Alberta's oil and gas industry has created a $320 billion cleanup liability crisis through regulatory failures, including underestimating cleanup costs, excluding pipeline liabilities, and creating a system where companies could avoid posting security deposits. The Alberta Energy Regulator has collected only 2.6 cents on the dollar for cleanup costs, and the industry has generated $553 billion in revenue since 1970. The proposed Mature Asset Strategy, designed by industry insider David Yager, has been criticized for consulting primarily industry stakeholders (70 of 98 participants) while ignoring rural municipalities and landowners, potentially violating the polluter pays principle.
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Alberta's $320 Billion Time Bomb 💣 | The Goose Media 🇨🇦Added:
Every day, dotting the picturesque landscape of Alberta, >> [music] >> thousands of orphaned wait, forgotten, abandoned, alone.
These are Alberta's orphaned oil and gas wells, and they need your [music] help.
Without you, they could grow up to contaminate the air, land, and water [music] with dangerous chemicals, and also, maybe explode.
But, for the low [music] price of a mid-size sedan for every single household in Alberta, or possibly much, much [music] more, you can give them what they need.
A bunch of guys in a truck to come dismantle them.
Call now.
Adopt your very own orphan well today, and we'll send you this lock at least with genuine poisonous sour gas.
>> [music] >> Thanks to multiple corporate deadbeat dads who just went out for a pack of smokes and a case of Labatt 50, never to be seen from again, orphaned wells have become Alberta's forgotten children. Not counting, of course, Alberta's actual children crammed into overcrowded classrooms, because this story is about something much more important.
>> [music] >> Money.
But, the problem is much larger than wells with no owner. To stretch this already belabored metaphor past the breaking point, [music] cleaning up fossil fuel infrastructure is a multi-billion-dollar child support problem, because, [music] sadly, oil daddy doesn't actually love you. And thanks to decades of super chill regulations, this [music] problem threatens to erase the majority of gains Alberta has received from oil and gas royalties over the past half century.
That's because the industry is only paying pennies on the dollar to clean up [music] their mess. They would really prefer it if you paid their bill. Good thing Alberta doesn't need that money for health care and education, right?
>> [laughter] >> But, don't worry. The Alberta government has hired an industry insider to write the new cleanup plan behind closed doors. So, problem solved. This is the story of how Canada's [music] richest province got conned. Slowly, boringly, over several decades [music] late, in plain sight.
Hi, I'm Aaron Hagar McCay, a sad rusty pump jack leaking explosive toxic gases from below, and welcome [music] to The Goose.
Most of Alberta's oil comes from the oil sands, which I've talked about probably too many times on this channel. And that has its own cleanup cost, something Joe Rogan recently learned about on his show in what sources claim is a comedy podcast. So, we have the best industry, the most responsible industry anywhere in the world. It's been a really disgusting PR campaign by extremist environmentalists and frankly some of our competitors to try and make our industry look bad, but it's the best industry in the world.
>> Yeah, they got me. Yeah, we >> some videos on it. I was like, "Oh my god, what are they doing to the ground?
What are they doing to the earth? It looks horrible."
>> They're all It's It's all [ __ ] That's great, Joe. Maybe later you could talk to someone from the Mikisew Cree First Nation who can tell you what it's like living downstream from the oil sands. Six out of 10 households have been affected by cancer in in Fort Chipewyan.
Anywhere else, imagine this, the city of Edmonton, a million people, 600,000 people are sick.
Or of their 600 households, they would be alarms raised. But But it's because of our color of our skin that they would choose wealth over our health. But this story is mainly about conventional oil, you know, the land man, Beverly Hillbillies, I drink your milkshake kind. I drink your milkshake.
But also gas, they cook your food, heat your home, and juice your AI data center kind. Any oil or gas well that has no owner is called an orphan, and there's currently thousands of them. But that's actually just the tip of the oil berg.
The real question is this.
How are we going to clean every single one of these oil and gas well sites when they're no longer needed? Because if we don't close them properly, they have a tendency to poison their surroundings and maybe go kablooey. So before we dive into the juicy regulatory drama of infrastructure liability, let's go over the beautiful life cycle of oil and gas wells.
Alberta's economy is highly dependent on oil and gas. [music] That's why the province makes it super easy for these fossil fuel companies to make the [music] ching ching.
If you're a landowner, you basically do not have the right to refuse drilling on your land. You can try, but companies have all sorts of legal recourse to force their way through. So much for private property. But the government doesn't permit stealing your land.
You're meant to enter into an agreement with the company [music] that wants to drill. You're compensated for your loss.
You're not rolling in it, but you're made whole, at least in theory.
>> [music] >> An active well is what it sounds like.
It's actively producing oil or gas. It has a license owner. That owner is legally responsible for it. Money is flowing, everyone's getting paid, [music] company, landowner, government.
But as we'll see, that doesn't always happen.
An inactive well has stopped producing, typically for a year.
>> [music] >> Maybe it's no longer economically viable. Maybe the well ran dry. Maybe it's just going through a bad breakup.
The point is, it hasn't been properly sealed. It's just sitting there on someone else's land possibly forever because in Alberta there is no legal deadline for when an inactive well has to be cleaned up and because cleaning costs money no company is jumping at the opportunity to spend tens of thousands of dollars. An abandoned well despite the name is [music] actually decommissioned. It's permanently been taken out of service and properly plugged most of the time.
After that the site needs to be remediated by cleaning up any contamination and then the land is reclaimed to equivalent land capability from what it was before rather than just an industrial crime scene. After all that you get a reclamation certificate.
Congratulations, your well just graduated from no longer a giant hazard university. It's actually pretty responsible when the whole thing happens as it should. Unfortunately, this happens way less often than it should.
The Alberta government recently looked at 73 wells that have already received reclamation certificates and it turns out every single well site failed. None of them were properly cleaned and none should have received a certificate which means taxpayers might end up on the hook [music] to clean well sites that have at least on paper already been cleaned. But it's a hard knock life for orphan wells because they have no owner to take care of them. The company has gone bankrupt or dissolved. So it gets pawned off to something [music] called the Orphan Well Association which is an industry funded non-profit to look after all of those oily Oliver Twists and gassy Annies [music] and just like people orphanages, the Orphan Well Association is super underfunded. More on that later.
