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Orphan wells, $18 billion in federal subsidies and W. Brett Wilson
93 Plays3 years ago
Julia Levin of Environmental Defence joins us to talk about her recently released report that dives into just how much financial support the fossil fuel industry squeezes out of the federal government and we also have Jeremy Appel on to discuss his investigative deep-dive into the 16 orphan wells famous rich guy W. Brett Wilson was able to dump on the public. Would it surprise you to discover that these two are connected? Listen to the pod to find out how.
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Transcript
Introduction to Harbinger Media Network's New Podcast
00:00:00
Speaker
The Progress Report is a proud member of the Harbinger Media Network. A new podcast on the network I want to highlight is the latest from the Alberta Advantage, titled Against Corporate Feminism. Let's lean in, more Lenin. On it, Team Advantage comes together to discuss corporate feminism, its faults, and to consider how socialist feminism might offer a better solution. And that's just one show I'm highlighting on the network.
00:00:23
Speaker
But Harbinger is really a fantastic project, challenging corporate and liberal media dominance with a clear political point of view. Get access to exclusive shows and other supporter-only content at harbingermedianetwork.com. Now, on to the show.
00:00:49
Speaker
Friends
Meet the Guests: Jeremy Appel and Julia Levin
00:00:50
Speaker
and enemies, welcome to The Progress Report. I am your host, Duncan Kinney. We're recording today here in Amiskochi, Wisconsin, otherwise known as Edmonton, Alberta, here in Treaty 6 territory. Joining us today is friend of the pod and returning guest and champion intrepid, Alberta-based investigative reporter Jeremy Appel.
00:01:07
Speaker
Also joining us today for the very first time is Julia Levin, a Climate and Energy Program Manager with Environmental Defense, and the author of a recently released report that found that the federal government is massively subsidizing the fossil fuel industry. Jeremy and Julia, welcome to the pod. Great to be here. Thanks for having me, Duncan.
00:01:29
Speaker
So
Federal Subsidies to Oil and Gas Industry
00:01:30
Speaker
Jeremy, I mean, I think you very recently just did a deep dive on the micro scale of how these subsidies work, uh, by looking into the orphan wells and the environmental liabilities and who cleans them up, uh, that were left behind by kind of quasi celebrity rich guy, shit poster, uh, W Brett Wilson.
00:01:53
Speaker
But Julia, your report is really about the macro scale of how much money and largess the federal government doles out to the oil and gas industry. So why do we dive into your report first, Julia? When we're talking about the subsidies that the oil and gas industry receives in Canada, how much money are we talking about here? How much money did the oil and gas industry receive from the federal government in 2020? And how did you arrive at that number?
00:02:23
Speaker
Yeah, it's a lot of money. So we looked at both the subsidies and the supports and we can get into that in a little bit, the difference between those. And we found that in 2020, the federal government announced a minimum of nearly $18 billion
00:02:39
Speaker
And I'll caveat that just by saying, we arrived at this number by tracking announcements, looking through departmental funding, look at company quarterly reporting, because the government doesn't make it easy on us. They don't do any of their own reporting. They're just not transparent.
00:02:54
Speaker
when it comes to the support they provide to oil and gas. So our figures, this huge number, this nearly 18 billion number, is certainly an underestimation. Also, because on the tax side, which we know is significant because there's a number of federal tax breaks that go to oil and gas companies, there's just no public transparency there. Of course. I mean, the federal government probably doesn't want to shine a bright light on the fact that they're
00:03:25
Speaker
handing out money left over in FIST to what used to be a very profitable industry these
Types and Transparency of Subsidies
00:03:30
Speaker
days, kind of less so. But what's the breakdown on these subsidies? What different types of ways are the government handing out money and supporting the fossil fuel industry?
00:03:45
Speaker
So in terms of when we when we talk about subsidies we talk we talking about two general buckets. One is tax incentives and one is direct spending so that would be, for example, the money that natural resources Canada hands out in their clean growth programs. Another example of the direct spending that we
00:04:05
Speaker
that we tallied up in 2020 was $380 million for Newfoundland's offshore industry. A lot of that went into maintaining idled infrastructure. There was also $750 million to pay companies to put in place
00:04:24
Speaker
technologies and tools to reduce their methane emissions. Those are things that companies could easily pay for on their own. And we could just regulate that outcome. Instead, we're handing out nearly a billion to companies to make that happen. So that's what we, so one part of the subsidies is direct spending. And all in 2020, there was 3.2 billion
00:04:44
Speaker
$3.3 billion in direct spending. Then we have the tax incentives, and that's part of the subsidies category, but that we just have no idea. We know there was a couple dozen millions in flow through shares. We know that there were some tariff exemptions, like a one tariff exemption for steel for LNG in British Columbia that was
00:05:05
Speaker
that was estimated around a billion, but those numbers weren't included in our report. But the lion's share of the support that Canada gives is through public financing through Crown Corporations. So that's when federal agencies give access to credit, loans, loan guarantees, equity, et cetera. And most of that money, so the total public financing portion of the 18 billion,
00:05:30
Speaker
was $13.5 billion. And most of that was through Export Development Canada, it's kind of shady Crown Corporation. But some of it was also through Business Development Bank of Canada through their new COVID support program, the Business Credit Availability Program. But again, there's no transparency there. So that's just what I could find in quarterly reporting. So that's entirely an underestimation as well.
