Alberta hired law firm to collect oil sands debts, but details are being kept under wraps

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The United Conservative Party government of Alberta Premier Jason Kenney paid more than $ 100,000 to an Edmonton law firm to sue overdue oil operators who owe millions of dollars to federal departments and provincial environment.

In the past five years, at least 19 invoices totaling about $ 3.27 million have gone unpaid, according to documents released in connection with an access to information request.

The provincial government is supposed to collect the fees as part of a joint program with the federal government to monitor the environmental impacts of oil sands development. The program was created in 2012 in response to international criticism of the lack of monitoring of the Alberta oil field, which contains the world’s third largest reserve of crude oil after Saudi Arabia and Venezuela, according to the government. Canadian.

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Athabasca Chipewyan First Nation Chief Allan Adam, who represents a community in the heart of northern Alberta’s industrial region, said unpaid bills are another sign government officials are allowing companies to break rules and put communities at risk.

“How come they don’t take the license away from those who don’t pay their fair share?” He asked in an interview with The Narwhal.

“They’ve gotten away with this for too long,” he said of the companies.

In the spring of 2020, there was another example of what Adam described as weak industrial surveillance. At that time, he criticized the Alberta government for temporarily weakening environmental regulations for all oil and gas companies after the industry called for relief during the coronavirus pandemic.

Alberta oil sands debt shrouded in secrecy

Details about unpaid fees and debt collection contracts are shrouded in secrecy.

There was no tender or public tender for any of the three contracts Alberta awarded to Witten LLP, the law firm hired to collect the unpaid fees, according to a provincial website that lists sole-source contracts. Each fee collection contract was worth $ 35,000. The provincial Department of Justice awarded the first two contracts to the law firm in March 2020 and it awarded a third contract to Witten LLP in March 2021.

Under the Environmental Protection and Enhancement Act, oil sands operators are billed and pay an annual fund of about $ 50 million that covers the costs of environmental monitoring. In addition to the loosely defined parameters for debt collection, the law states that non-payment within 45 days of assessment means that companies face a 20 percent penalty which could be waived by the minister.

Narwhal was unable to determine if a business was facing a penalty for unpaid fees. The Alberta Department of Environment and Parks, which oversees environmental monitoring of the oil sands in conjunction with Environment and Climate Change Canada, did not respond to repeated emails and phone calls seeking comment. The Federal Ministry responded to The Narwhal but declined to comment.

About 50 different companies were billed as part of the monitoring program between 2016 and 2021, according to documents obtained by The Narwhal. Alberta has censored individual amounts billed and owed and it’s unclear which companies are in bad shape.

The two contracts awarded to Witten LLP in March 2020 were to recover unpaid fees for fiscal years 2017-18, 2018-19 and 2019-20. The Freedom of Information request, made in January 2021, continued to show unpaid invoices for those years.

Alberta has also refused to release copies of its contract (s) with Witten LLP, in response to separate requests under access to information legislation, even censoring details of contracts published on its list. issued sole-source contracts.

Witten LLP also did not respond to emails and phone messages requesting comment.

Official Opposition Environment Critic Marlin Schmidt said he did not think the government was doing enough to hold operators to account.

“The government, I don’t think, is pursuing these bill collections wholeheartedly,” said Schmidt, a groundwater contamination scientist who now represents the provincial riding of Edmonton-Gold Bar to the NDP.

“I think the tools are there, it’s just that the government has to show a willingness to use them.”

While the public list of provincial sole-source contracts did not identify companies past due in 2020, a third contract awarded to Witten LLP in March 2021 singled out Surmont Energy for not paying its fees.

Surmont Energy is an in situ operation headquartered in Calgary. In an email to The Narwhal, the company’s interim CEO Rick Orman wrote that when he took the helm in April 2021, he “immediately began discussions … to make arrangements to pay the fees. unpaid “.

Orman added that Surmont reached an agreement in September with administrators of the monitoring program “to the satisfaction of both parties,” but he did not disclose details.

Orman previously served on Surmont’s board of directors, but did not respond to whether the board should have known about the unpaid fees.

Scientists skeptical of industry involvement

The annual budget for the surveillance program has been reduced amid the pandemic from about $ 50 million to $ 44 million for 2020-2021. The Canadian Press reported that much of the reduction was due to pandemic restrictions that resulted in a shortened fieldwork season. For 2020-2021, governments have agreed that there will be no monitoring of the main branch of the Athabasca River, even if the province considers discharging water from tailings ponds filled with industry chemicals.

Two scientists who contributed to the oil sands monitoring program in its early stages echoed the concerns of Adam of the Athabasca Chipewyan First Nation about unpaid fees. They suggested that not collecting the fees is a sign that the industry has too much control over the program.

Air quality management consultant David Spink was involved in some of the program design discussions shortly after retiring from a civil servant position with the Alberta Department of the Environment. He said he had some trepidation about business involvement early on.

“Of course we need the industry at the table,” Spink said in an interview. “I think they should be there because we need their perspective.

“But my point is that the federal and provincial governments, especially the provincial government, are paying too much attention to industry concerns and not enough to science-based monitoring needs and monitoring needs. in terms of resolving issues and concerns. of the indigenous peoples who are up there.

Jeff Brook, a former Environment Canada scientist, suggested in a separate interview that the program has prioritized efforts to strengthen the industry’s public image over improving environmental monitoring. He added: “It just seems a little ridiculous” to take a hat off to industry to make sure governments can protect the environment.

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