The Bitumen Barons Don’t Love You Back

August 10, 2026

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• Energy
• Oil Sands
• Tailings
• WLA Archive

 

Wildlands Advocate article by Pamela Narváez-Torres and Kennedy Halvorson, AWA Conservation Specialists

Read the PDF version here.

 

Growing up in Alberta is one endless reminder of all we owe to the almighty Oil and Gas. If the “I ❤︎⁠ AB O&G” signs plastered on every billboard and tailgate weren’t evidence enough, an MLA recently suggested the province declare an official appreciation day as “a thoughtful way to acknowledge the tremendous impact” of fossil fuels.

But what about what oil and gas owes us?

For some, it’s gut instinct to rush to the resource’s defence, but let’s avoid licking O&G exec’s dress shoes for just a moment — the government is already keeping them spotless.

Alberta’s budget is made and broken by the price of global oil and gas; the $9.4B deficit for the 2025–26 fiscal year announced back in February was due to the then low-price predictions, now surging following the US and Israel’s attack on Iran. Whether Alberta balances its books, whether we have money to pay for essential services like education, health care, and infrastructure, is subject to the whims of a violent boom and bust economy.

That is because a significant portion of our budget relies on resource royalties. Other than personal income taxes ($15.9 billion) and transfer payments from the federal government ($13.7 billion), bitumen royalties and other non-renewable resources ($13.2 billion) are projected to be the largest sources of provincial revenue in 2026.

Those line items don’t quite tell the full story, though. Alberta is the only province that allows companies to opt to pay royalties owed in barrels instead of dollars. These barrels (historically crude oil, but as of 2025 now also include bitumen) are then sold by the Alberta Petroleum Marketing Commission (APMC), a provincial crown corporation under the Department of Energy and Minerals.

If you’re wondering what the benefits are of being a middleman instead of taking the cash up front, you won’t find answers in the budget. In 2026, the APMC is estimated to cost $333 million just to operate. They’ve posted deficits annually since 2019, this year forecasting a net loss of $313 million. At the end of the last fiscal year, the APMC was $5.3 billion in the red.

If that wasn’t enough risk concentrated in a single provincial Crown corporation, the province just expanded its financial exposure even further. Back in January, through an Order in Council, Alberta authorized the APMC to borrow up to $900 million for what it described as “hydrocarbon marketing activities.” Apparently, this line of credit has nothing to do with future pipelines, but the lack of transparency is concerning. At a time when the APMC is already reporting hundreds of millions of dollars in annual losses and sitting in billions in debt, the province has effectively handed it a much larger credit card — with very few public details on how it will be used, or what risks taxpayers are ultimately being asked to absorb.

And that brings us to the bigger picture: The Alberta government isn’t the only one losing money on fossil fuels.

Across the province, the financial cracks are widening. Municipalities are owed roughly $250 million in unpaid oil and gas property taxes — revenue that should be funding local services but instead remains unpaid by oil and gas companies. Landowners are also owed more than $150 million in unpaid surface lease rents, part of it linked to companies that have gone bankrupt and left orphan wells behind. In many cases, the provincial government has stepped in to compensate landowners using taxpayers’ money.

Meanwhile, the oil sands industry carries $51.9 billion in mine liabilities, backed by just $1.8 billion in security deposits held under the Mine Financial Security Program (MFSP). First identified as an issue back in 2015, the most recent Auditor General report found the industry’s calculations continue to “risk overstating the economic value of mining assets.”

“The department continues to exclude development costs from the MFSP asset calculation. Development costs are substantial investments required before oil sands reserves can be extracted and excluding them from the MFSP asset calculation significantly inflates asset values.” – Auditor General, 2025

Then there’s the growing problem of orphaned oil and gas infrastructure — sites that no longer have a legally or financially responsible owner.  As of March 31, 2025, the Orphan Well Association (OWA) estimated it would cost $1.12 billion to clean up its existing inventory of roughly 4,200 orphan wells. That number is now almost certainly outdated, as the OWA’s inventory recently doubled.

