Grainswest - Fall 2025

Fall 2025 Grains West 14 THE FARMGATE MatureAssetStrategyrethink Energy lease consultations raise rural concerns IN ALBERTA, MATURE OIL AND gas fields and wells continue to be abandoned at record speed. Often called mature assets, they continually look more and more like liabilities for many farmers. When an operator abandons a site, municipal taxes and surface leases go unpaid, which can be financially damaging for rural communities and landowners. To tackle the issue, the provincial gov- ernment recently held consultations on its Mature Asset Strategy (MAS) report published April 3. The meetings aimed to gather feedback from affected parties and forge a plan to deal with these defunct assets. Among those in attendance were petrochemical and green energy corpo- rate stakeholders. The sessions produced 21 recommen- dations the government views as sup- portive of economic growth and stability. Agriculture groups and municipalities, on the other hand, fear changes to the strategy may further burden landowners with site reclamation costs. OUTFOXED? “These consultations were like the fox designing the henhouse,” said Paul McLauchlin, reeve of Ponoka County and past president of the Rural Municipali- ties of Alberta. “We tried to discuss core issues of reclamation and unpaid surface leases and taxes, but the government had already chosen to preserve the status quo in favour of oil and gas operators.” That status quo, according to McLauchlin, includes operators being allowed to abandon old wells with no repercussions, and even to establish new ones. Wells are often installed on farm- land in exchange for monthly payments to the landowner. When operators fail to make payments, farmers and municipali- ties lose out. “I have neighbours who haven’t been paid on their surface leases for eight years,” said McLaughlin. “Last year, the government paid about $30 million to landowners for lost lease revenue, but the total outstanding environmental liabilities are about $30 billion across the province. Maybe they’ll get around to me in three decades, but how does that help when I’m six feet under?” As McLauchlin sees it, the problem is twofold. By not pursuing former opera- tors for delinquent lease payments, the government forces taxpayers to foot the bill. Meanwhile, abandoned wells tie up arable land. The issue of who will bear those consequences is top of mind for farm groups. WHEN THE SHIFT HITS THE FAN “We are worried about the possible shifting of responsibility from lessees of the land to producers,” said Shannon Sereda, director, government relations, policy and markets for Alberta Grains. “Apart from missed lease payments, there are the issues of liability for that land and equipment, as well as reclamation costs. It’s not clear from the MAS recommenda- tions whether those liabilities and costs will fall on farmers.” Another concern is what Sereda sees as a history of favourable treatment for the oil and gas sector. “When operators default on taxes and government doesn’t hold them to account, it impacts munici- palities that are already short on adequate funding from the Province,” she said. “If that inhibits the maintenance of rural roads and drainage ditches, things on which farmers rely, it’s a double whammy for farmers stuck with the old wells.” Groups such as Alberta Grains also question related discussion around repur- posing previously leased and abandoned farmland for energy uses such as lithium production and geothermal and solar energy projects. “I’m not sure landowners have been meaningfully engaged about the risks associated with these other energy sources,” said Sereda. SURFACE TENSION Some consider the MAS consultations a lost opportunity for meaningful engage- ment. “We were there with solutions, ready to work, but the outcome was a foregone conclusion,” said Bill Heidecker, president of the Alberta Surface Rights Federation and owner of Drylander Ranch in east-central Alberta. “Instead of being beneficial, the talks just harmed the relationship between industry and landowners even further.” Without that strong connection, future development may be put at risk, as farmers will be reluctant to lease out their land. “Landowners have insights and solutions, so help us help you,” said Heidecker. “Stop beating us up. If this is “Landowners have insights and solutions, so help us help you.” —Bill Heidecker