00:05:56
Speaker
Yeah. So I am, I am just a humble podcaster and editor of a small independent media organization.
Consequences of Subsidies
00:06:05
Speaker
And, and Jeremy, you know, you're not some big wheel yourself. You're not making huge decisions that affect billions of dollars, but this, this seems bad to me. Would you agree, Jer? Yeah, not great. Not ideal. Um,
00:06:21
Speaker
Also interesting that this is government, at least here in Alberta, that is perceived as being against the oil and gas industry contrary to all evidence, which points in the opposite direction as Julia has just outlined.
00:06:44
Speaker
Yeah, I mean, this does not even take into account the gobs of money that our provincial government is handing the oil and gas industry. So that's very comforting. Yeah, that's a good point. This is just the tip of the iceberg. Yeah, exactly right. Julie, you're the one who's done a deep dive on this issue. What are the arguments you make for why these subsidies are in fact bad?
00:07:10
Speaker
In our report, we lay out five consequences of fossil fuel subsidies, five reasons why these should all be eliminated. The first is pretty obvious. Fossil fuel subsidies contribute to climate change. We're making it cheaper to find, extract, refine fossil fuels. So we're encouraging the production and consumption, but primarily the production in Canada.
00:07:35
Speaker
There's two types of subsidies. Other countries give a lot of consumption subsidies, so consumer and subsidies, but in Canada, at the federal level, it's mostly production subsidies. We're at a time when we need to be figuring out how we transition away, how we phase out production of oil and gas.
00:07:52
Speaker
These subsidies do the exact opposite. They prop up the companies that are most responsible for the climate crisis. And it also just runs counter to our other climate policies. So we have a carbon price.
00:08:07
Speaker
At least not only charge charge companies for their carbon pollution I mean we don't charge most of the emissions in the, in the oil and gas sector 80 to 90% of those emissions aren't aren't priced but but normally carbon pricing is about putting the price on carbon, and then with these subsidies we turn around and give
00:08:26
Speaker
give that money right back. So contributing to climate change is like the obvious, obvious consequence of fossil fuel subsidies. They also harm our health. There was a report out from Harvard University just a couple of months ago that found that one in five premature deaths globally is caused by air pollution. It's almost nine million people globally each year. In Canada, that's over 30,000 people each year. That's just from the burning of fossil fuels, not from climate impacts. So we're directly subsidizing something that is
00:08:56
Speaker
completely harming our health. We're channeling public resources away from other priorities. What else could we do with $18 billion? I'm sure both of you could think of examples of where you'd want that money to go. I can't think of anything. I would like a train between Edmonton and Calgary. That's what I want. I want a choo-choo train. Jeremy, what do you want? A choo-choo train. What do I want?
00:09:20
Speaker
some sort of I mean, I don't know, pharma care, which the government has talked about doing at least federal liberals have been talking about doing my entire life. And apparently, when it comes time for them to do it, it's provincial jurisdiction and can't help you. But what I think beyond the environmental and health,
00:09:50
Speaker
Aspects, it also seems to me to be a massive transfer of wealth upwards Is that am I reading that right Julia? Yeah Yeah This is directly channels public resources into private hands and the hands of some of the most profitable companies in in the country So definitely definitely transfer of wealth. That's you know Shouldn't be okay shouldn't shouldn't
00:10:19
Speaker
government shouldn't get away with allowing that. These aren't subsidies that lead to job creation. We know that fossil fuel industries create fewer jobs per unit of output than any sector of the Canadian economy, and they totally distort the energy market. That's the last point. This means we're favoring oil and gas over renewable energy. It's really important that Murray Edwards stacks up another billion when it comes to the old upward transfer of wealth there. If anyone needs the help,
00:10:49
Speaker
It's that guy. He is a job creator. But you make some excellent points, Julia, about why these subsidies do, in fact, suck ass. And so what is the reason given by the government, the various governments that have existed over the years, about why these subsidies exist, why they don't get rid of them?
Unfulfilled Government Commitment to Eliminating Subsidies
00:11:16
Speaker
Yeah, it's a good question. Great question to ask them. So to back up a bit, in 2009, the government at the time, the previous administration, first committed to eliminating fossil fuel subsidies. So this is a commitment that goes back more than 10 years and through both of the political parties that have been in charge of government since then. And yet, we're only seeing subsidies go up.
00:11:45
Speaker
Obviously, it just speaks to the influence of the oil and gas sector. So we did see an increase in subsidies as a result of COVID, and it is no wonder, because if you look at the access that the oil and gas companies had to government over the pandemic, they've been meeting with government officials an average of three to five times every working day since the pandemic started.
00:12:08
Speaker
They've been creating like secret working groups with top Nature Canada officials. And they've asked, like the Canadian Association of Petroleum Producers, CAP has asked for specific subsidy programs, like funding to reduce environmental liabilities, like more credit delivered through export development in Canada. And those things have been given to them. So the big reason is that we live in a country where oil and gas has a lot of power over institutions. And when it comes to subsidies,
00:12:38
Speaker
No one, like all the polling that we've ever done shows that Canadians don't like that we're giving subsidies to oil and gas companies, to rich oil and gas companies. So what the government and the oil and gas industry try to do is pretend that they're not getting subsidized. They make it hard for us to find this information out. There's a lack of transparency. They hide behind definitions. So that's all part of the reason why they're getting away with a decade of inaction.
