Federal government to spend $ 1.7 billion to help clean up orphaned and abandoned oil and gas wells in Alberta, Saskatchewan and British Columbia
The program aims to provide support to the energy sector and to maintain or increase jobs. The clean-up fund is expected to create 5,200 jobs in Alberta alone.
“Cleaning them up will get people back to work and help many landowners who have had these wells on their property for years but have not been able to maintain them and restore the land,” Prime Minister Justin Trudeau said, announce plans Friday.
“Our goal is to create immediate jobs in these provinces, while helping businesses avoid bankruptcy and supporting our environmental goals.
Crude oil price crash
Alberta and the oil industry have been pushing for help since the double calamity of an international price war and the drop in demand resulting from the COVID-19 pandemic caused the value of crude to plummet.
The collapse in prices left a multibillion-dollar hole in the recently passed Alberta budget and unemployment is expected to hit record levels.
“The Government of Alberta is committed to strengthening regulations to see fewer orphaned and inactive wells in the future,” Trudeau said.
The United Conservative Government of Alberta has already provided a $ 100 million loan to the Orphan Wells Association to speed up remediation work, which is expected to create 500 jobs.
The magnitude of the problem
As of March 2020, Alberta had approximately 95,000 inactive wells and 69,000 abandoned wells, according to the Alberta Energy Regulator.
Two of these wells are on Tony Bruder’s property in the Pincher Creek area. Both were drilled in the 1950s. One has not seen any activity since the 1960s, while the other has been inactive since the early 1990s.
He says Friday’s announcement is good news and he’s glad more work is being done to clean up what he calls “horrors on the ground.”
“It’s really sad that they let the companies get away with scotchless who own the wells and did the drilling. But the fact that they are actually investing money to clean them is a good thing,” Bruder said. .
“It is definitely mismanagement on the part of the government for allowing this to happen. They are the regulators, they are the ones who make the policies, regulations and rules that companies must follow.”
Premier Jason Kenney said the federal program is an “important first step” but more needs to be done to support Alberta’s largest industry.
“This funding will immediately save or create thousands of jobs, allowing energy service companies to continue operating during this devastating time,” he said in an emailed statement.
“It will also help us return the sites to their original state, leaving a cleaner environment for future generations.”
In addition to this program, Ottawa will establish a fund of $ 750 million to reduce emissions, with a focus on methane.
Trudeau said it would provide “primarily repayable contributions to businesses to make them more competitive, reduce waste and pollution and, most importantly, protect jobs.”
Together, the two programs will maintain “about 10,000 jobs across the country,” Trudeau said.
Loans for midsize businesses
Ottawa will also continue to work with Canada Business Development and Export Development Canada to expand credit support for medium-sized energy companies at risk.
Providing financial support to these companies has been an almost constant request from the Government of Alberta as it attempts to support the industry.
The announcement comes after weeks of intense lobbying by the Canadian Association of Petroleum Producers, which called for relaxation of environmental regulations in the face of the crisis.
The organization said it was happy with Friday’s announcement, as did other industry groups, including the Petroleum Services Association of Canada, which lobbied for cleanup funds to maintain its members at work.
But Trudeau said on Friday that the climate crisis cannot be ignored because of the pandemic crisis.
This view was echoed by the Pembina Institute, which applauded the government’s announcement.
“It is essential that when we approach one global crisis we do not exacerbate another,” read a press release.
“While these investments seem to point us in the right direction, we are examining the details to ensure the results will put oil and gas workers back to work while continuing our efforts to reduce climate pollution.
Meanwhile, back in Pincher Creek, Bruder has no hope that the federal and provincial cash injections will reach him.
“We’re a long way from Edmonton. So those who are closer to cities and things like that, the people with the bigger voice, are they going to be taken care of first and ours are going to sit here for 50 years older? ” he said.
“Who knows. We’ll see.”