The Canadian government has announced a C$2.47 billion ($1.8 billion) wells and emissions cleanup program of grants and loans to salvage oilfield jobs during the industry slump caused by the Covid-19 virus pandemic and fallen energy prices.
The federal aid includes a C$750 million ($562 million) loan fund for methane emissions reductions and C$1.72 billion ($1.3 billion) for sealing and reclaiming “orphan” wells deserted by disbanded or bankrupt oil and natural gas producers.
Payments to governments of producer provinces top the well cleanup budget. Up to C$1 billion ($750 million) goes to Alberta, C$400 million ($300 million) to Saskatchewan and C$120 million ($90 million) to British Columbia.
Another C$200 million ($150 million) will be loaned to the Alberta Orphan Well Association (AOWA), a non-profit partnership of industry and the Alberta Energy Regulator (AER) that runs the province’s cleanup program.
As of April 15 the AOWA Alberta oil and gas field orphan inventory stood at 2,983 wells awaiting safely sealed abandonment, 283 discarded production facilities, and 3,844 shuttered pipeline segments.
AOWA records show a growing list of defunct companies that have caused work for the cleanup agency. The current total stands at 456 disbanded or bankrupt firms that left legacies of cleanup chores costing C$1,000-$21.3 million ($750-$16 million) each.
Smaller, younger production industries have left about 600 orphan wells in Saskatchewan and 350 in BC. Both provinces have cleanup programs.
“Albertans are getting to work cleaning up their province,” said Prime Minister Justin Trudeau after announcing the programs. He predicted the federal oil and gas field aid would support 5,200 jobs in Alberta alone.
Alberta Premier Jason Kenney called the federal grants and loans an “important first step.” Kenney added, “More support is needed to deal with the crisis in Canada’s energy sector.”
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 2577-9877 | ISSN © 2158-8023 |