00:13:06
Speaker
Well, you got to hand it to them. You know, what can I say? They really just want it worth the meeting, meeting three to five times a day with government officials. I mean, I barely have time to meet with any government officials on a daily basis. Uh, do you, Jeremy, are you able to get out and meet your government officials to harass them to give you subsidies on a regular basis?
00:13:26
Speaker
Uh, no, nobody who's in a position to do so. Uh, yeah. Like, you know, I, as a journalist, I meet with the odd, uh, I guess not with the current provincial government, but the odd, uh, you know, municipal or, uh, NDP, uh, opposition. Yeah. That's on the course of doing your job. You're not, you're not like, you're not setting up meetings to be like, give me handouts.
00:13:52
Speaker
Exactly. No, but since you've mentioned it, if anyone's listening, if there's a wealthy benefactor listening who wants to give me a handout, I'm open to it. So yes, I would also like any rich people out there who like the show, please hit my DMs. But Julie, I'm curious, you raised a good point about how they try and pretend the subsidies aren't subsidies.
00:14:22
Speaker
Let's talk about that for a second, because everyone's favorite quasi-governmental fossil fuel industry propaganda shop, The War Room, has thoughts on this issue. They've done a lot of reading and writing and researching on the issue of fossil fuel subsidies, and probably doesn't surprise you to learn that they think it's not a big deal. Mark Milke,
00:14:49
Speaker
one of the worst people in the world and noted Winston Churchill Stan. He has written lots of content for the Canadian Energy Centre on the issue of subsidies. He's got a four page fact sheet. He's written posts and
00:15:05
Speaker
One of the people he heavily leans on in his analysis about saying why these subsidies aren't really subsidies, or you can kind of discount this argument, is a study written in 2011 by the one, the only, Jack Mintz.
00:15:20
Speaker
a UFC economist, and notably also sits on the board of directors of Imperial Oil, and also owns millions of dollars in Imperial Oil stock. And it was Jack Mintz that was quoted by Mark Milka saying, quote, measuring fossil fuel subsidies was a tricky art.
00:15:42
Speaker
I guess for Jack Vince, it's incredibly tricky. Unfortunately, we don't have any new subsidy, anti subsidy or subsidy spinning content from
00:15:53
Speaker
The War Room to lean on, all of the posts are from spring of last year, but there is an off-brand version of The War Room called the Canadian Energy News Network. Now, these folks don't have bylines, so unfortunately we can't, we don't know who wrote this. Towered. Clearly. But they did write a piece directly addressing your report, Julia, that I think is worth examining, merely as an exercise.
Critique of Industry's Rebuttal to Levin's Report
00:16:22
Speaker
And Jeremy, you run a fantastic podcast called Big Shiny Takes, which examines and takes down terrible and awful op-eds from Canadian media pundits. And on that podcast, you frequently read out the
00:16:42
Speaker
the op-eds, the awful op-eds, and I will give you the honor this time of, and it's really quite short. This missive is like 300 words, so it's not gonna take too long to go through it. But Jeremy, why don't you do the honors of walking us through the Canadian Energy News Network's rebuttal to Julia's report.
00:17:01
Speaker
Last week, a report was released by Environmental Defense with the help of other groups to detail federal support given to the oil and gas industry in 2020. As we all know, last year was anything but normal, and Canada's oil and gas industry got spanked, particularly. Sorry, just the imagery of the oil and gas industry getting spanked.
00:17:29
Speaker
by the COVID guy from Alberta. Murray Edwards and the COVID guy just having a time. With an oil pricing war going on between the Saudis, they put an apostrophe in Saudis for some reason. In Russia, the COVID virus went global.
00:17:53
Speaker
Are they blaming the COVID virus on the price war? Yeah, that's what it sounds like. Those are objective facts, but that sentence is incomprehensible, but you keep going. The concept of cause and effect might be lost on these folks. Yeah, they should have said while, not with. While in the oil empire's war was going on between the Saudis and Russia, the COVID virus went global, right? Correlation is not causation, right?
00:18:23
Speaker
This led to oil prices hitting the lowest they've ever been on record, according to the government of Alberta. Holy shit, these guys need a copy editor. Where's the comma between record and according? And also trusted source government of Alberta. Desperately needing liquidity, the oil and gas industry appealed to the feds for some sort of support to help get them through the pandemic and oil crisis.
00:18:52
Speaker
That sounds like a subsidy to me, but. Yeah, they asked for $30 billion in subsidies back in April, but they're not subsidized. That was just, that doesn't count as a handout. Yeah, no, that's a, it's a gift. It seemed like a no brainer that the feds would be willing to lend a hand to one of Canada's largest money makers. Money maker is spelled as one word, like it's talking about shaking your money maker.
00:19:21
Speaker
However, it took a long time and a lot of prodding to get any of that assistance that isn't a subsidy. Despite this new report's claims that the industry received $18 billion in support, what the industry ended up with for direct support was a $1.7 billion pledge to help clean up old and abandoned wells in money for clean tech.
00:19:48
Speaker
However, much of this money still has not been tendered to companies. And as a result, much of the expected job creation has not occurred. Right. That's why there's been no job creation. And that's also not on the federal government that the program implementation was on. That's the government of Alberta. Yeah. Yeah. They gave the money to the provinces and the provinces had to figure it out. Right. Yeah.
