Funds to reclaim oilsands land fall short: NDP
Not enough security, warns auditor general
By Jason Fekete, Calgary Herald March 1, 2011
Leaked documents show the Alberta government will collect $400 million less from energy producers over the next nine years for oilsands reclamation, the NDP charges, despite the auditor general warning the province is financially at risk.
Alberta's environment minister acknowledged Monday the province will announce changes to its financial security policies for oilsands mines, but stressed it will improve transparency and actually collect billions of additional dollars over the long term.
The Tory government's proposed Mine Financial Security Program would overhaul how the province collects cash deposits from oilsands developers, money used to ensure that land disturbed from energy production is reclaimed to around its original state.
According to leaked documents obtained by the NDP, the new program -at the request of oilsands companies -would collect a low security deposit in the early and mid-life of an oilsands mine, with the full amount procured later in the life of the project.
The government would collect about $400 million less between 2011 and 2020 under the new initiative, despite repeated warnings from Alberta's auditor general over the last decade that the province isn't securing enough financial security for oilsands reclamation.
"Albertans cannot trust this Tory government to stand up for their best interests when it comes to dealing with the energy industry," said NDP environment critic Rachel Notley. She attacked the government for negotiating the new agreement in secret with petroleum producers. "All Albertans should be very concerned."
While the proposed new program would see the government collect billions of dollars more in reclamation security over the next 50 years, the NDP and environment groups argue the levy remains woefully inadequate and leaves Albertans financially at risk for restoring the land.
The new plan would implement interim deposits of $30 million for oilsands mines without upgraders and $60 million for projects with upgraders, according to the document.
Environment Minister Rob Renner said Monday it makes sense to collect more of the levy in the later stages of an oilsands mine's development because the reclamation costs are the highest at a point when the resource is depleting. The bitumen contained within the mines remains financial security for the province in the earlier stages, he said.
"It's much more critical that much larger deposits be held toward the end of the life of a mine than at the early stages," Renner told reporters. "At the end of the day, there's significantly more (cash collected)."
The government has been reviewing its oilsands security program for two years, he noted, and expects to announce changes within two or three weeks.
Alberta Environment is also looking at providing additional status updates on reclamation projects so people better understand the work being done by industry. To date, only one reclamation certificate has been approved in the oilsands.
"I'd like to see government recognition throughout the different stages of the reclamation process," said Don Thompson, president of the Oil Sands Developers Group, an industry lobby organization. "That will help public perception."
Last fall, the Alberta-based Pembina Institute warned in a report the oilsands security fund would have a $14-billion shortfall if the firms didn't live up to all their land reclamation commitments.
The costs to clean up the current land area disturbed by mining, which totalled nearly 70,000 hectares, could be up to $15 billion, Pembina said.
Yet, Alberta's Environmental Protection Security Fund holds just $946 million, according to the latest annual report from the provincial government, with total disturbed land from oilsands mines sitting at 66,342 hectares.
http://www.calgaryherald.com/business/Funds+reclaim+oilsands+land+fall+s...
