Alberta rolling out next rounds of funding under federal oil and gas well site cleanup program

Alberta rolling out next rounds of funding under federal oil and gas well site cleanup program

Author of the article:

Lisa Johnson

Publishing date:

Feb 13, 2021  •  11 hours ago  •  3 minute read

Energy Minister Sonya Savage announces a new orphan well site rehabilitation program, during a press conference in Edmonton Friday, April 24, 2020. (Photo by Chris Schwarz/Government of Alberta)
Energy Minister Sonya Savage announced funding for oil and gas well site cleanup under a $1 billion federal program on Friday. Photo by Chris Schwarz /Government of Alberta

Alberta is rolling out the latest rounds of funding under a $1-billion federal program to clean up inactive oil and gas wells across the province.

Energy Minister Sonya Savage said of the $400-million phase of funding, $100 million will go towards cleanup of sites on First Nations and Métis Settlements. The remaining $300 million will go to oilfield service companies working on behalf of oil and gas producers who paid for closure work over the past two years.

Under provincial law, oil and gas companies are legally responsible to decommission inactive oil well sites and reclaim the land. Sites are inactive if they have not been used for production, injection or disposal in either six months or 12 months, depending on their risk classification.

Applications will opened Friday for the next granting periods of the Site Rehabilitation Program, first announced last spring to help the industry pummelled by low oil prices and the COVID-19 pandemic.


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“This is about doing what’s right to support Alberta’s hard-hit workers, the environment and respect for the land, air and water that our Indigenous communities and leaders teach us to hold so sacred,” said Savage.

Savage said the government worked with Indigenous groups on the details of the latest allotment. It includes $85 million for First Nations reserves and $15 million for Métis Settlements to work with licensees to close sites located on or around their lands.

Frog Lake First Nation Chief Greg Desjarlais said the announcement is bigger than just potential employment.

“Many oil companies swept through our First Nations and became profitable. We’re hopeful one day again we can gather medicines, and have our children ride through these fields on their ponies,” said Desjarlais.

Elizabeth Aquin, interim president and CEO of the Petroleum Services Association of Canada, said between 35 and 50 types of services are employed in the process of decommissioning wells, facilities and pipelines.

After the program was first announced in May, the government took criticism for a slow and confusing approval process.

Savage said it was initially overwhelmed with applications, but has since caught up with the backlog. So far, 36,000 companies have applied and $310 million has gone out to 600 Alberta companies, she said.

According to the province’s latest numbers, Alberta has an estimated 97,000 inactive wells, as well as 71,000 abandoned sites that are permanently plugged, cut and capped.


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As of Feb. 1, the Orphan Well Association, which is responsible for sites licensed to companies that are defunct or bankrupt, listed an inventory of 2,752 orphan sites and 4,348 sites up for reclamation.

Savage said the federal Site Rehabilitation Program has created approximately 1,500 jobs on the ground so far and is expected to create 5,300 jobs across the province before the funded work wraps up in 2022.

But NDP Opposition environment critic Marlin Schmidt said Friday the lack of performance measures or targets remain a red flag.

“The key measure of success is how many well sites they’ve cleaned up,” said Schmidt.

Ministry spokesman Kavi Bal said in a statement Friday evening more than 11,000 well sites have been identified for abandonment work with the money allocated so far.

“That number will increase substantially as the remaining nearly $700 million is allocated (before 2022),” he said.

Federal Natural Resources Minister Seamus O’Regan said working with Alberta’s oil and gas sector is a must if Ottawa is going to reach its goal of net zero greenhouse gas emissions by 2050.

“The road to net zero goes through Alberta, it goes through oil and gas,” said O’Regan.

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