00:20:13
Speaker
And just to go back a little bit to the pandemic assistance, does your study like count the money, like the cues, like the Canadian emergency wage subsidy and the various kind of like COVID subsidies that it went out, is that included in your $18 billion total or no?
00:20:29
Speaker
Yeah, the various COVID programs are so so like they said the 1.7 billion is in there, the 750 million for methane that was part of a COVID support package. Like, I don't know why it was because methane has nothing to do with it but
00:20:44
Speaker
That's also in there, the $380 million for New Finland's, that was COVID support for New Finland's offshore. And the business credit availability program. So that was the big thing that the industry was asking for from the government and they got. So we were able to calculate a couple hundred million dollars from that program, but again, that was looking at quarterly reviews that wasn't
00:21:09
Speaker
that there was just no transparency on how much money was given through the Business Credit Availability Program that both Business Development Bank of Canada and Export Development Canada were part of. And that money, like there was less investment happening in 2020, so we're actually expecting to see way higher numbers in 2021 through both of those credit availability programs. But they've just ignored all the access to credit that was given to the oil and gas sector in 2020 in this rebuttal.
Canada's Global Ranking in Fossil Fuel Subsidies
00:21:37
Speaker
But you didn't go through the cues, the Canadian Emergency Wage Subsidy disclosures and count up all of the money that CNRL and Suncorp got from the federal government for those programs, right? Based on what you're saying. No, we did include...
00:21:54
Speaker
We did include some money from SEWS from the wage subsidy. Some subsidies are way more egregious, like policing of pipelines, and some are less egregious. We were trying to look at all the ways that the government supports oil and gas, and most of those were targeted programs. SEWS obviously isn't targeted.
00:22:16
Speaker
it makes sense that oil and gas also can achieve to access SUSE. But what we were, why we were including that, and there's no transparency though, so that was just like CAP back in June said they thought that oil and gas companies had received about 300.
00:22:32
Speaker
from the wage subsidy, but there are only, our only point in including that was to contrast it with dividends. So we know that Imperial got something like 120 million through sues and paid out 300 million over that in dividends. So that like that juxtaposition, you're getting government support and you're paying it to your shareholders. Dividends that David dividends that Jack Mintz would have reaped a nice mint off of. Okay. I'm sorry. I interrupt you, Jeremy. Get back into it.
00:23:03
Speaker
Jackman's, by the way, is, from my understanding, the only economist to have ever lived, right? That's what I gather from conservative party communications. Anyways, it's no secret that these types of reports hyperinflate the numbers to create a narrative of capital B, capital G, big government, working for capital B, capital low, big oil.
00:23:32
Speaker
These types of reports have been called out before and many think tanks like the Montreal Economic Institute believe are overstretching the meaning of subsidy. I think that's a bit of a... It's missing a word. Yeah, it's missing they. Well, we know what these people think about gender neutral pronouns.
00:24:00
Speaker
But yeah, also Montreal Economic Institute. Now I'm a founding member of the Big Shiny Takes Institute. So I know the think tank field pretty well from the inside and did some, I looked into this Montreal Economic Institute, just founded by a guy named Michel Calignon. And this guy,
00:24:28
Speaker
after founding the Montreal Economic Institute became the president of the Quebec Employers Council.
00:24:40
Speaker
where he changed an operational deficit of 110 grand the year before into 205 grand surplus. So good for him. He obviously knows what he's doing for employers. Right. You know, we know, we know who side he's on.
00:25:02
Speaker
While still considered a quote-unquote subsidy, they are just a particular tax treatment that is common to the natural research sector and many other sectors as well. So it's not subsidy, right? Yeah. It's a subsidy, but it's a subsidy that a lot of other places do. I mean, that's basically define subsidy and say it's not a subsidy is what they just did.
00:25:26
Speaker
And just for a quick interjection here, Julia, how does Canada compare to other countries in the amount of subsidies we give out?
00:25:36
Speaker
Yeah, we do pretty poorly. We're the worst in the G7 for subsidies in relation, obviously, to the size of our economy. By poorly, you mean best. We're the best at giving out subsidies to oil and gas companies. We are the best at handing out taxpayer money to oil and gas companies, yes. We're the worst in the G20 in the per capita basis, but second worst in public financing, specifically public financing. We're the worst in the G20.
00:26:06
Speaker
Second worst absolute. Worst on the per capita, but we rank badly, even in an absolute way. And we ranked worst recently on a scorecard in terms of making progress on phasing supports out.
00:26:22
Speaker
So not great. Yeah, not great, Bob. Keep going, Johnny. Developing natural resources is a financially intensive process, and these measures level the playing field across the sector to ensure they remain competitive. So it seems like he's saying, yeah, these are subsidies, but they're good.
00:26:41
Speaker
Yeah, like we need to level the playing field for oil and gas, who have only received six decades of supports and have a whole system that's catered to them. But yes, we need to level the playing field for them. Yeah, it's been stacked against them for far too long, in my opinion.
00:27:00
Speaker
Many
Clean Tech Subsidies: Are They True Subsidies?
00:27:01
Speaker
of the quote unquote subsidies, but now he's using scare quotes. So again, someone get these guys a copy editor. In this report are actually clean tech subsidies being used to reduce emissions in increased energy efficiency. Those are still subsidies.
