EDMONTON - An environmental think-tank says Alberta taxpayers could have to pay billions of dollars in oilsands cleanup costs because of inadequate government regulation.

A Pembina Institute report suggests current financial guarantees that energy companies must make as a last resort for cleaning up the oilsands could amount to as little as one-twentieth of the real cost. In the worst-case scenario, that could leave a liability of up to $6,300 per taxpayer.

"The true cost of cleanup is being under-reported and hidden from Albertans," Simon Dyer, one of the report's co-authors, said Tuesday.

Operators are required to post letters of credit or other sureties to ensure there's money for reclamation of oilsands sites in case the companies are either unwilling or unable to pay. They estimate the required amount themselves.

"There's no publicly available information as to how the Alberta government validates that," said Dyer. "There's no third-party assessment of that."

The Pembina report found that the industry has a total of about $820 million in such guarantees for remediation. That's supposed to cover about 69,000 hectares of disturbed land, averaging about $12,000 a hectare.

But based on costs already incurred by some remediation projects, true cleanup costs are much higher, the report says. The institute estimates it could cost at least $220,000 a hectare and perhaps as high as $320,000 a hectare.

The government doesn't require companies to include the cost of dismantling and reclaiming oilsands facilities. Also not included is the long-term cost of managing and monitoring so-called "end-pit lakes" — the remains of toxic tailings ponds that are capped with fresh water.

Alberta Environment spokesman Chris Bourdeau said the government is working to increase the environmental financial backstop for the oilsands.

"We've been very open about needing to improve the program," Bourdeau said.

Talks between government and industry have been going on for years, he said.

"We would like to have it move more quickly. We're getting close to the point where we can move fairly soon."

Dyer acknowledges that many oilsands operators are among the largest and wealthiest companies on Earth and are unlikely to go under any time soon.

But he points out that some operators are not publicly traded and others are limited liability partnerships or national subsidiaries of multinational corporations.

"It's not clear that companies wouldn't be able to dispose of those assets if they needed to," Dyer said. "The track record of the mining industry in Canada shows that problems with unfunded mining reclamation are severe."

Greg Stringham of the Canadian Association of Petroleum Producers said reclamation is an ongoing part of oilsands work. Operators must obtain a reclamation certificate from the government before they can extinguish their environmental liability for their lease.

He points out that the environmental guarantees are in addition to ongoing reclamation budgets, as well as the value of the company and value of assets on the ground.

"We believe that with those things in place, that there is a very strong protection that this liability will be taken care of."

Stringham said 65 square kilometres are on the verge of receiving reclamation certificates.

Some companies are also conducting field experiments on reclaiming wetlands. Others have developed new processes to speed up the reclamation of tailings ponds.

Tom Schneider, a professor at the University of Alberta school of business, agrees that the oilsands environmental liability is undersecured.

"I am definitely quite confident that (the liability) is way more than has been set aside today," said Schneider, whose research specializes in accounting for such liabilities.

He also agrees that the government should reveal much more about the way in which it decides how much each company needs to put up.

But he added the chances of an oilsands operator actually going bankrupt or walking away from its obligations are low.

"There are a lot of big companies up here there," he said. "They have deep pockets."

Schneider said there's actually more risk to investors from under-reported environmental liabilities than to the public.

He pointed out that international changes in accounting rules are coming that will force companies to be more thorough in reporting how much it will cost to clean up after themselves.

Concerns over unfunded environmental liabilities aren't new.

The Pembina report points out that Alberta's auditor general has warned the government about oilsands reclamation costs in four different reports, most recently last October.