Multiply that life cycle by the number of wells plus pipelines plus all of the facilities that make up Alberta's carbon archipelago and you'll quickly realize this is going to take a [ __ ] ton of work. [music] It's a massive cost someone will end up paying.
This is called total closure liability, and either industry pays for it or the public pays [music] for it. In other words, you.
So, how big is this problem? In Alberta, we've drilled over 470,000 wells over the last 100 years. There's one for every 10 people in the province. Plus, we also have like 450,000 km of pipeline, um and I think just under 200,000 of that is is non-operational.
So, a huge chunk of pipeline that's not actually operating, and another 40,000 facilities, tank batteries, these sorts of things that are dotting the landscape. So, yeah, the infrastructure's everywhere. It's in urban areas, it's in, you know, farmers' fields, it's on reserves, it's on public lands, it sort of covers the province.
That's My name is Philip Meintzer. I am a campaign organizer with a group called the Coalition for Responsible Energy here in Alberta. Uh Coalition for Responsible Energy, um also known as CARE, C4RE.
Um we're a non-partisan group of like diverse stakeholders. We have, you know, just ordinary Albertans, we have environmental NGOs, we have rural landowners, service rights advocates, um indigenous organizations, and we all essentially are working together on the oil and gas cleanup issue. All of that eventually needs to be cleaned up, and by law, industry is supposed to pay for it. This is called the polluter pays principle.
Polluter pays principle is pretty simple. Uh it's like we teach our kids, like you make a mess, you clean it up.
But in this case, you also pay for that cleanup. It's law, it's law in Alberta, it's law in Canada, and it just means that if you're a company and you drill a well, you also pay to clean that up. So, if the polluter pays principle is enshrined in law, you might be surprised to find out that, thanks to some truly jaw-dropping incompetence from the provincial government, there is no real plan for industry to pay for all of this cleanup.
Less than 70,000 of these wells are operational and producing today. So, those are wells we call active. Nearly Nearly 300,000 of them are are at the end of their lives. They They're either not producing very much or they've already been inactive for decades and like need to be cleaned up because all of this infrastructure will break down and leak eventually the longer we leave it. Turns out the ravages of time that rob you of your youth are also at work on Alberta's oil and gas wells. Sites can end up contaminated with salts, heavy metals, or volatile organic compounds [music] like benzene, which causes cancer.
A third of gas in Alberta is sour gas [music] containing hydrogen sulfide, which smells like rotten eggs. And to save you from Googling it, yes, it's the same chemical that makes your farts smell, except it's in much higher concentrations. It's toxic, flammable, [music] and heavier than air, so it tends to pool in low-lying areas, making it a hazard that's silent but deadly.
Oil and gas, both the wells and the other equipment, concentrators, different junk that's connected to the well to move the oil uh through pipelines, all needs to be eventually cleaned up, [music] removed from the land, and then the spill of both saline water, actual oil if it went in the ground, whatever drilling solution they were using, and small amounts of radioactivity, uh naturally occurring radioactive materials, need to be cleaned up from the land so that it can be returned to the use it was put before, either [music] habitat for animals or very often farmland. That's Uh my name is Drew Yushchak. I'm a lawyer. I was a lawyer with the Public Interest Law Clinic at the University of Calgary for many years. The clinic was involved in the Redwater case that went to the Supreme [music] Court, which is how I got engaged initially on the oil and gas liabilities question. Uh Sean Fluker and Martin Olszynski at the University of Calgary and I started doing a lot of research on it. I'm currently doing my PhD at the uh University of British Columbia. Inactive wells also leak methane, which is 80 times more potent at trapping heat in the atmosphere than good old CO2 over a 20-year period. And I know it's tough to think about climate change what with all the everything that's going on, but it turns out methane leakage is actually a bigger problem than we thought. Last year, a McGill University study found that [music] Canada's inactive wells were stink lining out almost seven times more methane [music] than the government's previous estimate. I could give you the tonnage, but that would be completely meaningless to you. So, suffice it to say it would be like adding 4 million cars to the road, almost double the number of cars in Alberta. Or to translate that for some of the people in Toronto watching this, one line up to get onto the Gardiner Expressway after the Leafs lose.
But that's not the worst-case scenario.
They can catch fire and then explode.
The ultimate danger is that they would start blowing up. That has happened a couple times in Ontario. I don't remember it happening at yet at all in Alberta.
Yet. Hasn't happened yet.
But in 2021, an old abandoned gas well in Wheatley, Ontario, exploded. Seven people were sent to hospital. And it may happen again. Ontario has lost track of roughly 3,000 old wells. Why, if you're in Ontario, you could wake up exploded tomorrow.
Back in Alberta, at the current rate of cleanup spending, one estimate says it would take 177 years to clear the backlog of Alberta's roughly 300,000 leaky, potentially exploding ghosts haunting the landscape.
177 years, longer than Canada has been a country, but just long enough for the release of Grand Theft Auto 6.
Now you might be wondering, how much is all of this going to cost? Great question. Depends on who you ask. Back in 2022, the AER, that's the Alberta Energy Regulator, said it would cost $11.3 billion to clean up inactive wells.
Unfortunately, the AER has only collected $295 million in security from industry to clean up those wells, which means they've only collected 2.6 cents on the dollar. But for some reason, that number doesn't include pipelines or other infrastructure, nor does it include active wells. If you include those, the AER's highest estimate was $60 billion, meaning they haven't even collected half a penny for every dollar.
But those numbers are almost certainly vast underestimates. In 2018, back when Rachel Notley was premier, the AER's own vice president of closure and liability, Rob Wadsworth, gave a PowerPoint presentation to the Petroleum Historical Society, who I assume are like Civil War recreationists, but they dress up as ancient decaying plankton battling Earth's hot crust. Wadsworth estimated the total liability of the oil and gas wells at a hundred billion dollars, almost 10 times what the public was told. Another $30 would be needed for pipelines plus an additional $130 for the oil sands, bringing the total cleanup cost to a face-melting $260.
