UCalgary Law hosts first International Colloquium on Closure Liabilities in the Energy Sector

Experts from around the world gathered at the University of Calgary's Faculty of Law last month for the first International Colloquium on Closure Liabilities in the Energy Sector. 

Scholars, regulators, First Nations representatives and industry professionals came together to discuss one of the most pressing challenges facing the global energy industry: how to effectively fund and manage the cleanup of energy infrastructure after it has ceased being productive.

Organized by Martin Olszynski, an associate professor with UCalgary Law and current Chair in Energy, Resources and Sustainability, the gathering saw attendees from Canada, the U.S., Australia and the U.K. discuss the rising costs and complexities of decommissioning energy assets. 

“The conference was about ensuring the energy sector cleans up after itself, which is something that they're actually obligated to do anyway, but, in multiple jurisdictions, and certainly in Alberta, we have a clear sense that is not happening the way it's supposed to,” Olszynski says.

Over the past several years, closure liabilities have emerged as a major public and policy concern. These future costs, often running into the hundreds of billions of dollars, are tied to the decommissioning and reclamation of energy sites such as oil and gas wells, oilsands mines, and renewable-energy projects. The colloquium aimed to tackle these challenges and explore potential solutions across sectors and jurisdictions. 

Beyond Alberta

One of the conference’s key takeaways, Olszynski notes, was the realization that Alberta’s experience with unfunded liabilities is far from unique. 

“The problem that we’re experiencing in Alberta, the ‘drill and dash’ problem, is ubiquitous in all oil and gas producing regions,” he says. “Every major oil and gas-producing jurisdiction is struggling to find the funds to pay for the cleanup of these wells, and that cleanup then is increasingly being foisted onto the taxpayer.”

Olszynski says that, while closure-liability issues are most visible in the oil and gas industry, they extend to renewable and nuclear energy, as well. 

“It is a cross-sectoral challenge, but different sectors have approached it differently," he says. 

"We don’t see the same degree of a problem in those other sectors as we’re seeing in oil and gas.”

The conference included a keynote address by Patrick Schmidt, a senior engineer with Crown-Indigenous Relations and Northern Affairs Canada, who shared lessons from the Giant Mine remediation project in the Northwest Territories, the most expensive taxpayer-funded cleanup in Canadian history. 

The discussion underscored the immense uncertainty and cost of restoring industrial sites. 

“When we talk about these liabilities in Alberta, we estimate that they’re around $300 billion in unfunded closure liabilities,” Olszynski says. 

“That’s almost certainly a conservative estimate.”

Involvement within the law school

The event concluded with a call to continue collaboration and knowledge sharing. The Faculty of Law’s Public Interest Law Clinic, a co-sponsor of the colloquium, plans to support the publication of submitted papers to inform public law and policy development.

“The Closure Liabilities in the Energy Sector Colloquium provided an informative and insightful look at how jurisdictions around the world are addressing the problem of unfunded closure liabilities associated with energy development,” says clinic executive director Shaun Fluker, LLM'04. 

“Alberta faces its own crisis in unfunded closure liabilities.

"Accordingly, the faculty's Public Interest Law Clinic will contribute funds to facilitate the publication of submitted papers in order to disseminate the findings and knowledge generated from this colloquium, and inform ongoing public law and policy work on this very important subject.”

The conference discussions were also able to shape the perspectives of future lawyers. 

Among the participants was first-year law student Deborah Uwagboi, who says the event deepened her understanding of energy and environmental law.

“The recurring theme across the panels was that the legal system has yet to prioritize end-of-life responsibilities when it comes to energy infrastructure. This gap leaves the government and communities vulnerable to financial and environmental risk,” she says.

Uwagboi says she plans to work in environmental and energy law after graudation. 

“I hope to contribute to the conversation on closure liabilities by examining how legal and policy frameworks can encourage companies to integrate decommissioning obligations when creating energy infrastructure,” she says.

The start of an ongoing effort

Reflecting on the event, Olszynski says it was gratifying to bring academics from around the world to the heart of Canada’s oil and gas industry for these discussions, and to offer students the opportunity to learn more about these issues and participate in the discourse.

“The conference ended with the question of, what do we do next? How do we solve this, engaging in finding the solutions?” he says. 

“Looking ahead to the next colloquium, we’ll continue to do this work and keep pushing forward.”

A summary of the colloquium’s proceedings will be published in an upcoming blog on UCalgary Law’s Ablawg site, continuing the conversation on this critical issue.