive capacity of the land is restored.

In test after test, the sites were found to be in worse condition than nearby undisturbed areas assessed for the sake of comparison — even the sites that hadn’t seen any industrial activity for decades.

But when The Narwhal asked the Alberta Institute of Agrologists for permission to view video of the presentation, the Institute declined, adding, “the topic ended up being a bit of a contentious issue.”

“There was unwanted negativity towards [the] findings.”

A ‘reclaimed’ oil and gas well in Yellowhead County, 250 kilometres west of Edmonton, Alberta. The landscape has not been returned to its former state. Image: Screenshot / Google Maps

‘Gradual downward spiral’

Mike Smith, a retired reclamation inspector, knows about that kind of unwanted negativity.

The Narwhal met with Smith and his wife, at their home in Wainwright, to talk about his storied career.

Smith retired five years ago, after working for the Alberta government for over 36 years — in Hanna, Grande Prairie and Wainwright.

When a company applied for a reclamation certificate, Smith would head out into the field to see if the reclamation was up to snuff, and to see if the site was worthy of being certified.

“When I first started with them in 1976, they didn’t even issue us shovels,” he told The Narwhal. “We used the toe of our boot.”

Mike Smith looks through notes and records he collected during his career as an inspector for the Alberta government at his home in Wainwright, Alberta. Photo: Amber Bracken / The Narwhal

At that time, he said, he was tasked primarily with ensuring a company had cleaned up the debris leftover from drilling — metal casings from the well, caps, cables, random debris — and that they had leveled off the ground so farmers could plant new crops.

“We’d go out with the landowner and see if it was smooth enough for him to farm,” he explains. A second local inspector would accompany him, representing the county or municipal district.

It was a job Smith took seriously.

“I would have to look at it through my own eyes.” He’d ask himself, “if I owned this land, would it meet my standards?”

Smith loved his job, he told The Narwhal. “It felt like I was doing something worthwhile.”

But reclamation inspections have changed dramatically. At first, Smith thought things were improving — he was issued a shovel, for starters — and it seemed like reclamation was being taken seriously.

“There was lots that was happening that was good,” he said, “until Ralph Klein.”

Since the 1990s, according to Smith, Alberta’s reclamation program has been in a “gradual downward spiral.”

By 2003, Smith’s job changed dramatically. He would no longer go out to inspect a site before a reclamation certificate was issued.

Instead, the majority were expected to be done from his desk. He was tasked with auditing approximately 15 per cent of the applications.

“You didn’t see the soil anymore. You didn’t get to feel it, you didn’t get to look at it,” he told The Narwhal. “You were scrolling.”

“We weren’t happy, let’s put it that way,” he said, when asked about the morale of inspectors at the time.

Pressure to pass audits

When Smith did get to out to a site, he might find gas leaks or evidence of soil compaction — or that crops and other vegetation weren’t growing properly.

“That’s still lasting,” he said. “Those problems are still there.”

“Many of the applications that I audited failed,” he told The Narwhal. Still, he said, failing sites was often not encouraged by his employer.

“It was tremendous — the pressure you received,” he said, of feeling compelled to issue sites a passing grade. He wasn’t, as he put it, a “fan favourite,” among oil and gas companies seeking certificates.

At one point, he said, a company that owned a wellsite that he had failed complained to his director. He remembers one of his bosses telling him, “Mike, work with these people.”

For Smith, the message was clear: “Get these things through.”

Smith was not alone in the people The Narwhal spoke to who expressed similar concerns.

“The oil company has an agenda,” he said. “They want to get a reclamation certificate.” Once a reclamation certificate is issued, oil and gas companies no longer have to pay rent to the landowner where the well was located — and the liability is off their books.

“This has been a problem for me for many years.”

Mike Smith at a flooded oil lease site in Wainwright, Alberta. This site has been suspended, according to the regulator. Smith lives nearby and drives by the site occasionally, to see if any reclamation work is being done. It isn’t. He’s seen plenty of contamination issues over his career. If no one checks, he worries about the long term recovery of sites. “Those problems are still there,” he says. Photo: Amber Bracken / The Narwhal

Mike Smith pages through his records at his home. Photo: Amber Bracken / The Narwhal

“We have some of the best legislation on the environment,” Smith told The Narwhal. “But we don’t have the enforcement.” Photo: Amber Bracken / The Narwhal

In 2013, all inspection and enforcement was taken over by a newly created arms-length corporation — the Alberta Energy Regulator — and Smith had had enough. “I submitted my request to retire. I could see what was happening… I couldn’t put myself in that position, where I would be beholden to industry.”

