No silver bullet solution for abandoned wells: Kenney

There is no quick, easy fix in terms of Alberta's abandoned oil wells that potentially represent a taxpayer-funded cleanup that could cost well into the tens of billions of dollars, says the leader of the United Conservative Party.

“Let's face it, there's no silver bullet to solve the problem of cleaning up abandoned wells, many of which were drilled by companies that no longer exist,” Jason Kenney told the Round Up last week during a stop in Sundre.

In the future, Kenney said that part of the answer would be to ensure proper bonding of companies that intend to drill wells. But regardless of whether such rules should in the past have been in place, “there's no point in crying over spilled milk,” he said during an interview at MLA Jason Nixon's constituency office.

Besides, new technologies have yielded innovative extraction methods that over the past few decades have substantially increased our ability to reach once unobtainable reserves, he said.

“The recoverable percentage goes up and up and up with horizontal drilling, with fracking, with all sorts of other new technologies. So a lot of those abandoned wells are actually going back into production,” he said, citing as an example a small Calgary-based company that has purchased some abandoned wells with the intent of bringing them back into production.

“Perhaps there is an economic value that we can extract from that.”

When asked about the potential to convert suitably located abandoned wells into geothermal stations that generate free, clean power, Kenney said he was not as familiar with such a proposal.

“But if there is a technology that works economically, I'm sure an entrepreneur will find a way to do that, and I would support that.”

Although the international community is slowly but surely ramping up efforts to reduce dependency on hydrocarbon fuels and emissions, the International Energy Agency projects the demand for fossil fuels will continue to grow until at least 2045, he said.

“They can't make realistic projections beyond that.”

He acknowledged there exists a possibility that new technologies will over the coming years and decades herald a diminishing dependence on hydrocarbon energy, and that Alberta must prepare for such a prospective future by further diversifying the province's energy sector.

“Oil and gas, as a share of our economy, has shrunk by about a third in the past three decades. So our economy is a lot more diverse.”

However, that happened largely as a result of a growing population that drove sectors such as construction and retail services, he said.

“What caused our population to double in the past four decades? Well, a lot of it was high paying jobs in the energy sector” and the spinoff beneficial ripple effect of that economic activity, he said.

So oil and gas should be considered a vital asset and part of the solution towards diversification, not a problem or something to be shunned, he added.

“If we want to prepare for the economy of the future, we should maximize the value of this resource while there is a growing global demand for it. That allows us to have the revenues to invest in things like research and development, science, technology, post-secondary education,” he said.

“The economy will continue to diversify naturally, organically, but we need to maximize the value of that resource.”

While Alberta sells oil to the U.S. at $33 a barrel, America sells its supply to the world at $61, he said.

“This is pathetic. We've become a bargain basement economy.”

Market access pipelines, deregulation, lowering tax rates, restoring investor confidence and maximizing the value of oil and gas are all key aspects of his strategy for economic diversification.

Despite his party's many differences with the governing NDP, Kenney nevertheless expressed a willingness to cast partisan politics aside for the benefit of Alberta.

“Wherever we believe the NDP is standing up in our interests, we will support them,” he said.

“We are quite happy to put aside partisanship in the defence of Alberta's common interests.”

There are issues the two parties are on the same page with, he said.

“I've commended them for their efforts to restrain unreasonable public sector executive compensation…they've brought some restraint to that.”

Additionally, Kenney said he agrees with some changes the NDP has brought forward regarding electoral finance law.

“It was a little bit like the Wild West here in the past.”

And although he does not necessarily agree on every detail, Kenney and the UCP support the elimination of corporate and union dues from provincial politics. He even went so far as to commend Premier Rachel Notley for starting to impose consequences on the B.C. government over our provincial neighbour's threats to block the TransMountain pipeline expansion.

“Although I regret that she's decided to back off on that lately.”

However, the UCP leader remains firm on his commitment to outright repeal the carbon tax if elected the province's next premier in 2019.

“The carbon tax is an issue I took a clear position on, partly because it's absolutely clear to me that there is a consensus verging on unanimity amongst our supporters in Alberta, that the carbon tax should be scrapped,” he said.

“Punishing consumers is not an environmental strategy.”

He labelled the levy as having limited flexibility in the sense that a senior, for example, can only turn down the heat so much when temperatures drop below -30 C. Also, Albertans can't drive less to get to work.

“I know our premier told people to take the bus — I haven't seen any buses going around here in Sundre.”

There are some other governments around the globe, such as Australia, that have either repealed or abandoned plans to introduce a carbon tax, and that “no other major energy producing country in the world is shooting itself in the foot like this.”

With a little more than one year to go before the next provincial election, Kenney said the UCP's focus will largely be to create a policy framework based on feedback from Albertans.

“It would be incredibly arrogant of me to dictate the policy agenda for a brand new party before its members can even be consulted long before an election,” he said.

Following efforts to reach out to the province's grassroots, an official party platform is expected to be made public in the spring of 2019, he said.

“We're not going to be harassed into running around improvising policy. We take this very seriously because we think the policies we develop are very likely to be the policies of the next Alberta government,” he said.

“This is a serious, deliberate process. It's not about me shooting from the hip.”