And how much have they collected from industry? Less than one penny on the dollar, most of which was for the oil sands. And he demonstrated this using possibly the best use of clip art ever.
So, Wadsworth ultimately comes up with this graph that he shows to both the Alberta government and to industry saying, "We really goofed it. Like, it's it's way higher than we thought it was going to be. So, we have and I think his his hilarious slide had uh the amount of liability, this giant bag of cartoon bag of money, and then he says, "The the amount of security we've collected it is on the graph, but it's so small you can't see it." Not understanding that this would cause a storm in the media, the AER later apologized for sharing it saying it was a worst case scenario and then promptly went back to sharing smaller numbers. They didn't deny it, just oopsies, you weren't supposed to see that.
As this becomes public because a journalist Mike De Souza manages to get a hold of it through access to information, um makes it public. Head of the Alberta Energy Regulator at the time, Jim Ellis, says that wasn't vetted consumption.
Don't take that seriously. Look at the um the the deemed liabilities. That's the real one.
It's not. It just isn't. The deemed liabilities was the one they knew there wasn't any good. That's why they had an internal program to find out how much it really was.
From what I can tell, the regulator, even internally, just shut down the program of trying to come up with a real estimate.
Because there's a risk if they produce it internally that someone will get it again through freedom of information.
So, they're sticking their head in the sand to not figure it out so that no one else can. So, like me in high school, the Alberta Energy Regulator stopped doing the math because it was too emotionally difficult. But, if you look at the notes from Wadsworth slides, they say $260 billion is likely, once again, an underestimate.
But, let's just assume that number was accurate back in 2018. Adjusted for inflation today, that total liability becomes $320 billion.
The cost of an average home in Vancouver. To put that into perspective, the oil and gas industry has generated $553 billion in resource revenue for Alberta since 1970.
The cleanup costs could wipe out almost 60% of everything the province has ever made from oil and gas.
And it's not like this issue snuck up on us. The AER has presentations that go back over 30 years talking about this issue. I mean, how you could gaze upon these A+ graphics and not immediately take action is beyond me.
All we can say for sure is that the total cleanup cost is much higher than we're currently being told. So, what does that tell you about the Alberta Energy Regulator?
It just means that like it feels like the problem the problem is not being properly monitored. Like leadership in some capacity at either the political level, like within government, or at our energy regulator, um should have a handle on this. Because if they actually wanted to address it, they should probably know the size of the problem, which kind of tells me that they just don't care about addressing it. Well, it's not clear if Alberta's oil and gas industry is going to be able to foot the bill for all of these inactive wells, at least they're paying people for the active ones, right?
Right?
This is Mark Dorin.
>> [music] >> He's a co-owner of this piece of land in southwest Edmonton, not too far from the West Edmonton [music] Mall, which, as you may know, is the former home of our navy's submarine fleet.
The location makes this plot of land quite valuable, appraised at around $185,000 [music] an acre in a city that has grown over 20% in the last 5 years. And the only reason you're not watching us standing around on stunning suburban cul-de-sacs, these oil wells.
Oil wells licensed to a company called Maga Energy. So, there's two inlet pipelines that are here owned by this company called Maga.
Just what a great name. Yeah, stands for Make Alberta Great Again. Oh, does it?
>> Yes. On top of preventing much-needed housing from being built, Maga Energy isn't paying Mark or his associates.
Neither is Tidewater Midstream, the other company operating here.
For years, they've been coming onto his land, taking the oil, and selling it without paying for it.
So, after 3 years of getting stiffed, Mark and his partners took matters into their own hands and built a blockade.
This is their lease contract.
It is no more.
We're tearing it up. It's done. They don't have the right to be on this land.
So, at this point, Maga and Tidewater are only legally allowed to access the property to permanently close and clean up. That was back in March. But, when we showed up, you could see the truck tracks where they just drove around the blockade to continue business as usual.
We erected this blockade to make a point.
And so, we wanted to prevent them from from entering for operational purposes.
A landowner cannot stop an oil company from coming on to plug their well, to decommission that facility, to remove this road, to reclaim the land, etc. They have a right of entry by law for all shutdown and cleanup purposes, but they do not have a right of entry by law for operating purposes. So, in other words, they can't come on to operate.
Now, remember, the whole system is supposed to compensate landowners for the loss of their land. How much money are we talking about here? They owe you >> the annual compensation here for the two well sites, presumably, and the tank battery, presumably, is $12,000 per year, but none of that's clear. So, and then there's there's really complicated reasons behind that, but the amount they were paying was 12,000 a year. We're not exactly sure which of these different sites it does or does not cover. So, 3 years, that's roughly $36,000, but again, you say presumably for all these really complicated reasons.
>> Exactly. The lease agreement's not clear, and you know, under under common law, the lease needs to be clear, otherwise, it's not valid. So, does that make this whole operation illegal? Yes, it does and there's many other reasons for illegality here as well. Turns out Mega Energy wasn't just behind on Mark's lease. They were also behind on municipal taxes by over $200,000.
>> [music] >> Despite the AER's own rules saying companies owing more than $20,000 in taxes should [music] not get more wells, the Alberta Energy Regulator authorized Mega Energy to take on an additional 170 well licenses in 2024 anyways, presumably because Mega Energy said So far, Mega Energy hasn't said anything publicly about the issue. But Mega Energy is not an anomaly. Across [music] Alberta, oil and gas companies owe more than $245 million in unpaid municipal taxes. While rural landowners are owed tens of millions more in unpaid lease payments. [music] And for some reason, this is all just treated as normal. Rural municipalities across the province aren't like rich. They're not They So if essentially they don't get money from these companies, it forces those counties to cut services. So cut it cut services or to stop like maintaining infrastructure or they have to raise raise property taxes on everyone else.
So it gets the cost get downloaded onto ordinary Albertans. And when companies can't or won't pay, the government solution is to compensate landowners and municipalities from the public purse through the Land and Property Rights Tribunal.