“We have some of the best legislation on the environment,” he laments, acknowledging that reclamation criteria have improved over time. “But we don’t have the enforcement.”

‘Automated’ review process, no human regulator needed

Until 2003, reclamation certificates were only issued after a government inspector like Smith had gone out to a wellsite to review the application, collect data and interview landowners.

But by 2003, the government had accumulated a large backlog of pending approvals. And with only 15 government inspectors at the time, they decided the most efficient way to speed up the process was to rely, essentially, on industry self-regulation.

With a backlog of close to 30,000 wells that had applied for reclamation certificates — and another 18,000 pipelines — the government was bogged down. “We weren’t going to be able to keep up with the program with the demand we were anticipating,” a spokesperson told the Globe and Mail at the time.

Getting rid of government inspectors, a spokesperson said, would more than double the number of certificates that could be issued annually. In its place would be steeper fines, random audits and an increased liability period.

Five years later, the regulator began requiring “professional sign off,” by a contractor hired by companies, in order for an application to be submitted.

Fast forward to 2018, and the Alberta Energy Regulator — funded by industry and whose board was, until recently, helmed by chairperson Gerard Protti, formerly a founding president of the Canadian Association of Petroleum Producers (CAPP) — is still trying to speed up the process.

The regulator is responsible for reviewing tens of thousands of energy development proposals annually, conducting inspections to ensure industry is compliant with government standards, administering penalties for non-compliance and conducting hearings on proposals. In short, the corporation “oversee[s] all aspects of energy resource activities” — no small feat.

The regulator has introduced new procedures to speed things up.

Today, it requires only that companies submit the required paperwork using an online system called the “OneStop Reclamation Certificate and Onestop Application tool.”

Eighty percent of applications proceed with a standard, “automated review” of the application — no human regulator needed, and certainly no field visit.

A video released by the regulator last year lauded the “administratively friendly” automated online platform that would mean “low-risk applications processed in minutes.”

https://www.youtube.com/watch?v=U0rEss_BmSI&t=72s

“Not kidding,” the video added.

The video advertised $7 million in annual savings and advertised that it would enable “25,000 pipeline applications processed annually — automatically.”

The video celebrated how easy it would be for industry to apply for reclamation certificates.

“Hello easy drop-down menus,” it boasted.

The regulator, which declined The Narwhal’s request for a phone interview, defends its move to increased efficiency. “For Alberta to be competitive, we need to enable further development by removing unnecessary costs in our regulatory system, while still maintaining high standards for environmental protection and public safety,” Samantha Peck, a spokesperson for the Alberta Energy Regulator, said in an e-mail.

“To improve efficiency, the [regulator] is focused on improving application turnaround timelines, ensuring modern, effective requirements, and continuing to transform how we operate in order to keep up with market and technology changes that affect industry,” she added. (After two weeks of back and forth, this was the only question the regulator was able to answer by press time.)

It’s long been clear that the regulator takes much of its direction from industry.

“The private sector is placing increasing pressure on regulatory bodies to… simplify cumbersome regulatory processes,” the regulator’s former head told the industry magazine Daily Oil Bulletin last November.

Oil and gas companies, he continued, “are asking us to be innovative in our regulations.”

‘Surprisingly little research’ done on reclamation

The regulator may well have heeded industry’s requests for simplifying cumbersome regulatory processes, but the pilot project from Alberta Environment and Parks — which has not committed to conducting any further field research — appears to be ringing alarm bells about the reclamation process.

This pilot project is one of the first of its kind to actually attempt to establish whether reclamation has been successful in returning sites to “equivalent land capability.”

Anne McIntosh, an assistant professor of biology at the University of Alberta, worked on the pilot project. “What do we already know? Very little,” she told The Narwhal. “Surprisingly little research has been done on reclamation.”

“I was just shocked when I started on this project.”

