The Alberta government is launching a new program with $1-billion in federal money to remediate oil wells across the province, which it says will lead to 5,300 jobs.
Announced Friday, Energy Minister Sonya Savage said the site rehabilitation program, which will start May 1, is expected to clean up thousands of sites and create work in an industry that has been suffering from low oil prices combined with the current COVID-19 pandemic.
“These jobs are needed now. We need to get Albertans back to work,” Savage said.
The program grants cover between 25 and 100 per cent of the cost of each cleanup depending on the company’s ability to pay. The money can go towards closure work on inactive wells and pipelines, including remediation and reclamation, the removal of abandoned in-place pipelines or Phase 1 and 2 environmental site assessments.
The government will spend the first $100 million on service companies that have been “the hardest hit” by the economic downturn, Savage said.
After that, the government will focus on “directing funds to where they can have the most significant environmental benefits or where some operators have failed landowners and have not paid their lease rents.”
The funding comes from the $1.7 billion the federal government announced last week for cleaning up abandoned or orphaned oil well sites, and contractors will apply via a new online portal.
Contracts of up to $30,000 per application will be accepted May 1-31 for the first allotment of money. From May 15 to June 15, another $100 million will be set aside for projects where government is paying landowners as required under theSurface Rights Act.
Savage said future increments will be developed for larger projects.
NDP energy critic Irfan Sabir called the federal money “welcome news” but criticised Premier Jason Kenney for waiting for help from the federal government and not acting sooner.
“I hope Premier Kenney and the UCP have further plans to support the energy sector and the women and men who work in it,” Sabir said in a statement. “And in the future, I hope they take the opportunity to enforce the polluter pay principle and ensure that municipalities and landowners are properly compensated.”
Savage said there are companies that have been hit hard over the past five years and “don’t have two pennies to rub together” to help with the cleanup.
“They’re just going to tip over and tip over those wells into the orphan wells funds. So it’s those companies that will need to have 100 per cent of the cost paid for by the program.”
There are 94,000 inactive well sites in the province that could qualify, Savage said. Orphan wells do not qualify for this specific pot of money.
Once deals between the service provider and the well licensees have been reviewed by program administrators, new contracts will be signed with the Alberta government, Savage said. Providers will get 10 per cent of the money up front, 60 per cent as the project progresses and the remainder upon completion.