They're bailing out companies that can't pay their bills by giving victims their own tax money.
How very free market of them. Mark's list of infractions against Mega Energy and Tidewater is so long and detailed. We spent two hours together and practically the whole time he was explaining how something or other wasn't up to code, was in the wrong place, or just completely illegal, or even dangerous.
There was problems. There was problems with sour gas. And so, they said, "Well, look, we will install these See these yellow buildings over the well heads you see here and the doors open?" Yeah. See these yellow little enclosures?
>> Yeah.
Well, they put those enclosures there and they put a hydrogen sulfide sensor in.
>> [music] >> Well, you can see that they leave the doors open. If you go over there, you can see that the whole enclosure at the 15-33 well, we'll go look. Yeah. It's not even installed. It's They've taken it off. The The wind has a hard time detecting H2S [music] in the wind. A bit like preventing a house fire by removing the smoke alarm.
And look, I know I made a fart joke about this stuff earlier, but seriously, hydrogen sulfide can literally stop you from breathing, render you unconscious, damage your lungs and eyeballs. There is a reason these signs are posted everywhere.
Beyond that, there's lots of evidence that long-term hydrocarbon exposure can lead to things like dementia and Parkinson's. Remember that orphan well at the start of the video? Sadly, oil daddy doesn't actually love you.
Good girl. Oh my god, I can Yep. Oh my god, we got to get away from this thing as fast as we can. I was exposed. My crew, who at least got to be a little bit further away, probably got some, too. And I don't feel good about that. I brought a someone here that was interested in purchasing the land in fall of 2015.
[music] And drove in the the road happened to be the gate happened to be open. So, we drove in and I go, "There's a truck here on the road to the cell [music] phone tower." So, there's a guy up on top of there.
Okay.
>> rope down here.
And but, when we came through the the river, we could smell hydrogen sulfide.
Like, this the wind was blowing same direction it is now.
You could smell hydrogen sulfide.
[music] The incinerate they were flaring, but the flare was off. All the gas was spewing out of there and where was the guy? On top of that tower.
He could have >> From Ontario. I said, "Do you know what sour gas is?" "Never heard of it." I said, "Get your guy the hell down from the tower now." I said, "Just walk 20 ft that way." He said, "What's that stink?"
I said, "That's poisonous gas, buddy. Get your man down from there." But Mark isn't just some landowner. He's an oil and gas guy. You used to work in the oil and gas industry? Yeah, exactly. In fact Like what was your experience there? What were like how what what was what were you doing? I I operated oil fields as a supervisor here in Canada and overseas.
But I also got involved in a specialty which is called electric submersible pumps. These are high volume pumps that don't have a pump jack like this. That's an example. That's one right there. That was my business.
>> That was your business as these ones right here.
>> system that's on that well operating as we speak was designed by my company. We sold it to this It's called Baker Hughes whose name is on the front of that. Mark speaks like a ruptured wellhead. Names, dates, endless court cases, complaints to the regulator, all of it gushes out of him with a pressure built up from years of frustration. Mark has developed something of a reputation for being a huge pain in the ass for the Alberta Energy Regulator. So much so, he tells me they have a full-time staffer who's been assigned to handle him. But if you ask Mark, all he wants is for the industry to play by the rules.
>> system. You're telling me that we have all of the laws we need or most of the laws we need?
>> Absolutely. We have great laws.
I mean, they might They're not perfect.
We could use a tweak here and tweak there, but everything I've talked about today, there's a remedy at law for it.
And when I ask for those remedies, my applications go in the garbage.
It's It's a little like having cops that just won't even bother to come around.
>> it's exactly like having cops that won't come around.
So why would the province continue to turn a blind eye?
I mean, some would say money, but turns out Alberta doesn't actually make that much money off of oil and gas or at least not as much as they could. So, all of that wealth that the uh Alberta government has reaped in over the last what, 50 years?
A huge percentage of that >> there wasn't much wealth because they let these companies off with minimal royalties. We have the lowest royalties in the world.
We don't need to give the stuff away.
We have the lowest royalties in the world?
>> By far.
Albertans should have a huge gigantic multi-trillion dollar war chest, but we don't have We don't have anything. Oh, you can swear here. Don't worry about that.
So, here's a Here's an important fact.
Under Premier Lougheed in the '70s, we produced 1 million barrels a day. And the royalty income was higher then than it is now when we're approaching over 4 million barrels a day. Probably approaching 5 million. I'm not sure actually sure, but it's over 4 million.
A goose friends.
That is a good omen to me. They were all here this morning. Look, admittedly, I'm an outsider. I'm so severely Toronto. I mean, just look at me. I'm standing out in the middle of a field with some rusty pumpjacks in the background, my stupid mullet and mustache waving in the wind.
It's hard not to feel like a little self-conscious being driven around by an oil and gas guy in a Ford F-150. But, the question I have is how does a guy like Mark go from working in oil and gas for decades, then end up spending years pushing back against it? My parents had a single well site on their land with a tank like one tank like those over there. But, it was sweet gas.
>> kind of grew up with this around? No, it was after I moved away. Oh, okay. It was after just right after I moved away and grew up and moved away that they drilled that well. The year 2 years after I graduated. Okay.
So, they put something called a plunger lift in that well, which shouldn't have been in that type of a well. And they So, instead of pumping it up into the tank, they would open a valve and let the gas and oil all blow to the tank. This would create these huge plumes of gas.
So, my mom's garden was 600 ft away.
Oh. And so, if the wind was blowing the the plume of gas would go across her house her garden and her garden and her house. So, she used to get more or less close to a fix asphyxiated in the garden. Like, she used to not be able to breathe cuz the plume is so big there was no oxygen.
Jesus.
And this happened repeatedly. So, they finally figured out what it was.
And uh the the regulator at the time had a different name. It's the same regulator. They came out and permanently shut the the site down.
Is it >> Until they could conserve gas, which means not flared or not vented.