A flooded and inaccessible oil lease site in Wainwright, Alberta. Sites like these need to be reclaimed, but there are currently no timelines in Alberta for when a company needs to clean up a site. Photo: Amber Bracken / The Narwhal

The project sought to establish the “ecological recovery” of a site, using various methodologies to determine if reclamation had brought the area back to the original, pre-drilling condition of soils and vegetation — as is required by legislation.

Researchers took samples from old wellsites — looking at soil condition, crops, plant life, noxious weeds and tiny microorganisms — then took the same samples not far away, to establish a baseline. The research involved “goes beyond what’s done as part of the reclamation assessment process,” according to the project’s director.

They then calculated what’s known as an ecological recovery score — assuming the higher the score, the closer it might be to actually achieving the legislated requirement of “equivalent land capability.”

The results are startling.

The project found that over two thirds of the sites — all of them certified as reclaimed— in forested and grassland areas had recovery scores of less than 50 per cent.

In forested areas, for example, 90 per cent of wellsites studied had recovery scores of less than 50 per cent when it came to soil, meaning the soil was substantially more compact, had a higher pH and was generally in worse condition than adjacent reference sites.

And when researchers looked at soil mesofauna in agricultural areas — the tiny invertebrates like mites and nematodes often used as indicators of soil health — they found much lower concentrations at reclaimed wellsites.

On croplands, some wellsites were found to be “unsuitable” for crop production — despite being officially reclaimed.

Drone images presented at the conference showed examples where former wellsites could clearly be seen from above, their exact outline visible through the degradation of crops that have been planted on top of them — though they were certified as reclaimed more than twenty years ago.

A drone shot used in the government presentation, showing ineffective reclamation. Image: Alberta Environment and Parks

The implications of the government’s findings could be far-reaching.

If the pilot project’s preliminary results are indicative of what’s going on in the rest of the province — and researchers are careful to note that they can’t make assumptions about the bigger picture — the true costs of reclamation could continue to increase well into the future.

When asked for details, Alberta Environment and Parks’ Environmental Monitoring and Science Division initially responded by e-mail, noting that “although reclamation activities are intended to re-establish the capability of the land, important elements like plant and bird communities, soil properties, and nutrient cycling may not be fully established for years or even decades.”

Alberta Environment and Parks declined to make the scientist who gave the government presentation available for an interview with The Narwhal, saying “we are not able to get you in touch.”*

In a later interview with Dan Farr, Alberta Environment and Parks’ Director of Biodiversity and Ecosystem Health Sciences — who oversees the pilot project — told The Narwhal he’s “not surprised” that wellsites differ from reference sites, and declined to comment on the implications of the project for the reclamation certificate process.

When asked if the preliminary results of the research suggested reclamation certificates were not ensuring equivalent land capability — as is the requirement — he paused.

“Equivalent land capability,” he noted, “is more qualitative than quantitative.”

“If we consider equivalence to [mean] equal ecologically,” he said carefully, “then the answer is clearly no.”

But if it is interpreted to mean the land “delivers similar functions,” he said, then one needs to look, for example, at whether “cultivated lands grow crops.”

He acknowledged that the government’s findings indicated that many wellsites had reduced the land’s ability to grow crops.

“It looks like there’s a legacy related to the fact that there was a well pad there before,” he concluded.

‘Not recovering with time’

According to McIntosh, sites examined in the government pilot project often show a “halted or arrested successional trajectory” — meaning they are on a slow, or virtually non-existent, path to full recovery.

“We’ve always sort of thought if you gave them enough time, they’d go back [to their previous condition],” she said.

Terry Osko, a reclamation research consultant with a PhD in wildlife ecology, who has worked in the field for 20 years is hesitant to draw too many conclusions about the future. “Moving forward there should be fewer and fewer,” sites that show such stilted recovery, he told The Narwhal. Site reclaimed today, he said, “are probably not going to be in as rough of shape as ones that were from the 70s.”

Others worry that no one is checking that sites certified today are recovering.

An orphaned oil and gas well near Taber, Alberta. According to the Government of Alberta’s research, well sites like these, once reclaimed, often show long-term negative effects, despite regulations that require “equivalent land capability.” As it turns out, many years of industrial activity are difficult to undo. Photo: Theresa Tayler / The Narwhal

Alberta Environment and Parks’ Land Policy Branch told The Narwhal by e-mail that “no policy changes are being contemplated at this time for long-term monitoring of lands” that have received reclamation certificates.