In April, the Alberta Energy Regulator (AER) transferred more than 4,000 additional orphan wells and related infrastructure to the OWA following the insolvency of a Calgary-based company, Long Run Exploration Ltd. Court documents estimate the total cost to safely abandon and reclaim all of their assets would be around $476 million. Yet the industry-funded levy meant to cover these costs isn’t keeping pace with the rate of wells being orphaned; in the 2026-27 fiscal year, the levies increased by less than 7 percent, from $144.45 million to $154.56 million. The numbers simply don’t add up.

The scale of Alberta’s aging infrastructure is far bigger than the orphan well inventory alone. The province has more than 477,000 oil and gas wells, but only around 14 percent are currently active (65,000). More than 166,000 wells either produce less than 10 barrels per day or are inactive altogether. Another 95,000 wells have already been decommissioned, but they still require land reclamation. Altogether, this means Alberta is already carrying roughly 250,000 wells that are either awaiting reclamation or are likely headed toward it in the near future.

Estimates from Alberta’s Liability Management Project suggest the total clean-up bill for unreclaimed oil and gas wells could range from $40–70 billion. To the provincial government’s credit, they have at least acknowledged that Alberta is facing a massive and growing liability problem. But instead of dramatically strengthening financial security requirements, the government’s preferred approach has been to consult largely with industry itself on how to deal with its own crisis. The result? The recently proposed Mature Asset Strategy (MAS).

To no one’s surprise, the MAS reads less like a serious solution to Alberta’s aging oil and gas infrastructure problem and more like an industry wish list. This “Strategy” proposes creating new provincial entities — HarvestCo and ClosureCo — to manage aging and orphaned infrastructure. Details remain vague on how these would be funded or operated, but if previous patterns are anything to go by, taxpayers are at undue risk of footing the bill. The MAS also anticipates lowering reclamation standards, repurposing well sites to avoid full cleanup obligation, leaving some wells unplugged, and providing “additional financial support” to accelerate closure work.

At its core, the MAS does not solve Alberta’s liability crisis. It weakens the Polluter Pays Principle, shifts more risk onto the public, reduces industry accountability, and lowers environmental protections — all while failing to address the fundamental problem: the province still is not collecting nearly enough money from oil and gas companies to cover the eventual cleanup costs.

The most bitter irony is that all of this is happening in an industry that makes hand over fist money every year.

2025 was a record year in production the fifth record-breaking year in a row. Members of the Pathways Alliance (shortened from the Oil Sands Pathways to Net Zero Alliance), now called the Oilsands Alliance as the companies distance themselves from any notion of achieving net zero emissions, made adjusted net earnings totalling $36 billion, while also paying $32.1 billion out to shareholders. On this, Canadian Natural Resources Ltd. remarked,

“2025 was the best operational year in the Company’s long history of maximizing value for our shareholders [emphasis added].”

A report by Canadians for Tax Fairness found that because the majority of oil sands company shares are foreign-owned, three-quarters of these profits leave the country and are not reinvested in the Canadian economy. Money made entirely by exploiting publicly owned resources is being exported out of Alberta, away from the communities that assume all the liabilities and risk. Imperial Oil’s chairman, president and CEO Josh Whelan, had this to say about the year:

“Looking ahead, we are confident in our plans to profitably grow volumes, lower unit cash costs, and progress our restructuring, while maintaining our focus on safety and operational excellence [emphasis added].”

A focus on safety and operational excellence somehow includes spilling 843,000 litres of emulsified bitumen near Cold Lake. Not to worry,  Imperial’s official spokespeople have said “sorry this incident occurred”! Restructuring is a subdued way of conveying Imperial’s plan to eliminate 20 percent of its workforce by 2027. This loss of around 900 jobs is an effort to reduce annual expenses by $150 million and “advance its well-established strategy of increasing cash flow and delivering industry-leading shareholder returns.” Human sacrifices for the shareholders — or, as companies prefer to call it, workforce downsizing — have become a common theme in corporate financial reports.

