Farmer and rancher Teresa Paltry has two oil wells on her property leaking methane. She’s joined a request for judicial review of the Alberta Energy Regulator’s underfunded orphan well levy. (Screenshot/YouTube)

A group of rural landowners is taking the Alberta Energy Regulator (AER) to court for collecting only a fraction of the funds from industry needed to clean up orphan wells.

The AER set its orphan well levy at $154.56 million for this year — a 7% increase from the previous year. But the figure still falls far short of the $1.66 billion in closure costs estimated by the Orphan Well Association, the industry-funded organization that assumes liability for insolvent companies’ non-producing wells.

Susanna Calabrese, a lawyer with environmental law charity Ecojustice, announced the application for judicial review at a Tuesday news conference in Calgary alongside landowners Mark Dorin, Bill Heidecker, Teresa Patry and Dwight Popowich.

They’re asking the Court of King’s Bench to order the AER to recalculate the levy, in the application’s words, “to sufficiently cover the closure work that needs to happen each year to protect the health and safety of Albertans.”

Regular Orchard readers will likely be familiar with Calabrese and Popowich for their efforts to address the alleged conflicts of interests of oil and gas industry consultant, advisor to Premier Danielle Smith and AER board member David Yager through the province’s ethics commissioner and the AER’s internal mechanisms.

Dorin and Heidecker represent the Polluter Pay Federation and Alberta Surface Rights Federation, respectively, which are listed as co-applicants alongside Ecojustice, Patry and Popowich.

The group of landowners say they attempted to address the orphan well levy’s 87% funding shortfall through the AER internally, but the regulator refused to hear the case.

This time, they’re taking the AER to court, arguing that the shortfall is a violation of the Oil and Gas Conservation Act subsection 73(2), which mandates the levy “be sufficient to cover” this year and previous years’ cleanup costs, as well as any unexpected future influx to its inventory.

“The principle is simple: companies should pay for the liabilities they create, not Alberta taxpayers. But that safety net is falling further and further behind,” said Calabrese.

“The number of orphan sites continues to grow while the funding available to clean them up is not keeping pace. And when the levy falls short, the risk and ultimately the cost doesn't disappear. It gets pushed onto Albertans.”

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Calabrese noted how the orphan well inventory nearly doubled overnight with the bankruptcy of Long Run Exploration earlier this year, which added about 4,000 wells to the backlog — roughly the same number of certificates the association has issued for restoring well sites back to their original state since it was established in 2002.

NDP and conservative governments alike have provided a total of $335 million in interest-free loans to the Orphan Well Association and subsidized more than $148 million in industry’s unpaid surface lease payments to landowners.

Rural municipalities have also had to forego $250 million in unpaid property tax revenue that the provincial government says is unrecoverable.

Calabrese suggested that the levy is set so low because the nominally independent regulator is being influenced by input from government and industry advocates.

“In our view, that is an improper delegation of its legal responsibility,” she said.

Preorder my book

My new book, Dark Phoenix: The Rise, Fall, and Re-emergence of Danielle Smith, comes out Oct. 13.

I’m using every opportunity I can to remind Orchard readers to preorder it. Preorders are an importantly early step in the process of book promotion, because they signal general interest to booksellers, influencing the number of copies they purchase and how prominently they’re displayed.

Strong preorder sales will also influence the degree of media attention the book receives, providing it with further visibility.

You can preorder Dark Phoenix to your local independent bookstore through the publisher’s website. The book is also on sale via Amazon or Indigo, if that’s your thing.

If you’re in Edmonton, I’ll be celebrating the book’s release on Oct. 13 at the Aviary, where I’ll be talking to my friend and fellow freelance journalist Dani Paradis about the premier, in addition to reminiscing about the various right-wing events we’ve attended together.

Tickets are $25 in advance, $30 at the door, and include a copy of the book, which I will gladly sign for you.

Preorder to your local bookstore

Come to the book launch

The Orchard

Landowners take AER to court for underfunded…