The Western Stock Growers’ Association urges producers to pay attention to the potential changes to Alberta’s Mature Assets Strategy (MAS), announced April 3, 2025. The MAS aims to manage the province’s aging oil and gas infrastructure. However, the strategy could result in concerning developments for rural municipalities, landholders and grazing leaseholders.
“We’re watching this, but we’re not necessarily complaining about it,” said Ryan Copithorne, president of the Western Stock Growers’ Association.
WHY IT MATTERS: The potential changes to Alberta’s MAS could have a big financial impact on Alberta’s farmers and rural municipalities.
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“There are some groups that are out and out hostile over it right now, and I’m more of the opinion that maybe there was some bad process, but we need to keep an eye on it and make sure they do the right thing. So that’s kind of our view on it,” said Copithorne, a ranch consultant who farms near Jumping Pound.
The MAS could affect property rights, weaken lease protection and result in the potential transfer of industry liabilities onto private land.
Copithorne said there are about 471,000 wells in Alberta, and two thirds of them are in decline, aging or becoming mature assets.
“The government realized that they have a problem with this, because a lot of these wells are uneconomic. There are cases in the province where oil companies are transferring the liability or trying to get out from underneath these things, because there’s a reclamation liability on them,” he said.
Copithorne said some landowners and municipalities are not getting paid, and distrust has grown between landowners, oil companies and dissatisfaction with the government over this.
“Once the government realized they had a problem, Danielle Smith engaged an industry insider, David Yager, to formulate some recommendations on how to fix this problem, and so he brought together 97 entities into working groups he created,” said Copithorne.
There were six working groups, each tackling a different topic. For example, one topic was liability; another topic was what to do with orphan wells.
Photo: File
All the groups were engaged to come up with a strategy of what to do with the mature assets in the province. The consultation was invite-only. Some of the stakeholders, like landholders and representatives from the cattle industry weren’t invited when they should have been at the table, said Copithorne.
“There were a lot of government organizations, a lot of industry organizations, but there were some noticeable gaps. The rural municipalities pointed out that cattle industry groups weren’t invited, and yet cattle producers are some of the largest landholders in the province, and they weren’t invited to participate,” he said.
The table was skewed to the oil industry and not as much to the other stakeholders. This was one of the concerns brought up by the Surface Rights Federation and the Rural Municipalities of Alberta.
“The stakeholders were allowed to participate in one or two groups, maybe up to three. At the end of the process, there was no cross pollination between these groups. If you were a landholder, representing landholders, you were only allowed to have input on one or two topics, when all six topics affect you. It was a siloed approach,” he said.
“There was an underrepresentation of landholders at the working group, and there was no public consultation on it. There might be public consultation coming. I’m not sure, but at this point, there is none,” he said.
Copithorne said the recommendations from the working groups are just that and are not policy yet.
“But as stakeholders and landholders, we’re keeping an eye on it to ensure that there is a good process before it becomes policy,” he said.
Copithorne said the recommendations do affect property rights, because some of the recommendations were designed to make mature assets more appealing for oil companies to re-stimulate activity.
Mature assets are being retired, or become delinquent or inactive, because overhead costs are too high. The overheads include taxes, fees, and regulations.
Landowners’ rights can be affected if regulations are eased in certain areas.
“There was talk about making it easier for oil companies, so they wouldn’t be abandoning these sites and trying to stimulate activity on them, which I’m in favour of. I think most people are in favour of cutting red tape. It’s a matter of making sure that the right red tape is cut, and the wrong one isn’t cut. We can’t be loosening regulations on reclamation. And we can’t be loosening the regulatory burden of liability. Those things need to be sacrosanct,” he said.
In some cases, oil companies are not using the wells because of the municipal tax burden, he said.
This was a sticking point for the municipalities, because they said the information used for these statements was inaccurate.
“They didn’t feel like there was proper data used for the analysis,” said Copithorne. Municipalities were concerned about the lowering of municipal taxes or making things more tax affordable on these mature asset wells. Municipalities are taking the hit on declining wells. The liability and expense is likely to be passed on to landholders, taxpayers and municipalities.
Right now, there are $250 million in unpaid taxes owed to municipalities on account of delinquent or unpaid municipal taxes on these mature assets.
Repurposing wells into other uses could also have an effect.
“If they can come up with innovative ideas of what they can do with some of these old oil wells, that’s fine. The problem is, as a landholder, when you switch the use, suddenly, you’re talking about a whole different set of liabilities and a whole different set of rights,” he said.
For example, if an oil company stops paying a landholder, that landholder can be protected by Section 36, which is the Surface Rights Act, said Copithorne. This act allows landholders to receive compensation if the oil company stops paying them. Orphan well funds can compensate landholders if an oil company goes delinquent or doesn’t pay.
However, if the land use is changed to something like geothermal, the new technology does not follow the same set of rules as oil companies.
“We don’t know what the liabilities are. If there’s a recommendation just to allow these licenses to transfer into different uses, like for renewable energies, what is going to be the new set of liabilities?” said Copithorne.
“We need to make sure landholders are aware of that and are part of the process,” he said.
There’s been an increase in the number of non-paying or inactive operations because of low oil and gas prices.
“When you get low oil and gas prices, a lot of these wells become uneconomic,” he said.
The oil companies want to get rid of these wells, and they sell the well to another company.
“Often that gets transferred to some insolvent company, or lost company and all of a sudden surface rights aren’t being paid,” he said.
“I think if you get into a better marketplace, I think a lot of these wells would come back into production. But we’re suffering low economics right now,” he said.
There is a lot of red tape and regulatory costs when dealing with orphan wells.
Landholders should stay informed of what is happening, because everything is just a recommendation right now.
“We applaud the government for wanting to come up with a strategy on these mature assets. It’s the right thing to do. But there were question marks from some of the stakeholders about the process, and there were some question marks about the outcomes and the way recommendations came about. We need to make sure that before these recommendations turn to policy, that they’ve addressed the concerns of stakeholders,” he said.
Copithorne said people should also stay informed about their rights under the Surface Rights Act, as well as the Expropriation Act. These acts protect landholders from government overreach.
The Alberta Surface Rights Federation, the Rural Municipalities of Alberta and cattle industry groups such as Western Stock Growers’ Association are now following the mature assets strategy and making sure their views are being represented.
“I would encourage people to be careful of the repurposing aspect of these recommendations,” said Copithorne.
Landholders will need to be part of the process if that happens, he said.
If a landholder has oil and gas activity and mature assets on their property, they should document everything that happens, including payments, and activity in case they must make a claim.
“We also encourage liability funds or polluter pays principles, so if oil and gas companies are going to drill new wells or build new activity, then they’ve got funds set aside in case things go wrong,” he said.
Copithorne said landholders should keep a vigilant eye on the erosion of property rights.
