By: Drew Yewchuk
PDF Version: Another Year Gone Under the Mine Financial Security Program
Legislation Commented On: Annual Mine Financial Security Program Submissions, 2021 Submissions for 2020 Reporting Year
In a post back in May 2021, I complained about a change to Alberta’s Mine Financial Security Program (MFSP). This is a follow-up post in response to the Alberta Energy Regulator (AER) posting the annual submissions under the program on September 30, 2021. Note that each annual submission is for the September of the previous year, so the 2021 report is relevant to the situation in September 2020.
The MFSP is Alberta’s system for ensuring that companies pay for the reclamation and remediation of their mines, both oilsands and coal (but not conventional oil and gas, which is handled by a different liability management system that also does not work properly). In short, the MFSP allows companies to use an asset safety factor against their estimated future environmental liabilities, such that if a mine’s resource assets are worth more than three times the total anticipated reclamation costs (3:1), nothing beyond an initial (and wholly inadequate) ‘base deposit’ is required, provided also that the planned reclamation is conducted as scheduled, and the mine has more than 15 years of reserves remaining. Companies may also choose to skip those calculations and pay full security based on an estimate of the total cost of clean-up.
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