Researchers, presenting in New Orlean this past August at the Ecological Society of America’s annual meeting, made the government project’s conclusions clear.

“Wellsite development impacts can be long lasting and may remain for 50 years or more after reclamation,” they noted.

“Some sites are not recovering with time.”

“Our goal is getting the science out,’ McIntosh told The Narwhal. “It’s in the government’s hands to decide to what do with it.”

An Alberta oil and gas well lease from 1949 that states land used must be restored “to the same condition.”

Alberta’s 1978 rules stated oil and gas sites must be reclaimed “to a condition of as good as or better than the original site.” Industry has long promised to restore oil and gas well sites but government research finds this is most often not the case. Image: Report of the Select Committee to Review Surface Rights, 1981 / University of Alberta Rutherford library

Desktop audits

Despite the poor scores of reclaimed sites studied by the government, less than three per cent of certificates have been cancelled by the regulator since 2016.

Some twenty per cent of applications are audited. An audit can mean only a desktop review of the application done by a human “reclamation assessor” — were all the application’s fields filled out correctly? Is the site location correct? — but does not imply any field work is done by the regulator.

The regulator declined to comment on the number of field inspections they have conducted.

Information obtained by The Narwhal found the number of field inspectors — who can accompany reclamation assessors on site inspections — has declined by 16 per cent since the Alberta Energy Regulator took over enforcement from Alberta Environment in 2013.

The regulator was unable to tell The Narwhal how many reclamation assessors it currently employs.

This means that the majority of on-site evaluation is left to the company, and the professional tasked with signing off on the application — ranging from foresters to agrologists to engineering technologists.

According to the government’s presentation, it’s a “professional judgement-based system,” rather than an “evidence-based” system.

10 different people, 10 different ways to interpret something

Terry Osko, the reclamation research consultant, has faith in his colleagues. “I think it would be quite rare to have shoddy work done in the field because [consultants] are good people by and large and all regulated by professional organizations,” he told The Narwhal.

The Alberta Institute of Agrologists is one of those professional organizations. It’s made up of about 2,800 members, according to David Lloyd, the Institute’s CEO.

Lloyd told The Narwhal that the organization’s members are held to a code of ethics, and the profession has a new set of standards meant to “identify the knowledge, skills, experience and the kinds of judgment or decisions that one should make.” The standards are meant to be “self-assessed,” he said and “are not punitive, but supportive.”

He added that the Institute plans to start “random practise reviews” of its members in the very near future — something that no other professional organizations in the field do.

“I believe our members are ethical and competent,” he said. “And if they’re not, we’ll hear about it… from landowners [or] another professional colleague.”

A flooded and inaccessible oil lease site in Wainwright, Alberta. Photo: Amber Bracken / The Narwhal

If a professional is reported to have violated their code of conduct, and an investigation finds the claim to be credible, the Institute has a variety of punitive tools available, according to Lloyd — ranging from revoking or suspending professional practise permits, levying a fine to requiring courses be taken (like an ethics course).

But some worry the regulator has insufficient capacity to oversee industry and the consultants it contracts. As one consultant, who asked to remain anonymous, put it, “the [regulator] is just watered down. It doesn’t have the capacity. It’s jack of all trades, master of none.”

Reclamation consultants, he said, need to be prepared to be “challenged” by companies eager to “get that liability off the books.”

“I’ve heard that the clients of our members can sometimes put pressure on [them],” Lloyd told The Narwhal. “It’s up to [the professionals] to decide how to handle that as professional. They have a requirement to make the right decision.”

When it comes to interpreting standards, some worry there’s too much leeway. One agrologist who spoke with The Narwhal on the condition of anonymity, said “10 different people [have] 10 different ways to interpret something.”

‘I’m not setting it on a trajectory to heal’

One consultant who has worked in reclamation in Alberta’s boreal forests for more than 10 years — who asked his name not be used because he’s “not old enough to retire” — told The Narwhal he’s very concerned about the standards used when he’s asked to assess a site.

“Disturbed sites are extremely hard to reclaim,” he said.

He works in forests, and sees a disturbing trend in re-planting. “What we’re doing now in reclamation — what I’m required to do — does not come anywhere close to [proper reclamation],” he told The Narwhal.