They started up a few weeks later. They didn't tell my parents that it was permanently shut down. I found that out many years later by by getting them records from the regulator. So, the regulator told them to shut down. Then they just said I guess they and they just ignored it and said >> They followed the order for two or three weeks, and then they started back up, and the regulator never noticed it. So, they And if the regulator would told my parents, they could have reported them.
So, they lied. They lied.
Do you mind can I ask how your mom is doing now?
Remarkably well for a 93-year-old woman with Parkinson's. Do you think the Parkinson's is related?
>> Oh, there's no question it's related.
The neuro science, you know, the the neuro um neurologists have more or less said that. They said it's not hereditary, and it's from some outside factor. So, She was poisoned.
Hydrocarbon poisoning. It's happening to countless In Red Deer, they have a Parkinson's clinic. It's absolutely overloaded. It's the highest venting gas area in the world. You don't think that's a coincidence? I certainly don't think it's a coincidence.
I mean, we're venting. That's why I wear this hat.
Yeah.
Emissions count.
For my mom.
To try to save lives.
And Parkinson's is not fun. No.
No, my my grandmother had it, yeah. Uh it's not fun at all.
And, you know, the Land and Property Rights Tribunal, they determined the rate of annual compensation, which is what her life is worth.
Zero.
Jesus. I think my mom's life is worth more than zero.
So do I.
Pretty [ __ ] sad, hey? It is really [ __ ] sad. Although there is some good news here.
While I was editing this, the Alberta Energy Regulator shut down Maga Energy, thanks in part to Mark's complaints and documentation. Maga's violations include unpaid taxes, unpaid fees, improper care and closure of wells, and failure to clean up spills. So I caught up with Mark to see what he had to say.
Tell me about when you heard the news about Maga Energy. I guess I heard it by Twitter that there had been a Alberta Energy Regulator, what's called [music] a suspension order, issued against Maga requiring it to shut down its I think 581 wells, 108 facilities, [music] and 801 pipeline segments, if I remember correctly, all across Alberta >> [music] >> within 2 weeks time. Uh not only did they have to shut down, they have to um what's called [music] to discontinue the pipelines, which means disconnect them from the system at both ends and purge them to air or water. I don't think that can [music] be done in 2 weeks time. So, how are you How do you see the AER in all of this? Cuz they've finally taken action.
It's extremely clear that there was all manner of violations [music] occurring for a very long time, and that the AER had issued previous orders on them, which were ignored.
So, what it tells me is that you got to be a bad boy or girl for a really really long time [music] for the AER to shut you down. It's good to see that the regulator will actually take some action. It means [music] they're not a lost cause, but there's one hell of a lot of room for improvement there. You know, my own personal opinion is we need a regulator of this industry especially as uh >> [music] >> 475,000 wells reach the end of their life and a good portion of those sites will be extremely [music] contaminated etc. We need a good regulator to force this industry to do what's required to do by law and and you [music] know, protect public safety, protect land values on and on and on. So um I've been an advocate for regulator reform for a long time >> [music] >> and I firmly believe we have to we have to achieve that reform or Alberta has no future financially [music] or environmentally.
Okay, so we've established there's an enormous unfunded liability that cleanup is over a century behind schedule and a number of companies are dodging their obligations to landowners and municipalities while continuing to operate. Now you might be wondering how in the name of Connor McDavid's well-documented fear of ketchup was any of this allowed?
Hey, just a quick message before we break down exactly how Alberta super beefed it with all of these terrible regulations. You should know that people are working on this and it's a solvable problem and people like Philip are are are part of the the solution and you can be too. So all you have to do is go to cleanupyourmess.ca where they make it super easy for you to send a letter to your MLA to ensure that the polluter pays principle stays on the books and you and I are not on the hook for all this. And um yeah, while I have your attention, you know, if you want to like, subscribe, comment, hype, all that stuff, uh it super helps this video and the channel. Plus if you want to support the goose on Patreon or just buy me a coffee, there's links in the description for all of this. And um that's all I wanted to say. So, back to the video and how we got into this mess.
Back in the day, if you wanted to drill a new well, you had to post a security deposit for its eventual cleanup. But then, the industry asked a visionary question that would change the course of history in Alberta forever.
Hey, what if we didn't do that? The oil and gas industry lobbied quite heavily back in the '90s and early 2000s to not have to put up upfront security, and they wanted to be able to sort of buy and sell this infrastructure, treat it like commodities. Uh, you know, if they if they're not profitable, dump them on maybe smaller companies.
Um, that was all allowed. This meant that bigger companies could invest more in drilling. And whenever they wanted to, they could sell their wells to smaller companies. And then those companies could sell to even smaller companies, and eventually you reach bottom feeders who take what they can get and end up going bust, >> [music] >> leaving wells with no owner.
Orphans.
>> [snorts] >> But in return for that, um, >> [music] >> industry committed to what was what's called like the orphan fund and the orphan levy, which exists as this taxpayer backstop. So, the orphan levy is this tool that essentially all of industry agreed that they would all pay into to share the cleanup costs when a company fails to pay.
So, that was the deal. The industry said, "Let us operate without posting security deposits. In return, we'll all collectively pay into an orphan fund to cover the cost of cleanup when these loser companies go belly up." There's just one small problem.
The orphan fund is never properly funded to match the actual cleanup costs needed, but it does exist. Like, we have this tool, we have this instrument that can protect the taxpayer. Um, but it's yeah, the our government and our regulator improperly funded again to put to essentially minimize the cost to the Last year, the orphan well levy, that is the amount industry paid into the fund was 144.5 million dollars. While the Orphan Well Association's estimated cleanup costs was 862 million dollars. That's a shortfall of roughly 715 million dollars. The problem keeps outpacing the funding.
Please, sir.
I want some more.
What?
We don't have timelines for cleaning up.
We don't have like, you know, solid timelines [music] for like if a well stops producing it has to be cleaned up by X date.
Uh and we don't fund the the one tool, the orphan fund that exists actually protect taxpayers.
So, no timelines, no upfront security for active wells, and an orphan fund that never seems to get the money it needs. Great starting point.
