Quebec predicts it will cost $100 million to ban gas exploration and development in the province to compensate companies and plug wells already drilled, but the industry is already preparing to respond.
The Minister of Energy and Natural Resources, Jonatan Julien, formalized his intention to ban this practice, which he had already announced last year, by presenting a bill to this effect on Wednesday.
This provides for the establishment of a $100 million compensation program to buy back the permits held by the companies. Of this amount, $33 million will be used specifically to reimburse the costs incurred to have them plug their wells, which they will be legally obliged to do.
However, this is a much lower sum than what the industry expected to receive. According to the president of the Quebec Energy Association (AEQ), Éric Tétreault, reimbursing the cost of the permits would cost at least $500 million and fairly compensate the companies for their lost profits, billions of dollars.
“Some argue, it’s a bit of a homeric tale, that the potential is billions of dollars, but the bill does not intend to speculate on potential gains that have never been proven in the past. […]even during the golden age of oil and gas in Quebec,” replied Minister Jonatan Julien.
The province has 182 active licenses to be reimbursed and 62 wells to be rehabilitated. They are divided approximately equally between the Bas-Saint-Laurent valley and Eastern Quebec.
For Québec solidaire, the government should not pay a penny to businesses.
“I don’t understand why we are talking about fair compensation in the face of companies that exploit hydrocarbons, who bought their “claims” at a discount price here, in Quebec, at a time when they knew that hydrocarbons were causing global warming. that we are going through today”, protested the co-spokesperson of the party, Manon Massé.
The Parti Québécois is also opposed to any financial compensation for the industry. “It’s a great disappointment to see that we are faced with an open bar of compensation for oil companies,” lamented PQ MP Sylvain Gaudreault.
Completely opposed to the compensation program presented on Wednesday, the AEQ considers it “premature” and intends to oppose it during future consultations.
“The government is not playing by the rules of international trade,” said Éric Tétreault. He will have to readjust the shot quickly.