“I’m not setting it on a trajectory to heal. They’re monocultures.”

He acknowledges that reclamation criteria have improved over the years — a company can no longer simply plant an area to grass if it used to be forest, for example — but he still sees issues with the reclamation criteria.

“Many of the decisions they’re making are based on money,” he says, explaining that the “simplest” or “easiest” species to replant are often chosen, with very little regard for biodiversity, and that there is too often a lack of training of the people doing the reclamation, so that many replanted trees often die.

When he goes out to check if a forest has been restored on a site, he just needs to find “some woody species,” even if the replanted trees have died, he explains. Rose bushes will often do. If he finds some, he says, “I can still certify it.”

“That is nothing like the forest we cut out.”

While he’s adamant this has negative impacts for the area, he has no way of following up, as monitoring isn’t required once that certificate is issued. “I don’t know how long that site is going to be stagnated for,” he laments.

“I’ve never had to return to a site,” he said. “I’ve had sites where I wished I could have, but I didn’t have to, because they passed.”

‘Still a lot of cowboy stuff’

Another consultant who also spoke with The Narwhal on the condition of anonymity — a professional agrologist with 20 years of experience in the field — said that he was mostly concerned with the front-end of oil and gas activity: the construction of wellsites.

“When it comes to any sort of disturbance of any kind of ecological system,” he said, “you’re destroying the natural ecosystem.” The goal, then, is to try to do the best you can to get it on the right path from the get-go.

But he’s concerned that there’s little environmental input until a company decides it wants to reclaim a site.

The attitude during construction, he said, is too often, “move the dirt, get it out of the way, get the pad drilled, get it producing.”

While regulations and ideas about reclamation have improved over time, he said, “[contractors] just do what they did ten years ago.”

“There’s still a lot of cowboy stuff.”

He’s concerned that the majority of the environmental input is thrust onto reclamation, and that education and pre-planning could help solve a lot of problems. “They’re on the back end, trying to fix what happened on the front end.”

Effort varies

Osko, the reclamation research consultant with a PhD in wildlife ecology, has a pragmatic approach. “Since I started back in 1999, the improvement in practise is taking off kind of exponentially,” he told The Narwhal.

But the reclamation process could, in his mind, still be improved — perhaps a preliminary reclamation certificate could be issued, for example, with a required follow-up before it’s finalized. The timing of that, he added, could take into account the expected recovery time, based on site type or local ecology.

“It varies within industry, within companies, and with sort of the economic situation, how much effort is put into the process,” he noted.

And when it comes to the notion that companies will only meet the minimum standard required of them, he said, “everybody pays income tax, nobody wants to pay more income tax then the government wants them to pay.”

But he’s encouraged by companies he’s worked with who, he said, are motivated to do more than the minimum. There is, he told The Narwhal, “both economic and social incentive for responsible stewardship.”

Overall, Osko is optimistic that industry is on an upwards trajectory. “Some days I’m discouraged by what I see, but I stay in it because I’m overall encouraged.”

‘Small but numerous’

Though each individual wellsite is small, the cumulative effects of so much industrial activity may be much larger.

As a 2017 study published in the journal Forests put it, the footprints of oil and gas activity are “small but numerous, creating many disturbances across a large area.”

“They’re sort of little postage stamps peppered across the landscape,” said McIntosh.

There are approximately 450,000 wells in Alberta, roughly one for every 1.4 square kilometres — and that’s not including the tens of thousands that have already been issued reclamation certificates.

Billions are dollars need to be spent in Alberta just to get wellsites to the reclamation certificate phase — and there are concerns about whether industry will be able to pay.

And some wonder if the buck will stop there. If certified sites aren’t recovering ecologically — or agriculturally — critics worry that Albertans have given up more than they signed up for.

For many, there are questions — shouldn’t the regulator be checking the work of industry and private consultants? And who is ensuring that reclamation is truly a restoring a landscape, if no one ever goes back to find out?

Over the course of numerous interviews, one particular sentiment came through loud and clear: Albertans deserve to know whether the province’s reclamation program is functioning as intended — and whether anyone is checking to make sure it works in the long-term, too.