00:27:21
Speaker
Yeah, exactly. The government loves this line. Like if we pay companies to reduce their emissions, it's not a subsidy, but do they not understand, like you're giving money to these companies and therefore they can reduce their costs and use that money that they've saved either to make their CEOs richer or just to cover other costs. Like how, I don't understand, but Minister Wilkinson is constantly seeing this line.
00:27:46
Speaker
Well, and what they're talking about when it comes to clean tech or technology that's used to reduce emissions is by and large like methane reduction technology. And like methane reduction technology is technology that stops natural gas, a product that is worth money from escaping into the atmosphere where you cannot sell it. It is like you are literally paying them to make more money to stop them from polluting the fucking atmosphere with stuff that is their own product.
00:28:16
Speaker
It is incredible. But anyways, keep going, Jared. Cost money to make money, Duncan. Okay, I said that right. Yeah, no, this sentence is great. At the end of the day, if they cared about the environment and not an ideological bend against oil and gas, I do not know what an ideological bend is. I know what an ideological bend is.
00:28:41
Speaker
Activists would be praising this. In fact, if you do not include the money for cleaning up old wells, clean tech subsidies still make up one third of direct support. Not a subsidy. This report also includes things like the $10 billion in bond purchasing through the Bank of Canada corporate bond purchase program, as well as support from the expert development bank as a subsidy for the oil and gas industry.
00:29:10
Speaker
However, these programs are available to all sectors of the of Canada's economy, not just the oil and gas industry. Now, Julia, do you suggest otherwise in your research?
00:29:23
Speaker
Well, first, we actually don't include the $10 billion bond purchasing program. So we have our $18 billion number. And then we have another over $15 billion. That's not part of the $18 billion. And the $15 billion is other supports, other spending that without serious green strings could go to oil and gas. But it's not included in the total. So there was a $10 billion bond purchasing program.
00:29:48
Speaker
oil and gas was set to receive a quarter of that. Having our central bank buy corporate debt is a form of support to the oil and gas sector, for sure.
00:30:04
Speaker
Export Development Canada, I mean, they on average give $14 billion to both domestic and international oil and gas companies. That's a huge amount of public financing. I know that the oil and gas industry would rather pretend that that isn't happening, but it is.
00:30:22
Speaker
It's just not subsidy. It's not. But we don't actually in our report, we are clear about what the subsidy and what's and what's the support because subsidy is like a technical worm and support is a little broader. We just kind of want to get.
00:30:38
Speaker
And so we do make it clear, public financing is not a subsidy. It's a type of financial support. But we also want to get past this nitpicky, what's a technical subsidy? What's a technical support? And look at all the ways that the federal government is putting money into bolstering the oil and gas sector.
00:30:53
Speaker
Right. So it's two separate, I guess you could say pockets of money or envelopes of cash that this fellow at the Canadian Energy News Network, this low budget Canadian Energy Centre is collapsing into one. Okay.
00:31:13
Speaker
Just for comparison, in 2020, the EDC helped support the oil and gas industry with about $8 billion in export-based credit insurance and financial support. The finance industry, Capital F, received more than double that at almost $21 billion. All of this is to help develop Canada's economy and trade.
00:31:38
Speaker
Yeah, of course, export development Canada gives money to sectors that aren't the oil and gas sector. I mean, that makes sense, but other sectors aren't bringing our planet to the brink of an existential crisis. I just wanted to explain the discrepancy in the numbers around export development Canada, because they have their corporate program that gave around $8 billion.
00:32:01
Speaker
But they also have this kind of shady Canada account, which is administered by the Crown Corporation. But decision making actually happens in federal cabinet. And that's where all the money for Trans Mountain pipeline and expansion come from. So we just talk about that all in terms of Export Development Canada, because they administer all of that public financing. But the decision making is a little bit separate. So that's why in this
00:32:28
Speaker
in this, in this newsletter, they talk about 8 billion. They're ignoring the Canada account in that number. Consequently, why don't you just skip to the like third, last paragraph or something? Jeremy, he kind of goes on about the expert for a while. These type of activists report
00:32:49
Speaker
usually shy away from writing about how much money goes to quote-unquote green or environmental spending. A policy brief from the International Institute for Sustainable Development notes that Canada announced almost 15 billion in financial support for quote-unquote green initiatives in 2020.
00:33:09
Speaker
This report also confirms the $15 billion number. That's almost 800% more than the $1.7 billion support announced for well cleanup. Yeah. Well, $15 billion is still less than $18 billion, but the $15 billion for the climate plan is also over 10 years. Whereas the $18 billion is for one year.
00:33:32
Speaker
Is for mostly for one year, there will be some, some of the funds will continue to be given out this year as well, but mostly one. So two years max. Exactly. Not 10. All told, there's a lot to criticize in this analysis. The bulk of their $18 billion argument is premised on $13.5 billion in export credit insurance and financing from an organization that does not even get its money from the government.
00:34:03
Speaker
The more accurate number for support could be the 3.6 billion in direct spending, most of which is dedicated to the environment in clean touch.
00:34:14
Speaker
One thing is for certain, when put into perspective is a small drop in the bucket compared to the capital G government spending on COVID, which is well over 240 billion. Now, is this author suggesting that we should spend less on COVID and more on oil and gas? But don't call it a subsidy. Right. It's just spending.