So, how did the AER let this happen?
Well, buckle up because we're about to dive into a regulatory nightmare that led to these companies paying like half a penny on every dollar of cleanup costs they create. And there are several layers to this. Like a five-layer bean dip of delicious systemic incompetence.
Layer one, underestimate the cost per well. [music] The AER uses a formula to create an average cost of cleanup, but averages tend to hide important details like how the average wealth of a room containing me and Elon Musk is 400 billion dollars. They included in their estimates of the averages sites that had never produced. So, in estimating the cost of reclaiming soil, they included soil that had never come into contact with any kind of hydrocarbons. It was an empty hole that was drilled, it hit nothing, and then they just closed it.
Well, yeah, that's cheap, which meant their estimate for reclamation cost was >> [music] >> wildly low. Layer two, overestimating company health while underestimating company liability. For about 20 years, the system used something called the licensee liability rating system or LLR to decide whether companies needed to post security. It was a simple ratio, assets [music] divided by liability. If you were above the ratio of one, meaning you had more assets than liabilities, you were fine. Below one, and you had to pay up. And the companies [music] who had repeated access to what their ratio was would sell each other or spin off new companies to make sure that they didn't pass that one >> [music] >> that one ratio that meant they had to post security. And because they were all carefully balancing [music] their sheets to avoid it, almost no one posted significant security, and [music] it turned out the system was incredibly easy to game. And who designed this system? The licensee liability rating program was the name of the program designed in close consultation with industry, and particularly uh the CNRL engineer who was responsible for basically designing it.
CNRL or Canadian Natural Resources Limited owns the most wells in Alberta.
[music] They're also a big player in the oil sands, and one of their employees ostensibly designed the regulatory system that was supposed to hold their company accountable.
Let's just sit with that for like a second.
The AER's own internal review in 2019 found that this formula was simultaneously overvaluing assets by a factor of 1.59 and undervaluing liabilities by roughly half.
Both wrong in the same direction of benefiting industry.
What a coincidence.
These sound like small numbers, but it made an enormous difference. If the numbers were accurate from the get-go, the money the industry owed to the regulator would have jumped from 475 million to [music] 17 billion, a 36-fold increase. Layer three, pipelines don't count.
We said this earlier, but it's worth repeating. The AER's officially published liability figures excluded all pipeline liabilities.
Billions in cleanup costs just not counted. Like, did they think pipelines were biodegradable? Honestly, this seems like the regulatory equivalent of only brushing your front teeth when you were a kid because those are the ones that you could see. Layer four, collecting money too late. Remember, security deposits were only required when a company's asset ratio fell below one, meaning liabilities already exceeded assets. The ratio was a trigger designed to fire precisely at the moment a company was in trouble. So, surprise, surprise, >> [music] >> many couldn't pay. So, those companies were extremely bankrupt. So, when the regulator said, "Uh you owe us, you know, $50,000, $500,000, you owe us half a million dollars or something."
The company would say [music] like, "Great.
Uh I don't have it. You know, I don't have any money. I don't know what you're talking about. You're not getting anything." And this happened over and over.
And the regulator would just kind of be like, "Darn it. Not again."
Um and the the reason [laughter] uh it's it's unbelievably stupid to understand how many things were wrong with the system.
Layer five, creating opacity. The AER actively hid information that would have told the public the system [music] was broken because releasing it would have made life more difficult for oil and gas companies. They chose industry over the public at practically every turn. Cuz when they designed it, they said, "We're going to have these monthly reports that include lots of clarity on where things are going." And then they realized that it showed that something wasn't very good and that it caused problems for industries because or for the oil and gas industry because as a company's ratio of liabilities and assets got worse, banks would stop lending them money because this company was going to go bankrupt. And the companies went to the regulator and said, "Please don't make that number public anymore so we can get money from the banks." And the regulator said, "Well, we want a healthy oil and gas industry and we need to help these failing companies or they're all going to fail." So, they started withholding that number. And then they started withholding more numbers. If they just slowly withheld all the information that would have explained to the public that the thing was busted rather than fix it.
And that that just blows my mind to watch that happen now uh over 20 [music] years. There you have it.
Systematically underestimating the cost of well cleanup, over-optimistically rating company health, creating a useless trigger for companies to post security that fired way too late and was super easy to game, completely ignoring pipelines, and just an overall culture of hiding inconvenient truths from the public. God damn, maybe Al Gore was right all along.
All of this meant a slow accumulation of cleanup costs that the industry was legally obliged to pay for, but wasn't.
But now it's gotten so out of hand, wouldn't it just be better if you taxpayers footed the bill instead?
>> [music] >> The government of Alberta is pitching a solution to all of this called the mature asset strategy, which sounds less like a cleanup plan and more like a dating service for business dilfs.
Also called the MAS or the NAS, the mature asset strategy was leaked to the Globe and Mail in March 2025. And the initial reaction was not great. Then the official version was released a few weeks later and it was nearly identical and still included fun typos like this just hanging out in the middle of a sentence. I mean, at least it wasn't ChatGPT because to err is human. The mature asset strategy is odd because it's sort of pitched as a thing that's going to fix the problem of all of the inactive oil and gas facilities and pipelines and wells in Alberta. But a lot of it is actually aimed at trying to squeeze more oil and gas out of the old wells uh by somehow getting them reactivated to get the last drops out >> [music] >> and finding a way to have more market for natural gas in Alberta to help the mature asset owners. It recommends creating special purpose entities called harvest codes and closure codes, which look a hell of a lot like Crown corporations that buy junk wells from companies.
>> [music] >> So, if these new entities use public money, that would be a violation of the polluter pays principle, which is again literally the law. But if the corporations already have the responsibility to uh abandon and reclaim, sometimes collectively called close, their assets, then what's the difference? And if there's a shortfall between what they pay the closure corporation and what it actually costs, is that going to fall on the public somehow?
Uh it and there's just not really an explanation on how that part of the strategy is going to work.