Mike Smith holds the shovel he used in his work as a well site inspector. Photo: Amber Bracken / The Narwhal

A shovel head that Mike Smith had used during his career as an inspector for the Alberta government. Its label reads, “snapped under pressure.” Photo: Amber Bracken / The Narwhal

‘Snapped’

Back in Wainwright, Mike Smith warms up some of his wife’s soup for lunch, then goes down into his basement to retrieve some of the mementos he kept from his long career. He wants to show us the inspirational quotes he tacked up next to his desk, and a shovel he used to inspect sites for years.

After checking the soil at countless sites, the shovel finally broke, so Smith — sentimental about it after all those years — cleaned it up, took it back to his office and affixed a message to it.

“Snapped under pressure,” it reads.

The shovel hung on the wall next to his computer until he retired.

*Update December 7, 2018, 9:30am pst. To address reader questions, this article was updated to note that Alberta Environment and Parks declined to make the scientist who gave the presentation related to well reclamation available to The Narwhal for an interview.

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Taxpayers are being put at serious financial risk by gaping holes in B.C.’s mining regulations that allow companies to underfund mine remediation or disaster costs, says a new report by economist Robyn Allan.

The report, funded by the Union of B.C. Indian Chiefs, describes financial assurance policies for mine site reclamation as “woefully inadequate” and estimates there is more than $1.5-billion in unfunded liability — meaning taxpayers are on the hook both for mine site reclamation, when a company leaves a contaminated site, and for catastrophic events when a company is unable to pay.

“A regime to ensure mine owners have sufficient financial resources to pay for environmental damage and third-party losses from unintended mine accidents is non-existent,” wrote Allan, former CEO of ICBC and former senior economist for B.C. Central Credit Union.

The UBCIC report comes on the heels of a scathing assessment of B.C.’s mining practices by B.C. Auditor General Carol Bellringer and renewed pressure from U.S. politicians to have transboundary mines along the Canadian/U.S. border come under the scrutiny of an International Joint Commission.

Bellringer estimated a shortfall in financial security deposits of $1-billion, but Allan said the Ministry of Energy and Mines had $1.3 billion in site reclamation costs not funded by mine operators by March 2014 and the province has assumed responsibility for reclaiming abandoned mines which will cost another $275-million.

The costs could be higher today, but exact figures are not known as the province no longer makes the figures available, Allan said.

In theory, B.C.’s rules are based on polluter-pay principles, but, as there is no effective system of financial assurances to hold parties liable, B.C. residents and First Nations are picking up a burgeoning bill for mining-related environmental harm, Allan said in the report.

“The province’s failure to ensure that whenever polluters pollute, polluters pay, represents an obvious cost to taxpayers because taxpayers end up bearing the burden instead. If the cost does not fall to taxpayers, then it falls to society along with much of the clean-up, compensation, remediation and/or reclamation going unattended,” she said.

To make matters worse, provincial policies increase the risk of disasters as, with no clear liability, some companies cut corners and flout safeguards, according to Allan.

“In contrast, when a mining operator is unequivocally held financially responsible for its environmental impacts, positive outcomes result,” she said.

Under B.C.’s rules there are few inducements for companies to invest in techniques such as dry-stacking tailings that lower reclamation costs and reduce the risk of spills because the operator may never be held accountable if disaster strikes, Allan said, adding she wants to see companies post full security bonds for reclamation costs.

Other recommendations in the report include requiring companies to hold sufficient financial assurances to meet the full costs of environmental damage and third-party losses from mine accidents — with companies annually providing proof of those financial assurances — and creation of an industry-funded pool to cover catastrophic events if a polluter is unable to pay.

A claims process, independent from the mining company, should be set up for those who suffer environmental damage or losses and companies should publicly report every year on their reclamation plans, risk assessment and amount of security posted, Allan recommended.

Currently the province relies on reclamation estimates by mine operators and, despite the risk presented by the increasing number and growing size of tailings storage facilities, there is no requirement for mining companies to undertake an environmental risk assessment, says the report.

“Neither is there a requirement that companies provide proof to regulators that access to sufficient financial resources, including insurance, exists to meet obligations if an environmental harm event occurs.”

Grand Chief Stewart Phillip, Union of B.C. Indian Chiefs president, said B.C. is enabling a dangerous disregard for environmental monitoring and protection by letting mining companies off the hook.

