The Government of Alberta’s recently released Mature Asset Strategy (MAS).

The Mature Asset Strategy report was released after months of consultation with industry, municipal leaders and landowners. The report recommends new ways to address inactive and marginal wells, and develops new tools for companies to set aside enough money to pay for future well site cleanup. 

The key recommendations will:
• Ensure municipal taxes get paid
• Ensure landowner leases get paid
• Support the polluter pay principle
• Accelerate closure of non-commercial wellsites
• Optimize revenues from existing wellsites
• Create new financial tools for closure liabilities
• Prevent insolvent operators from staying in business.

The Rural Municipalities of Alberta (RMA) has expressed disappointment regarding the Government of Alberta's recently released Mature Asset Strategy (MAS).

The report lacks necessary justification and clarity, presenting recommendations that prioritize reduced industry liabilities and regulatory burdens while failing to address essential issues such as tax obligations, surface lease payments, and liability responsibilities.

"RMA endorses a strategy aimed at sustaining the oil and gas industry, provided it also considers the potential risks and consequences for other stakeholders. Regrettably, the process behind the Mature Asset Strategy and its final recommendations show a limited focus on enhancing profitability for companies and wells at the expense of other stakeholders, without ensuring accountability from the industry or taking into account its broader impacts," remarked Kara Westerlund, RMA President. During the MAS process, RMA objected to unsupported claims regarding municipal property taxes, including the assertion that they are a major obstacle to the viability of mature assets. The final report does not propose amendments to the property tax system, indicating that some of our concerns were acknowledged and our efforts to realign the discussion around municipal financial realities were somewhat effective. Nevertheless, the report perpetuates the unfounded assertion that taxes impose a disproportionate burden on the industry, with no substantiating evidence.

The only property tax-related suggestion—establishing a reporting system for unpaid taxes—merely duplicates an existing system. "Property taxes became a major contentious issue throughout the MAS discussions. From the outset, we were told that taxes needed to be reduced and that municipalities should bear the burden.

Instead of proposing feasible solutions to assist the industry, we spent considerable time and effort debunking misconceptions about the role and usage of property taxes," explained Westerlund. "In a process addressing assets significantly affected by low commodity prices, declining production, and substantial regulatory gaps in asset transfers, the fixation on property taxes seemed misplaced. It appears that the organizers viewed taxes as a convenient means to cut costs on mature assets, requiring us to consistently counter this assumption." A significant concern for RMA was the unclear definition of "mature assets" and the absence of a definitive list of affected assets or industry segments. Despite repeated requests for clarification, such information was not provided during the process. The final report equates mature assets with marginal wells, a connection that was not clarified during the stakeholder engagement. "To us, it appears the MAS served primarily as a means to alleviate regulatory and liability burdens on the industry, shifting costs onto the public under the pretense of supporting an ill-defined group of mature assets. Even with a vague definition in the final report, there is no clarity on whether any of the recommendations will tangibly support increased production or address associated public risks. The lack of scope is alarming in a report that proposes recommendations profoundly affecting industry accountability and public interest." Additionally, RMA is concerned that the MAS process did not incorporate diverse perspectives. While advocates for surface rights had limited participation, other sectors, including environmental organizations, gas cooperatives, agriculture, and groups representing the wider public interest, were almost entirely absent. This lack of diversity has resulted in a report filled with industry-supported recommendations that remain untested for their broader public risks or impacts. RMA advocates for a strategy that bolsters the oil and gas sector while ensuring equitable consideration for all Albertans. However, as it stands, the MAS process fails to lay the groundwork for meaningful, inclusive, and sustainable solutions. "Ultimately, the MAS process resembled an industry echo chamber, lacking voices that could challenge assumptions and critically assess proposals. While RMA values its participation and strives to fulfill this role, we weren't present at every forum, and our expertise primarily focuses on municipal matters. This report reflects that imbalance," noted Westerlund. "An adequately developed strategy that includes input from a wide range of stakeholders and the public could benefit the industry, rural municipalities, and all Albertans. The MAS is not the appropriate method for achieving such a comprehensive strategy." About the Rural Municipalities of Alberta: The Rural Municipalities of Alberta (RMA) is a reputable and independent association representing Alberta's 69 counties and municipal districts. Since 1909, RMA has been dedicated to empowering rural municipalities through strong, effective local governance.

Through persistent advocacy and a range of valued business services, including cooperative procurement and group benefits via the Canoe Procurement Group of Canada, as well as comprehensive insurance coverage through RMA Insurance, we aim to bolster and support rural Alberta.
Danielle Smith
Editted