>> But beyond possibly betraying foundational legal principles, the boss is full of other bangers, like something called risk-based closure, which prioritizes the cheapest, easiest while leaving the harder, dirtier ones. Which is just ass-backwards. I mean, imagine your doctor saying to you, "Look, I know you're bleeding out from this gunshot wound, but this man over here says his tum-tum is achy." But then the MAS comes up with this genius idea to get cleanups done faster.
Lower environmental standards. The other part of the strategy is just that the oil and gas industry asks to reduce the strictness of environmental regulations because it would be easier for them to close sites if they didn't have to clean them very well. Like, how popular could this idea be? Like, "Hey, vote for me for more toxic chemicals on your land.
And if you like that, I'll lower that voting age to include your child with x-ray vision and your butt tentacle dog."
And of course, the single most important thing a cleanup strategy needs to do is compile a credible, honest, total liability figure to get a baseline for this massive problem. Unfortunately, the refuses to do that because calculating a total number would be inappropriate.
Yeah, nothing says honest accounting like saying math is uncalled for. All of this brings up a crucial question. Who is the mature asset strategy really for?
And the answer is very obviously not you because normally when the government creates an industry-spanning strategy to address a big problem, they do broad public consultations with various stakeholders to try to come up with a solution that works for everyone involved. Consultations are public policy 101 because you're not going to know what people's needs are unless you ask them. Like this mature asset strategy process had 98 participating groups and 70 of them were from the oil and gas industry. There were only 10 participants from municipal or rural interests. There was no public consultation, like no actual interaction with the public, no you know, academic scientists. There was no consultation with indigenous communities.
Uh, it was largely industry-driven. That said, the rural municipalities of Alberta were invited, which is good news considering they represent the communities literally sitting on top of these toxic, potentially explody wells and are owed hundreds of millions in unpaid taxes from deadbeat companies.
The bad news, rural municipalities were largely ignored. It was so bad they released a whole 20-page response that could best be summarized as Yo, this shit's whack. And even the folks who were there, like we know people from sort of landowner landowner reps and even municipal municipal reps who were at the process felt like the the whole process was directed towards predetermined outcomes. But like it was cooked from the start. So to recap, the MAS consulted almost exclusively industry while ignoring anyone else in the room. It's full of ideas ranging from stupid to insane and it hints at getting taxpayers to pay for cleanup costs industry is legally required to pay.
So you might be wondering who wrote this garbage plan?
Well, the answer is one guy.
Introducing David Yager.
>> [music] >> David Yager is a man of many hats. He sits on the board of the Alberta Energy Regulator appointed by a Premier Danielle Smith in April 2024. He's also a special advisor to Premier Smith.
[music] His own business card listed both roles at the same time. He's also an oil and gas industry consultant [music] with his company Yager Management Limited advertising services on his personal website. David Yager is also the architect of the Mature Asset Strategy, >> [music] >> one of roughly $400,000 in sole source contracts he scored with the government of Alberta, which again >> [cheering] >> he advises.
He's also a politics guy. [music] He was the president of the Wildrose Party, an advisor to Energy Minister Brian Jean and a key player in the merger that created the UCP. My my CliffsNotes on Yager would be that he's been a very long time political proponent of uh the oil and gas industry, especially the gas industry in Alberta. He has always favored lighter regulation, which is funny given the rest of the story that I told you about how accidentally severely underregulated the industry was. And he also does not seem to believe in human-caused climate change, which for anyone involved in oil and gas regulation at this point is a big problem cuz it it means he doesn't really believe that there's going to be any decline in future demand. Now, I tried to confirm whether or not he's a capital D denier of the scientific reality of human-caused climate [music] change, and there are several examples online where he specifically says he's not a climate denier. Because whenever you have to repeatedly deny you're a climate denier, >> [music] >> you are for sure on solid scientific ground. That said, he did write a book called From Miracle to Menace, Alberta, A Carbon Story, which I assume is like some sort of crude oil 50 Shades of Grey, but I'll let you read it for yourself and come to your own conclusions.
However, there are two things that we know for sure. One, From Miracle to Menace, Alberta, A Carbon Story is a dope title for a Crave original series, and I predict it will be the next hit of Crave and two, David Yager thinks industry shouldn't always have to pay to clean up its mess. David Yager, you know, publicly, this is before he was a board member with the Alberta Energy Regulator and before the mature asset strategy process, he publicly argued that Albertans need to let the government move past the polluter pays principle. So, I just think it's important for people to know that, you know, this is the guy who's writing the cleanup rules, and we shouldn't trust cleanup schemes being pushed by someone who thinks that our government that represents our interests should let the industry abandon its obligations to everyone in the province. So, why does David Yager think the polluter pays principle should be cast aside like so many orphan wells? Well, he says oil and gas producers and the province are partners in Alberta's hydrocarbon prosperity, not opponents. Okay, maybe, but what kind of partner? A self-aggrandizing narcissist leeching off the wealth of a codependent enabler?
But, yeah, sure. Alberta keeps electing governments that want to expand the fossil fuel industry. And folks like David Yager kind of prove his point that the line between industry and government is increasingly blurry. But call me crazy, that's bad, actually. The government's job is to look out for the public interest, while industry wants to maximize profits and minimize costs.
So, what if taxpayers foot the cleanup bill?
Okay, let's assume the $320 billion total cleanup estimate from before is roughly accurate. That means every individual Alberta taxpayer could be on the hook for $150,000 each.
Ask yourself, are you okay with that?
And technically, every Canadian has already started to carry this burden during the pandemic when oil prices briefly went negative, the federal government gave Alberta a billion dollars to clean up inactive wells.
But right now, the oil and gas industry is making money hand over fist thanks to yet another price shock from yet another oil war in the Middle East. So, maybe just maybe the industry can finally afford to hold up their end of the bargain.
Putting the burden on taxpayers feels a lot like Trump attacking Iran and then asking allies to open up the Strait of Hormuz for him. Like, bro, this is your mess. You clean it up.
It's giving real MAGA energy.