00:34:44
Speaker
It's like if I go out to the convenience store and buy a pack of drool pods, I'm not subsidizing myself. I'm not subsidizing my nicotine addiction. I'm just spending money. You're just spending money, yes. We should just spend all of our COVID support on the oil and gas sector.
Brett Wilson's Oil Industry Involvement and Orphan Wells
00:35:10
Speaker
Just an incredibly sharp take from our friends at the Canadian Energy News Network and very grateful that Jeremy was able to read that out for us. I got one last question for you, Julia, before we move on to Jeremy's piece. How much money did the federal government spend on cleaning the mess left behind by the oil industry? How much went to oil and gas cleanup?
00:35:37
Speaker
Yeah, in terms of the active well fund, that was 1.7 billion. So 200 million of that was a loan to the Orphan Well Association. One billion was for inactive wells in Alberta and the rest for, between BC and Saskatchewan, a couple hundred million for each of those provinces.
00:35:58
Speaker
So the Orphan Well Association, you know, Jeremy, you recently wrote a long-form piece for us that featured the Orphan Well Association, specifically its relationship to everyone's least favorite kind of statement shirt wearer and quasi-famous rich guy, Brett Wilson. And... Land through piss, Brett Wilson.
00:36:23
Speaker
He's a philanthropy. He likes to give back to the community and sometimes that takes the form of environmental liabilities. He is incredibly generous, not only to his preferred charities, but also in dropping Orphan Wells on the Orphan Well Association. And that was the substance of your piece, right? It was how much
00:36:44
Speaker
Orphan well, how many orphan wells he was able to drop on us. But before we get into that, give us a little pricey of Brett Wilson. Who is this guy? Why is he so famous?
00:36:55
Speaker
Just how unhinged is his Twitter presence and the things he says online? Well, it's very unhinged. In fact, I'm pretty sure that's how I know him. I've watched Dragon's Den before. I think it's good, mindless entertainment. But I'd never seen the guy on there.
00:37:16
Speaker
He may have come to my attention with his all-timer tweet about how we need to execute environmentalists for treason and someone was like, whoa, are you advocating violence against your political opponents? And he was like, well, yeah, what do you suggest we do with these treasonous bastards? That's nice. Yeah, no, he is very normal.
00:37:42
Speaker
Yeah, you sort of gain this reputation as this community loving philanthropist He actually lives in my neighborhood in like the nice part of my neighborhood not the part I live in Though it's just you're down on 17th and he's up the hill, right? Yeah. Yeah, and I mean I go for walks in that part of town I don't know exactly which house is it is his but he hosts these garden parties where he gets all these
00:38:09
Speaker
You know celebrities and like conservative politicians to come and raise money for various charities. I think most recently it was for like addictions and mental health charities.
00:38:26
Speaker
And so on the one hand, he has this reputation as this generous philanthropist. He's also part owner of the Nashville Predators hockey team. And of course, he was on Dragon's Den.
00:38:46
Speaker
But he's also an extreme right-wing shit-poster beyond the talking about murdering environmentalists, which none of his right-wing supporters seem to care much about. He said some racist stuff about the mayor of Calgary, a guy by the name of Nahid Nenshi,
00:39:10
Speaker
who told me recently on the Forgotten Corner podcast, I also co-host, that he used to be friends with Brett Wilson and he doesn't know what happened to him except for speculating that there were some mental health issues there.
00:39:26
Speaker
But beyond that, he's also a bit of a, I guess you could say, corporate welfare queen. Well, he took over a faltering oil and gas company called Forant in, I believe it was 2010.
00:39:51
Speaker
Yeah. Yeah. And basically he he was this big get for them, right? He's a big name. You know, it's lots of assets. He's a wealthy guy, multi-millionaire. And then he pursued some risky strategies that are probably beyond the scope of this discussion. But basically the company went into the ground by the time it went broke. It was trading at two cents a share.
00:40:21
Speaker
And it went bankrupt in 2017. Now, typically when a company goes bankrupt, they sell off all their remaining assets to then raise money to pay off their creditors to the extent that they're able to. But
00:40:43
Speaker
After going bankrupt, the Alberta Exchange Commission issued a cease trade order against foreign because they didn't
00:40:54
Speaker
provide their audited financial statements for their last year of existence, 2016. But if you go to some newspaper archives, there were a few sales they made in their final year of existence when they likely knew that the writing was on the wall and they were just selling things off.
00:41:19
Speaker
But they didn't provide their financial statements. And sitting on the audit committee of foreign energy, in addition to its board of directors, was Brett Wilson. And also at the end of 2017, I believe, or maybe it was in 2018,
00:41:46
Speaker
But around that time, the Alberta Energy Regulator issued a cease trade order against foreign energy for sorry, not cease trade. They issued a environmental protection order against foreign energy for 16 wells that it had left behind. There were essentially 31
00:42:15
Speaker
active wells when they went bankrupt, 25 of which needed to be cleaned up, and of those 16 were designated orphan wells. The rest were
00:42:31
Speaker
presumably sold to other oil and gas companies who are looking to beef up their portfolio. Wilson and Co. didn't abide by this environmental protection order, so the 16 wells were sent to the Orphan Well Association for decommissioning and reclamation. Now, at this point,
00:42:59
Speaker
nine of these wells have been decommissioned, and so seven of them
00:43:06
Speaker
remain to be decommissioned and then reclaimed. The other nine are just waiting to be reclaimed. Jeremy, you actually managed to track down someone who had one of Brett Wilson's orphans on their land. Right. What did that person have to say? One of that seven. He was not too pleased. He described it as a pain in the ass. Those are his words. He said that because he's rancher.