“Other industrial sectors treat accident insurance and security deposits as a routine and fundamental cost of doing business and, if a warehouse catches fire, a pipeline bursts or a factory has to be shuttered, companies have money set aside to respond effectively and immediately,” Phillip said.

Instead of following the lead of jurisdictions such as Quebec and Alaska that insist on full funding for reclamation — something that creates a powerful incentive for companies to focus on safety and best practices — B.C has placed taxpayers at huge financial risk, Phillip said.

“Factor in the poor performance, lack of enforcement capacity and muddled political direction of the ministries of energy and mines and environment and the failure to ensure all mines are safe and held accountable and British Columbians have a great number of reasons to mistrust the mining sector,” he said.

UBCIC is calling on the B.C. government to adopt Allan’s and Bellringer’s recommendations.

After Bellringer’s report was made public, Mines Minister Bill Bennett said he accepted most of the recommendations, except for creation of an independent mining compliance office, and he agreed that the province’s compliance and enforcement regime needed improvement.

Bennett has also committed to acting on many recommendations that followed the collapse of the Mount Polley tailings dam in August 2014 — a disaster that spilled millions of litres of sludge and mine waste into Quesnel lake and surrounding waterways in central B.C.

The ministry did not respond to questions from DeSmog Canada on the Allan report in time for publication.

The report is underlining concerns of Southeast Alaskans who have watched a proliferation of mines along the B.C./Alaska border and, as an example of the lack of enforcement in B.C., they point to continued pollution, stretching over decades, from the Tulsequah Chief mine where rusty, acidic water is draining into a tributary of the Taku, one of Alaska’s major salmon producing rivers.

The report underscores existing grave concerns about the lack of financial assurances, said Heather Hardcastle of Salmon Beyond Borders, who wants to see an adequate bonding system in place.

“We are demanding that the state, the province and both federal governments come up with a mechanism to make sure we will be protected downstream,” she said.

“This is why we need an international solution to an international problem. The money has to be set aside to adequately cover a catastrophe that most likely will happen.”

The Allan and Bellringer reports are timely as the issue is gaining increasing traction with both federal governments, Hardcastle said.

Chris Zimmer of Rivers Without Borders said the reports are significant because mines in the Taku, Stikine and Unik watersheds will have long-term acid mine drainage and water treatment needs that are not currently funded.

“It’s now more important than ever that Secretary (John) Kerry work with the Canadian federal government to ensure Alaska’s water and salmon are not harmed by mining in B.C.,” he said.

Image: Tulsequah Chief mine on the banks of the Tulsequah River, a tributary of the Taku/Rivers Without Borders.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Critics cried foul last week after oilsands giant Syncrude was awarded the inaugural Towards Sustainable Mining Environmental Excellence Award at the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) industry gala held in Vancouver on Monday, May 12.

The Fort McMurray-based company was recognized for its work in land reclamation, the attempt to re-establish ecosystems destroyed during oilsands development.

The company was specifically lauded for its work with fen wetlands, a sensitive and complex peat ecosystem that is a key part of the Boreal Forest and the local watershed, through its Sandhill Fen Research Watershed Initiative research project.

“We're quite pleased to have been selected. We see it as a demonstration of our commitment to improving our reclamation process,” said company spokesperson Will Gibson by phone. “It underscores our need to meet the public's expectations, and part of that is constant improvement.”

But, for some, labelling any work done in the oilsands as 'sustainable' may be premature, if not entirely contradictory. 

An 'industry award'

“It's industry giving awards to industry,” said Carolyn Campbell of the Alberta Wilderness Association, a conservation group working to conserve ecosystems and wilderness in the province. “It's misleading to say they are taking a significant approach to sustainable mining. Tar sands mining is inherently unsustainable. The push for fossil fuel development is destroying the boreal wetlands.”

For Campbell, attempts to bring back ecosystems that have been under pressure from mining for decades is too little too late. “This needed to be considered 40 years ago,” when the first oilsands developments began, said Campbell.

Most people may have heard of peatlands – Canada is the world's largest producer of peat moss for horticultural purposes – but few know about the importance, and uniqueness, of fens. While similar to peat bogs, fens are distinguished by a high water table and a slow, regular flow of water which makes them much more rich in minerals and much less acidic than bogs.

