Frosty relations between Alberta and the federal government might have hurt the province's chance of working out a deal to keep unused oil and gas well cleanup money, said Rural Municipalities of Alberta president Paul McLauchlin.
The province had to give back $137 million of the $1 billion the federal government provided back in 2020 to go towards oilpatch remediation work because a deadline to spend the money had passed.
"Regrettably, that money could have been leveraged to decrease the environmental liability for Alberta," said McLauchlin.
"It's too bad that they're reverting it back to the federal government for sure.
"I think they had opportunities to negotiate that. But I think this is where you get that situation with strained relationships between Alberta and Ottawa probably culminated in the failure to negotiate that."
Alberta could make a "justifiable" case that given the energy industry's big contribution to Canada's gross domestic product, extending the cleanup deadline was not only in Alberta's interest, but the national interest, he said.
B.C., which got $150 million under the cleanup program, also had to return a small share. Saskatchewan was able to spend its $400 million in time. The $1.7-billion program also included a $200 million loan for Alberta's Orphan Well Association.
McLauchlin said the program helped Alberta oilpatch workers and others during the pandemic.
"It actually did some great stuff for Indigenous communities and decreased the overall liability in rural Alberta. It's too bad it couldn't have been negotiated."
The energy minister's office said in an email that it was not for a lack of trying that an agreement was not reached on the Site Rehabilitation Program (SRP).
“Alberta worked hard with a large coalition of First Nations chiefs from Treaties 6, 7, and 8 to convince the federal government to repurpose $136.6M of unused SRP funds to allow for a continuation of the Indigenous portion of the SRP program.
"This would have allowed for the reclamation of oil and gas sites on First Nations reserves, sites where the clean-up responsibility belongs to the federal government. This would have been good for the environment and good for indigenous economic reconciliation.
NDP energy critic Nagwan Al-Guneid criticized the UCP's handling of oilpatch cleanup on Facebook.
"The UCP government fails to use 137M from the feds to clean up inactive wells and are forced to return the money to the federal government," Al-Gruneid posted.
"Now the UCP wants to bring RStar and give taxpayer money to companies to clean up abandoned wells they are legally responsible to clean up.
"More corporate welfare under the UCP."
The RStar concept, which has not been implemented, proposes that energy industry companies get royalty breaks on production from new wells depending on their success cleaning up old well sites.
Critics have argued it amounts to using money that should be going to the province to incentivize cleanup work that is already a legal obligation.