So, should we believe David Yager and adopt the mature asset strategy? He He comes from inside industry and he takes industry's perspective on, I think, almost everything. And so, if he was one voice on the regulator and then there was a voice for the rural municipalities and indigenous peoples and the environmental movement and something, Yager might be okay. He could speak for industry.
The problem with having him run the show is now it the show's just run for industry.
It's not really a solution. It's really just a an industry wish list. It's they let the oil and gas industry and they let representatives from the oil and gas industry sort of like shepherd the process along and and it sort of really meets the needs of companies rather than actually like addressing clean up or protecting taxpayers. So, how do we actually solve this problem?
Getting the oil and gas industry to pay for the cost they collectively impose is wildly popular in Alberta.
According to polls, 92% of those polled supported oil and gas companies being responsible for the final clean up of wells. 87% of Albertans that were polled supported the government requiring industry like as a whole to cover unpaid property taxes to municipalities. 84% of Albertans supported the government requiring industry as a whole to cover those unpaid rents to landowners.
[music] Vast majority support for the polluter pays principle and for the industry as a whole to cover these costs if and when like a company goes bust and fails to pay. A supermajority of Albertans, understandably, do not want to be on the hook for industry's unpaid bills. This isn't about boo oil and gas. This is about accountability, fairness, and making a better economy.
And it turns out Alberta already collects [music] upfront security for clean up for one part of the energy sector, renewables. Shocking, I know.
After a moratorium on building wind and solar, Alberta decided to require 30% upfront. This is happening while Alberta holds less than 1% of what's needed for the eventual clean up of the oil and gas sector. So, maybe step one in solving this should be to treat oil and gas the same as wind and solar. Collect 30% upfront for any new oil or gas well.
Next, industry needs legally binding timelines for cleanup. Even the drill baby drill USA is more responsible on this one with some deadlines as short as 6 months in contrast to Alberta's two infinity and beyond.
After that, the Orphan Well Association needs to be properly funded. At a minimum, it should always be able to cover the entire cost of every Orphan Well currently on the books.
That was the deal.
Won't somebody please think of the orphans?
And finally, there needs to be a public inquiry into the Alberta Energy Regulator to uncover the decades of failure that led [music] to this multi-billion dollar mess.
This problem emerges in any jurisdiction that has an industry that is this uh this essential to funding all the government and government operations.
They lose the ability to really control it or regulate it in a significant way.
It's it's like the example of company towns. When the company was the only major employer and the town existed because of that employment, the the regulatory force of that government can't do anything [music] to that company. The company runs the show.
And the size of the Alberta oil and gas industry has meant it's slowly put Alberta in that position. So, there's all these examples that essentially point at the AER being a captured regulator. Like you know, some people like to throw around the word corruption, but either way, it's like a a body that's been captured by the industry it's supposed [music] to regulate. So, its board are almost all representatives who came from oil and gas companies or fossil fuel companies.
[music] Alberta Energy Regulator has been from the time it was created uh handed over largely to industry [music] to operate a regulator that regulates them entirely for the benefit of growing industry and protecting industry and enabling industry to get the most investment that it can by sacrificing environmental concerns or pushing them down the road and [music] hoping that they just won't end up being real.
Which can't happen. They are real.
They're there.
Uh if you just do bad accounting to pretend they aren't they just grow and grow and grow. I think our representative institutions are our politicians like they they no longer represent our interests. Like I think they're putting the interests of these companies before ordinary people and until they feel that there's some sort of like um organized resistance or credible threat, like not not in a non-violent way, but some sort of like credible threat from below where where if they're going to make decisions that go against ordinary people, against landowners, >> [music] >> against all of us as taxpayers, that they're going to feel some sort of consequences for it. Um and so that's the work that [music] um CARE, like our coalition is is working towards and that's part of the goal of the cleanup your mess campaign [music] is to try and, you know, organize more Albertans both in urban settings and rural Albertans who have [music] this infrastructure on their land to in a united way, like um essentially demand that that industry be held accountable for cleanup. Alberta is facing multiple challenges in funding public services.
So now is maybe not the best time for the province to take on the added burden of cleaning up after the oil and gas industry.
If proper reforms are made, the next job boom could be in reclamation. You'd be employing oil and gas workers, plus you're repairing landscapes.
At the very least, landowners and local governments should be getting the money that they're owed.
The money exists. It's just being legally stolen.
These resources belong to Alberta by law. In simple terms, maybe it's time the people of Alberta adopt some Rihanna economics. [ __ ] better have my money.
Because if we don't make them pay, you'll be adopting your very own toxic, filthy, orphan well, whether you like it or not.
>> [music] >> Thanks for watching. Hey, you made it to the end. Now, if you are a part of the super majority of Albertans who think that the polluter pays principle should remain in place, you should head to cleanupyourmess.ca where they make it super easy for you to write your MLA. Now, after that, if you want, you can come back here and [music] comment signed and I will personally thank you in the comments. Now, if you are outside of Alberta and you want to support this cause, Ecojustice has been representing landowners with orphan wells on their property. So, you can go check them out. You can give them some money if you can. Links in the description. A big thank you to the flock over on Patreon. [music] You can support the channel, become one of the names you see here. You also get updates and works in progress plus ad-free and uncensored versions of these videos that go up a little bit before they hit YouTube. [music] Plus, the odd newsletter. Your support means the world to me and it helps me make [music] more ambitious videos like this one. So, if you want to be one of those people, you can go to patreon.com/the_goose_media [music] or you can just find the link in the description.
You can also support the goose for free by like liking, subscribing, hyping, commenting, all that [music] good stuff.
Finally, I want to give a shoutout to the Canadian Energy Museum, home of Leduc number one. The staff was super nice there. They let us film. We just rocked up and we're like, "Hey, can we like film in front of your your your your oil wells?" And they're like, "Sure."
Um so, yeah, if you're ever in Leduc County, go learn about the science and history of hydrocarbon energy in Alberta.
But also more importantly, go to cleanupyourmess.ca and send a letter to your MLA. And [music] until next time, peace.
To infinity and beyond.
How's that right? Yeah.
I think the car and oh, we're getting asked to leave.
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