New Alberta energy minister to keep coal moratorium, considers well cleanup breaks

A pumpjack draws out oil and gas from a well head as the sun sets near Calgary, Alta., Sunday, Oct. 9, 2022. THE CANADIAN PRESS/Jeff McIntosh

EDMONTON -

Alberta's new energy minister has promised to maintain an order protecting the Rocky Mountains in the province from coal development, for now.

However, Peter Guthrie says his department is already working on a controversial program to give oil companies breaks on their royalties to clean up old wells.

Speaking at an Edmonton press conference Tuesday on funding for a hydrogen project, Guthrie said he has no plans to withdraw an order from the previous minister that restored protections for the Rockies from open-pit coal mines.

"It will stand," he said.

The 2021 order, made by Sonya Savage, restored protections to those beloved landscapes after encouragement from the United Conservative Party government led to a series of mountaintop removal mine proposals from coal companies. Those proposals were widely opposed.

New Premier Danielle Smith has mused about reopening the coal mine debate. Guthrie wouldn't say how long he'll keep the current order in place.

"I don't have an answer on that," he said. "But for now, there are no changes planned."

At the same press conference, Guthrie confirmed his department is studying an industry proposal intended to encourage the cleanup of old wells and drilling of new ones by granting royalty credits on new production based on remediation spending. Estimates suggest that if the so-called RStar program grants the $20 billion in credits industry is seeking, Alberta taxpayers would forgo $5 billion in revenue.

"We are working internally on this," Guthrie told reporters, adding any announcement is "weeks if not months away."

In an email, Alberta Energy spokesman Scott Johnston confirmed Guthrie's statement.

"We are exploring ways to help clean up some of the most expensive projects and older inactive oil and gas sites by providing more incentives to industry," he wrote. "No decisions have been made yet."

The RStar proposal has been widely criticized by energy economists, who say it would transfer money to companies who don't need it to do work that most are doing anyway. They point out energy companies are already legally obliged to clean up their mess.

The plan was also rebuffed during Savage's tenure as energy minister. She wrote then that RStar wouldn't fit within Alberta's current royalty structure and would clearly violate the polluter-pay principle, one of the foundations of environmental regulation.

Smith, however, spoke strongly in support of RStar when she was a lobbyist for the Alberta Enterprise Group, an influential association of some of the province's largest businesses.

This report by The Canadian Press was first published Nov. 8, 2022.