Despite the debts, unpaid fees and fines, existing liabilities and orphaned infrastructure, layoffs, and environmental degradation, oil and gas continues to receive substantial public support. In 2026, the province allocated $166 million in direct subsidies, including $147 million through the Alberta Petrochemicals Incentive Program and another $18 million for carbon capture initiatives. The federal government has done short work submitting to just about every request O&G can make. Under their recently signed Memorandum of Understanding with the province, industry won’t have to comply with the federal Clean Energy Regulations, proposed emissions cap, or the Competition Act’s rules about greenwashing. The federal government has also just unveiled a new carbon tax credit that allows companies to inject captured CO₂ into oil wells to increase production, known as “enhanced oil recovery.” The whole point of storing carbon is to remove greenhouse gas emissions from the atmosphere, but this change (along with all the others) only subsidizes and incentivizes further extraction of fossil fuels, which in turn create more emissions in the atmosphere. This is one of the most insidious ways O&G is making us pay.

In 2024 (the most recently available data), Alberta was responsible for 38 percent of Canada’s total greenhouse gas (GHG) emissions. Alberta’s fossil fuel production accounts for 21 percent of the country’s total emissions alone. Out of the 260 megatonnes (Mt) emitted by the province, around 54 percent came from conventional and unconventional oil and gas exploration, production, transportation, distribution, extraction, and refinement (141 Mt). None of this accounts for the emissions released when the fuels produced by the province are ultimately burned, obscuring Alberta’s total global impact.

To achieve our climate commitments and reach net zero emissions by 2050, the country must begin phasing out fossil fuels, and do so rapidly, to ease the societal impacts of the transition and mitigate the worst predicted impacts of climate change. Already, we are seeing the cascading effects that decades of climate change denial and dithering have wrought.

Alberta is located in one of the world’s four “mega-drying regions,” where terrestrial water storage is being lost at increasingly faster rates due to climate change. The landscape is losing its natural ability to retain water, which has profound implications for our livelihoods. A drier Aberta means increased water insecurity  — less water reliably available for the economy and to meet all our society’s essential needs (think health, hygiene, and sanitation). It means increased costs for food, as the loss of crop and livestock production squeezes supply and creates shortages, as well as higher energy costs, with extreme temperatures becoming more common. In this rapidly changing climate, droughts, wildfires, and floods all become more frequent, severe, and unpredictable, and with that comes increased expenses for responding, managing, mitigating, and preventing the next natural disaster.

Natural Resources Canada estimates the total costs and losses from the 2016 Horse River Fire near Fort McMurray to be over $7.2 billion. The Insurance Bureau of Canada calculated over $1.2 billion in damages from the 2024 wildfires in Jasper, but full costs are yet to be seen as the community continues to rebuild. Addressing Calgary’s 2013 floods has exceeded $6 billion, with the city still working 13 years later to better prepare for and mitigate against similar floods in the future. In the last five years, the Alberta government has paid out almost $7 billion in disaster and emergency assistance for the agriculture and irrigation sector to help address the long-lasting and widespread drought conditions.

These numbers are mind-blowingly large, and yet they don’t even capture all the impacts most keenly felt; landscapes degraded, communities fragmented, homes destroyed, and livelihoods uprooted or lost.

Considering all this, Alberta’s devotion to O&G is reckless and one-sided. Industry’s demands for acquiescence never cease. Taxes? Too high. Regulations? Too stringent. Timelines? Too long. Incentives? Never enough. Nothing less than the unbridled ability to pollute the air, land, and water at the expense of all else.

So, what does O&G owe us?

Everything.

And yet, industry profits remain privatized while the people pay. Alberta continues to bend over backwards to subsidize and protect O&G while operating under a system that leaves the public exposed to tens of billions of dollars in environmental liabilities.

At some point, we have to ask: how long can we keep justifying this relationship when the bitumen barons clearly aren’t loving us back?