00:43:37
Speaker
Um, and he said that, I mean, cows are always like bumping into it and like, it just sits there. Um, the fence is broken. Yeah, yeah. Yeah. And I mean, he isn't particularly concerned about the environmental aspect of it that it could leak, but this is always a risk with orphan wells, right? That's why they're,
00:44:05
Speaker
particularly urgent liability. And the health risks as well, which, you know, aren't visible on a year to year basis, but there are huge health implications from these that he just might not be aware of yet.
00:44:20
Speaker
Yeah, exactly. The long-term impacts are a lot worse than this rancher's inconvenience. But at the same time, this is something that could easily be solved if a multimillionaire like Brett Wilson would pony up the cash to pay for these wells reclamation. Now, it's worth noting in theory
00:44:44
Speaker
the Orphan Well Association is funded by industry. So they pull money together through like deposits and whatnot. And then that goes to clean up orphan wells. But since 2018, the bulk of its funding has come from government, right? So it is being largely publicly subsidized.
00:45:11
Speaker
And the amount of orphan wells under its aegis keeps increasing. And so in the grand scheme of things, 16 orphan wells isn't
00:45:31
Speaker
huge, right? There are other companies with a hell of a lot more liabilities, but it is interesting how a fellow like Brett Wilson, who's always tweeting about how the carbon tax and Trudeau were trying to destroy Alberta's oil and gas industry. No, no, no, no. Justin Trudeau is personally murdering the oil and gas industry as part of a wider conspiracy, not only against Brett Wilson, but also all of his friends. Yeah.
00:45:57
Speaker
Yeah, the Transnational Progressive Movement with George Soros and Mike Bloomberg and the Rockefellers, of course. But it is Justin Trudeau who is subsidizing his orphan well cleanup. And I didn't mention this in the story.
00:46:21
Speaker
But when Trudeau announced the recent aid towards orphaned well cleanup, I think it was what, $200 million? Heather McPherson, the NDP MP from Edmonton Strathcona, who is the only non-conservative federal
00:46:45
Speaker
elected official in Alberta wrote him a letter telling him that he needs to have strings attached so you know people just don't dump their orphan wells on the public and he didn't do that which is weird thing to do for a guy who's like set out to like destroy the oil and gas industry but
00:47:12
Speaker
But here we are. Brett Wilson's Orphan Wells are interesting for a couple of reasons. One, he's this prominent famous person who just has an unhinged online presence. So it's very easy to just clap back with him whenever he says anything. Like, well, what about your Orphan Wells, buddy?
00:47:30
Speaker
But it's also an example of just how oil and gas executives and the people who are reaping the profit from the oil and gas industry simply are not facing any of the consequences of their actions, of their failure to run companies that turn a profit, that are able to pay the AER the money that they, the very small amounts of money they ask for in order to clean up what's left behind.
00:48:00
Speaker
And this is why it's so troubling that the federal government throws $200 million at the Orphan Well Association and they call it a loan. I think it's extremely unlikely that any of these loans are ever paid back by the Orphan Well Association.
00:48:17
Speaker
considering it's not a money-making enterprise. You read any of the copy on the Orphan Well Association website and it's industry funded. They cannot go two sentences without saying that it's industry funded. It is not industry funded. In 2020 and in 2018, majority of their funding came from various levels of government. This is extremely likely to happen again in 2021.
00:48:42
Speaker
uh, just based on, you know, the three and nearly four months that we've got in the can so far. So,
Accountability for Environmental Liabilities
00:48:48
Speaker
you know, Julia, you know, you've classified this $200 million as like a direct subsidy, right? Yeah. And so, so Justin Trudeau is essentially paying to clean up, you know, not just Brett Wilson's orphan wells, but all of these orphan wells as opposed to industry, right? And this is, this is essentially a subsidy.
00:49:10
Speaker
Yeah, this is totally a subsidy. Like what you just said, that $200 million is not getting paid back. The $200 million the feds gave a couple years ago didn't get paid back. The couple hundred million that they'll bear the government paid didn't get paid back.
00:49:26
Speaker
And so, yeah, it's it's another in another, you know, item to add the long list of subsidies that the oil and gas industry is receiving. And just because like Brett Wilson is this like famous rich guy who hates Justin Trudeau doesn't mean that he won't take Justin Trudeau's money when it comes to cleaning up the mess that his bankrupt companies leave behind. Right. And that was that was the kind of the conclusion of your story. Right.
00:49:54
Speaker
Yeah. Yeah, it's that. And the rancher I spoke with, Paul Doolidge, mentioned in the story that when I think I was quite perceptive, that how do you think rich people get ahead, right? They don't
00:50:15
Speaker
pay for everything that they're supposed to do. They get handouts for the government. And I think it's also worth noting that Brett Wilson was also shrieking on Twitter about how Serb
00:50:29
Speaker
the emergency response benefit for workers who were laid off due to COVID is disincentivizing people from going back to work. But the government subsidies to oil and gas seem to me to disincentivize these companies clean up their own mess. Would you agree with that, Julia?
