Who cleans up the mess when oil and mining companies go bankrupt? – by Tim Gray (Globe and Mail – July 14, 2017)


Tim Gray is the executive director of Environmental Defence.

Last week, the Alberta Energy Regulator (AER) announced it would appeal a judge’s ruling that gave creditors priority access to a bankrupt oil company’s assets over its financial obligations to clean up abandoned wells. The AER is right to appeal because cleaning up environmental damage should take precedent over financial obligations. This appeal highlights a broader problem in Canada and the need for legislative action both provincially and federally.

The broader problem is that Canadians are burdened by the accumulating financial liability associated with cleaning up the environmental messes made by abandoned oil wells, closed mines and decaying tailings dams.

For example, in Alberta, the oil sands have been producing a vast and growing legacy of tailings ponds. These ponds contain leftover toxic hydrocarbons, heavy metals, water and sand. They now cover an area larger than the preamalgamation city of Toronto and Vancouver combined and are growing at a rate of 25 million litres a day.

Estimates show that it will cost at least $44.5-billion to clean up the existing tailings ponds. This represents a bill greater than all the royalties paid to the Province of Alberta since the inception of oil sands business in 1970. Cleaning them up is the only option. The ponds are currently killing wildlife who try to drink from them and require constant costly maintenance to stop the dams from crumbling and releasing their toxic holdings.

Most people will also remember the Giant Mine in Yellowknife. It was made infamous after its owners packed up shop in 2004. Their parting gift was a mine filled with 237,000 tonnes of arsenic trioxide, a deadly byproduct of gold mining. The chemical threatened to leak into Great Slave Lake and Yellowknife’s drinking-water supply.

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