An Alberta First Nation has filed a proposal for Imperial Oil shareholders to make the company disclose the potential impact of the energy transition on its operations and more specifically its obligations regarding the retirement of assets once they stop producing.
The proposal aims to force Imperial Oil to report the expected effect of different transition scenarios on the long-term future of its assets and their retirement, including reclamation activities-and their costs.
The event that prompted the proposal, made on behalf of one individual investor in the company, was the leakage of wastewater from an Imperial oil sands mine, in Kearl, in 2022 and 2023. At the time, local First Nation communities claimed that Imperial had known about the leaks long before it reported them.
These leaks and the way Imperial Oil handled them "raise serious questions about Imperial's ability to manage the risk of long-liability assets like tailings ponds as well as its commitment to transparency," the Athabasca Chipewyan First Nation said in the proposal, to be put to the shareholder vote at the company's shareholders' meeting later today.
"Calculating asset retirement obligations as per the resolution presented would produce a set of arbitrary, uncertain and hypothetical views of the future rather than the thoughtful, fact-based approach used to produce asset retirement obligation estimates that are aligned with legal and regulatory requirements," Imperial Oil said in response to the proposal.
However, the First Nation that submitted it sees it as a new weapon against the oil industry, to be wielded again.
"This puts all of the oil-sands players on notice," Chief Allan Adam told Bloomberg. "This is the start of a new way of raising concerns. It's a new way of doing things." He added that First Nations needed guarantees that oil producers would pay for cleanup "when the crude they produce is no longer in demand," per Bloomberg.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
U.S. Power and NatGas Prices Plummet to Below Zero
Ukrainian Drones Hit Major Rosneft Refinery in Russia
First Niger Oil Bound for China Blocked in West Africa Border Row
Gas Prices Likely to Keep Falling Ahead of Peak Driving Season
Drone Attacks Take Khor Mor Gas Field Offline, Claims Lives