Yukoners shouldn't be on the hook to clean up Oil and Gas infrastructure
A single Kootaneelee gas well abandonment is expected to cost the public $1.8 million
The Yukon NDP is calling on the government to take action so the public isn’t left to pay for cleanup costs of Oil and Gas companies. Following the insolvency of Texas-based EFLO, the Government of Yukon was left with the responsibility for the abandonment of one of the company’s gas wells in the Kootaneelee region. The project is currently being reviewed by YESAB.
In response to a question by Yukon NDP Leader Liz Hanson, the government indicated that the abandonment cost is estimated at $2.4 million, with EFLO’s security deposit covering only $625,000.
“It’s a shame that the public will have to pay at least $1.8 million to clean up what was a private industrial operation. It shows that the current financial security system isn’t working. The public needs better protection or we will likely be on the hook again the next time a resource company goes under” said Hanson.
Hanson also asked what security deposit the government holds from Oil and Gas companies operating in the Eagle Plains area. The government indicated that the current security deposit is a mere $1.1 million, less than half the cost of abandoning a single well in the Kootaneelee region.
"It doesn’t make sense that our security deposit for all Oil and Gas exploration in Eagle Plains is less than the cost of abandoning a single well in the Kootaneelee” added Hanson. "This leaves the public at risk. Remediation cost should always be factored in upfront, otherwise the public will be responsible for these costs down the road.”
Hanson pointed to Alberta as a cautionary tale. The province has over 1400 “orphaned wells”, which have no owners, meaning responsibility for clean-up falls on the public, leaving the government with liabilities worth over $30 billion.