Fens support a specific set of vegetation and animal life and, because of these unique characteristics, are considered much more difficult to reproduce than other peatlands – which already present an enormous ecological challenge. Fens are an integral part of the northern Boreal ecosystem, which itself is tied to the health of Canada's important watersheds, like the adjacent Athabasca and Peace River watersheds. While fens are a small part of the entire Boreal forest, their loss has a significant impact on the surrounding ecosystem.

Their importance isn't lost on Gibson, who stressed in the interview that Syncrude is committed to monitoring their 52 hectare test site for the next 10 to 20 years in order to better understand and replace the fens that have been removed during oilsands development.

Gibson strongly rejects the ideas that Syncrude's reclamation work is simply window dressing. “Over half of our [research and development] spending goes into reclamation projects,” he said, adding, “would people prefer we do nothing?”

Reclamation cannot offset conservation

“Of course, they shouldn't be doing nothing,” Eriel Deranger told DeSmog Canada in a telephone interview. Deranger is a member of the Athabasca Chipewyan First Nation (ACFN), located over 200km northeast of Fort McMurry and directly downstream from the centre of oilsands development. Her traditional territory lies in the Athabasca watershed and has been significantly affected by industrial development to the south. 

“Reclamation work needs to be done. But it can't be used to justify the further expansion of the tar sands,” Deranger said. She is also a spokesperson for the annual Healing Walk, which brings together Indigenous and non-Indigenous people to visit the oilsands region and discuss industry's impacts.

For Deranger, the question isn't only about whether the fens can eventually be brought back, but the immediate and ongoing impacts that are justified through what is branded as 'sustainable development' of the oilsands.

The destruction of key parts of the northern Boreal ecosystem has a direct impact on the ACFN's and other First Nations' access to their traditional territory and to their way of life.

“The real issue,” she said, “is that these projects are going to be erasing these ecosystems for 50 to 100 years. That also means the loss of our treaty rights for 50 to 100 years.” And while it's clear that there have been advances in reclamation techniques, she said, the pace of development in the oilsands has greatly outrun any improvements.

The uncertain science 

Recent scientific reports have presented mixed results about the potential for reclamation. A 2013 study from the Université de Laval's Peatland Ecology Research Group found that the various mosses found in peat fens were able to withstand water with higher salt contents – similar to what they would be exposed to in reclamation areas – at a higher degree than expected, which researchers felt showed a strong indication that fens could be re-introduced post-mining.

At the same time, they highlighted that the study was done in limited laboratory settings, and that the complexities of a natural environment would complicate the re-establishment process.

Even if fens can be re-introduced, another peer-reviewed report questioned whether reclamation efforts could ever truly re-create or undo the damage of the original fens in the first place.

In a 2012 paper, researchers Rebecca C. Rooney, Suzanne E. Bayley, and David W. Schindler from the University of Alberta concluded that regardless of the ability to re-establish fens, the destruction of peatlands – which store a large amount of carbon in the ground, acting as a massive natural carbon sink – would result in the release of seven years worth of mining and upgrading emissions at 2010 production levels into the atmosphere.

They also noted the difficulty of recreating the water flow necessary for fens will mean that any eventual reclamation results would cover 65 per cent less territory than fens covered pre-mining.

Of the total area currently mined for oilsands, only 0.12 per cent of the land has been certified reclaimed, with some seven percent currently in progress of being reclaimed. The only certified reclaimed site is Sycrude's Gatweay Hill, which received the official reclamation distinction from Alberta Environment in 2008.

While the site has been vaunted as an industry success, Deranger sees it as a disturbing precursor to reclamation projects as the future for her people's territory. Gateway Hill, she said, is a clear sign that industry-styled reclamation projects cannot be used as an offset for protecting untouched land.

“I see fenced-in areas that have no relevance or value to First Nations people. They're fenced-in regions that they tout as a conservation zone,” she said.

"These areas were once areas that housed wild buffalo, that hunters and trappers utilized, that fishers utilized, that we considered sacred sites. And we're talking about creating a big sign that says, 'Look at the successes of this industry!' Why don't we juxtaposition it with, 'Look at what industry has destroyed.' Frankly, it's a little bit absurd and insulting."

Image Credit: Syncrude's Gateway Hill from CAPP

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.