Total Tar Sands Revenue Since 1970 - $59 Billion; Tailing Pond Cleanups Alone - $130 Billion
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For reasons to be pondered by indebted generations yet unborn, the beleaguered Alberta Energy Regulator allowed the petroleum sector to pile up massive unfunded environmental liabilities on the dubious assumption that bitumen extraction would remain profitable for decades into the future. So towering is the tally of unreclaimed tailings ponds that it is possible the largest part of Alberta’s energy sector — heavily hyped as the economic engine of the nation — never actually made any money.
Bitumen royalties paid to the Alberta government back to 1970 total $49 billion. Corrected for inflation, this figure is closer to $59 billion. This sounds like a hefty sum, except when compared to unfunded cleanup costs. Officially the AER estimates total oil and gas liabilities to be $58 billion with only $1.6 billion held in securities. Leaked documents from the AER instead peg potential cleanup costs of the tailing ponds alone to closer to $130 billion. AER recklessly allowed operators to use unmined bitumen as a financial security to eventually deal with 1.3 trillion litres of viscous toxins that have been accumulating at an accelerating rate. The volume of impounded tailings has increased 300 times since the mid 1990s and now covers more than 220 square kilometres.
Companies like Suncor have also been allowed to estimate their own reclamation costs on a timeline stretching 70 years past scheduled mine closures, and rely on unproven “water capping” plans to cover the toxic slurry with artificial lakes that somehow won’t mix with the poisonous fluids below. What could go wrong? With conventional oil giants now publicly planning for a very different future and bitumen royalties dwindled to only 12 per cent of what they were five years ago, isn’t it an appropriate time to make industry settle their tab before ordering more drinks?
Bitumen mining is not the only source of unfunded taxpayer risk accumulated under decades of friendly provincial oversight. The leaked AER presentation suggested an additional $100 billion in unsecured cleanup costs from conventional oil and gas plus another $30 billion from pipelines. Together with tailing ponds, this adds up to an eye-watering figure of $260 billion. At the current leisurely pace of reclamation, it could take 126 years to plug an estimated 180,000 abandoned wells left behind by a previously profitable industry.
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https://thetyee.ca/Analysis/2020/09/28/Alberta-Oilsands-Owe-Canadians-Far-More-Pay/