Canadian energy producers lead the world in remediation and reclamation but struggling small and medium-sized oil and gas producers are collapsing in real time, leaving fiscal and environmental liabilities.
At-risk small companies cannot raise money from the private sector to decommission old and inactive wells. Municipalities lose major revenue and facilities are left in a variety of conditions. It is not evasion nor neglect by small gas producers, but a stark reality of their precarious economic positions. The number of orphan wells rose more than 300% since 2015. There are more than 130,000 inactive wells in Canada. Cleanup costs are estimated between $30 billion and $70 billion. The current orphan well system is overwhelmed and risks are costing taxpayers 100% of those costs.
Bill C-221 would enable small producers to raise money from investors exclusively for decommissioning oil and gas wells. It would incentivize and ensure private sector proponents can fulfill environmental responsibilities at the lowest cost to the public.
Bill C-221 is not a perfect remedy for this complex challenge that requires co-operation and ongoing action from federal and provincial governments, which is why I am asking all members to partner together and prioritize real solutions to this urgent environmental challenge for the benefit all Canadians.
This bill can make a real difference to create immediate action with a tax credit that can only be used the year a well is decommissioned, will only exist for six years, and will only be for small and medium-sized producers that need it the most. It is also an open invitation to the federal government to allow flow-through shares for well decommissioning costs, creating lasting action to create jobs and protect the environment.
The Environmental Restoration Incentive Act will help the environment, create immediate jobs for oil and gas workers, and protect taxpayers.
Read the text of the bill here.
Read the press release for the bill here.
Watch the introduction of this bill in the House of Commons here.