Two Hills County Resident left in the Lurch

Two Hills County Resident left in the Lurch

Michelle Pinon News Advertiser

Two Hills county resident Dwight Popowich is among thousands of Albertans with oil and gas wells on their property that have been abandoned by industry giants, many of which have claimed bankruptcy in recent years.

Not only has Popowich, who owns 75 acres of land near Two Hills, been financially left in the lurch by Sequoia Energy that went bankrupt in March of 2018; he’s been left in limbo by the province’s energy regulator which has yet to transfer the license of the shallow gas well over to the Orphan Well Association, (OWA), which manages the closure and reclamation of oil and gas wells and pipelines in Alberta.

“I never heard if the well would be cleaned up. No one’s checked on it. I don’t know if it’s safe or leaking,” stated Popowich, who feels his health and safety have been put at risk because the well has been abandoned. “Under the law, every well has to have a licensed operator in charge of it and an emergency response plan to take care of all the neighbours, but nothing and no one is looking after it.” Popowich said, “The minute the license was pulled by the Alberta Energy Regulator, (AER), it should have been turned over to Orphan Well Association, which was set up to take care of exactly this problem. Oil and gas companies pay levies to the Orphan Well Association. The problem is our AER, as incompetent as it is, did not take enough money on deposit to get the job done. As the money from companies became less and less, there weren’t levies being paid to the association to take of the problem. In addition, Popowich said no timelines were put in place by the AER to ensure those well sites get cleaned up.

There’s no way the system is working. A few years ago the government had to borrow $235 million just clean up what they (OWA) had in their inventory. And then came along Sequoia and their 2,300 wells, and those wells haven`t been added to the OWA. We’re talking thousands and thousands of wells and no money to pay for it.”

ALPN Research Regan Boychuk and Dr. David Swann speak to the media regarding the issue of orphan wells and tax payments outside McDougall Centre in Calgary on Jan. 22.

In my case it`s really not an orphan well. Even though Sequoia has gone bankrupt, Popowich said the AER has the authority to transfer the license back to the original owner, Perpetual Energy, and get the company to pay for the expenses associated with reclamation of the well. “We know who the owner of the well is, or who the mother of this is well is, and that’s Perpetual Energy. They’re the ones who drilled it, and under polluter pay regulations it’s up to them to clean it up.”

Popowich said he wasn’t aware Perpetual Energy had sold the well to Sequoia until his yearly lease payment of $2,500 didn`t arrive in 2017. It wasn’t until the Spring of 2018 that he heard the news announcement that Sequoia had filed for bankruptcy.

In his opinion, “The AER should not have transferred the license from Perpetual Energy to Sequoia as it was not in the best interest of the province. It was only in interest of Perpetual as it got rid of some of their liability. It’s the closest thing to fraud that was legitimized by the regulator. The regulator was the one that was supposed to protect this from happening, and they haven`t done that. The people of Alberta need to understand what is really happening with their regulator. They have been captured by the industry, and industry is calling the shots.

It`s a bizarre situation. Once the lease was signed they treated us as if we died. That we don`t exist. We have no rights to the property any longer. It’s expropriation of our land. We’re paid for the loss of the use of our land. Offsets come into play so as long as a well or pipeline is still in the ground, it puts restrictions on the land and the landowner. Even if well was abandoned and reclaimed there would be restrictions on the use and development of the land. We have no property rights. That’s really what this issue is all about.”

Popowich said the situation has created a “snowball effect” and rural municipalities now facing serious financial issues because oil and gas companies haven’t paid their taxes. “My councillor has told me my taxes are going to go up and services go down in order to make up for the shortfall. And then there’s the amount money that`s being pulled out of the local economy, in the millions of dollars, because these payments are not being paid to us (property owners); and we can’t spend money what we don`t have locally.” Popowich went on to say, “We’re taking a real bashing out here in rural Alberta.” The situation has tied the hands of municipalities which are not allowed to borrow money if they are short of tax revenue. The only recourse is for municipalities to either reduce spending, take money out of reserves or raised taxes. “It’s not fair we will have to pay higher property tax and have services cut.”

“I am glad to hear that the auditor general is looking into this. This is extremely good news. However, I hear Mr. Kenney’s comments about the tax revolt that’s happening in rural Alberta, and when he says we can`t get blood out of a stone; I’d understand that if these polluter pay, these companies that are leaving these orphan wells, were made out of stone, that would be true, but they’re not. They’re made out of flesh and blood, because they are company shareholders. They’re human beings that’s who they are, and that’s who he’s trying to protect right now. He needs to stop protecting those people and let the law which already exists to push these wells back onto the polluters because they’re the ones who made the mess, and they need to pay for the clean up. If they sold those assets off it would go back to the company that had them in the first place. The laws exist out there to give us a good ethical product, but if you don’t follow those laws there’s nothing ethical about it at all.”

Popowich is very disappointed the Conservative government has “dropped the ball” and placed the province in such “dire jeopardy” right now. “The people of Alberta need to understand that these guys have not done what they said they would do.”

He added,”We have no leverage other than speaking out like we are doing now.” Popowich is doing what he can at the local level as well as the provincial level as he is a member of the Alberta Liabilities Disclosure Project (ALDP) which is speaking out on the issue. On Jan. 22, ALPN member Dr. David Swann, retired MLA and former Leader of the Alberta Opposition, held a news conference in Calgary. Swann, and fellow members of the coalition are calling on the Alberta government to hold oil and gas companies accountable for refusing to pay their rural property taxes and to clean up those well sites. ALPN member Regan Boychuk stated he wants the province to put an end to tax cuts for oil and gas companies and get them to clean up their act.