Alberta hikes cleanup funds
Government boosts available loans to C$335 million for abandoned well work; Kenney says more job-boosting strategies on the way
for Petroleum News
The Alberta government is offering an extra C$100 million in loans to the one growth sector in its oil industry, boosting to C$335 million money that will help decommission 800 to 1,000 abandoned wells.
It said the latest infusion to clean up an estimated 6,500 orphaned sites would create 500 direct and indirect jobs.
In making the announcement earlier in March, Premier Jason Kenney said the funds will provide a “lifeline” to service workers hit by an estimated 50,000 layoffs since 2015.
“This is a very important move aimed at getting oilfield workers back to work right now when we need it,” he said.
Kenney said additional government investment will be made before the end of March that will show his government’s commitment “to getting pipelines built - the key part of infrastructure for the future.”
He also unveiled his administration’s “Blueprint for Jobs” that he has described as part of a short term strategy to develop rare-earth and mineral resources to diversify the energy sector, create new investment policies for tech startups and “demonstrate national leadership” in renewable energy.
Abandoned wells loansThe abandoned well loans will go to the Orphan Well Association, OWA, which said the funds will start 1,000 environmental site assessments aimed at returning land to its pre-drilling condition.
In the past five years the OWA has increased its expenditures on decommissioning wells and pipelines and reclaiming sites to C$94.4 million from C$16.6 million.
The original loans under the previous New Democratic Party government injected C$235 million that it said would create 1,650 jobs.
Those loans have a 10-year payback period, which the industry plans to cover by doubling the levy it pays to the OWA.
Government officials estimate the industry will pay back a total of C$53.6 million over the period of 2019 to 2021.
Energy Minister Sonya Savage said the loans support Alberta’s polluter-pays principle, which makes oil and gas companies responsible for cleaning up their work sites.
She said the government will soon release a suite of policies to address the entire life cycle of wells, from licensing to operations and production, through to abandonment, reclamation and post-closure of sites.
Savage said the new rules will give the OWA more flexibility in the ownership, control, sale and management of its inventory of orphaned wells.