00:50:52
Speaker
Yeah, the irony in a statement like that. This is 1.7 billion, 200 million to orphan, a billion to inactive. It's such a problem because we're looking at a magnitude of $260 billion, if you look at all of the unfunded environmental liabilities in the oil patch. And what it does when we give
00:51:19
Speaker
when we give these subsidies is it tells these companies that they will not be held accountable. But the public can't afford to take up that $260 billion cost of cleanup.
00:51:34
Speaker
In Alberta law, the oil and gas companies are responsible each year to put enough money into that orphan well association to pay for that year's costs. And we just have never held them to account. I like zeroing in on the stories because all of these orphan wells have stories like that of corrupt companies selling off their
00:51:59
Speaker
pretty much useless wells to companies that go bankrupt. And that's how we got to this problem of a $260 billion cleanup tab. Yeah. So Jeremy, did Brett Wilson face any consequences for any of those numerous kind of things that he did? Oh, yeah. He's in prison now.
00:52:24
Speaker
He was arrested last night in a raid on his Mount Royal compound. No, of course not. There are never consequences for people with a certain income. And yeah, because again, they're Nigel Banks, a law professor at the UFC told me that there is a mechanism
00:52:50
Speaker
by which the energy regulator can prohibit individual executives from oil and gas companies that aren't abiding by their orders from holding licenses either directly or indirectly. Again, they didn't do that for Brett Wilson. They say that they only do it in the most egregious cases.
00:53:20
Speaker
And also, the protection order was issued after they went bankrupt. So technically, there are no individual executives for them to hold to account because they're no longer executives, which is pretty silly. Pretty silly argument, to be honest. Yeah, what executives? What are you talking about? There's no foreign energy.
00:53:44
Speaker
So Jeremy, what should people do after they read this piece? You should send it to W. Brett Wilson because he wouldn't respond to my request for comment. I mean, can you blame the guy? I mean, yes, you can, and I do. I will never forget that.
00:54:04
Speaker
But yeah, no, send it to him, tweet it at him. He could be tweeting about whatever, how COVID isn't a big deal or that Donald Trump was a great man. Treat it unfairly. Treat it very unfairly. Very unfairly. No one's been treated more unfairly.
00:54:26
Speaker
yeah just break in there yeah just go just just you know go ham just uh you know forget what what he's talking about like just hammer him with the fact that he and i mean that's really kind of why i wrote this piece because whenever he um
00:54:43
Speaker
like tweets anything people will be in their bodies being like what about your orphan wells fucko and I figured this would be a valuable resource for them because this is again something that everyone knows I think I somewhat incorrectly called it an open secret
00:54:59
Speaker
on Twitter, which isn't quite accurate because press progress did mention his ownership in for it in the story where that was just sort of something they mentioned in passing. So it has been out there, but it hasn't been looked at in depth. And that's essentially why I wrote the story. So please, dear listener, use it.
00:55:25
Speaker
Let Brett Wilson know that you know what he's doing and you're onto him. And we will have the link to the article in the show notes. I think that's a fantastic place to leave the pod. Why don't we
Conclusion and Call to Action
00:55:40
Speaker
take a minute for folks to plug their pluggables, tell everyone who's listening how they can find you on the internet, follow along and support your work. Julia, why don't you go first?
00:55:50
Speaker
Yeah. Folks want to find out more about this report or environmental defenses work. They can find us on Twitter or Instagram at enviro defense. Cool. And Jeremy.
00:56:03
Speaker
Uh, this one's pretty long. So in addition to, uh, doing investigative reporting for progress Alberta, my, uh, main job is the, uh, Calgary municipal politics reporter at sprawl Calgary. Um, so if you live in Calgary or if you don't, and are for some reason interested in.
00:56:23
Speaker
Calgary City Hall. Check out my work at sprawlcalgary.com. I also have a newsletter that comes out every two weeks on the latest developments at City Hall called City Hall Sprawl, the link to which you can find on Sprawl's website.
00:56:41
Speaker
I also am the proud co-host of not one, but two podcasts on the Harbinger Media Network, which I think your listeners may be somewhat familiar with. The first being Big Shiny Takes, as Duncan mentioned earlier, where we take a satirical look at the piss poor level of punditry in this country.
00:57:08
Speaker
And then The Forgotten Corner, which is an interview show I co-host with my medicine hat news partner in crime, Scott Schmidt. And both of those are on your podcast of choice. And I also write for Jacobin. Sometimes I have a piece I'm working on for them that you'll be able to read at some point. So stay tuned for that.
00:57:36
Speaker
Fantastic. And after you're done supporting those amazing folks and following them online, one thing you can do to help us is become a monthly supporter. We are a supporter-funded project, and we literally cannot produce this product and do this work without your help. So there's a link in the show notes, but if you go to theprogressreport.ca slash patrons, you can go there, put in your credit card, 5, 10, $15 a month, whatever you can afford. We would really appreciate it.
00:58:05
Speaker
Also, if you have any notes, thoughts, comments, things you think I messed up on, things you think I need to hear, I'm very easy to reach. I'm on Twitter, at Duncan Kinney, and you can reach me by email at DuncanK at ProgressUmberto.ca. Thanks again to Jeremy and Julia for coming on the show. Thanks to Cosmic Famicominist for the amazing theme. Thank you for listening, and goodbye.