Province offers up $235M to remediate inactive well sites in Alberta
Published Thursday, May 18, 2017 12:09PM MDT
The premier and energy minister were in Carstairs on Thursday to announce an initiative to accelerate the cleanup of Alberta’s old orphan well sites.
A number of old, pump jacks, wells and storage tanks are sitting on rural properties and the companies that were responsible for them are no longer in business.
For landowners they are an eyesore and an obstacle and the province says the number of old sites has increased over the last few years.
“It’s no secret that the number of old well sites with no owners around to clean them up has gone up in recent years so our government is working with the Orphan Wells Association to help address this problem. To help landowners,” said Margaret McCuaig-Boyd, Minister of Energy.
“The number of orphan wells in Alberta is a growing problem. A problem that has been made much worse by the collapse in oil prices,” said Premier Rachel Notley. “Albertans have been very clear with us. Get people to work, clean up these well sites but maintain the principle that the industry that benefitted from these wells has to be the ones to pay to get these sites remediated, not Alberta tax payers. It’s called the polluter pay principle.”
“We’re hopeful that this effort can also ensure that these liabilities don’t continue to grow and these wells are reclaimed before they become orphaned. In Alberta there are 83,000 inactive wells and 69,000 abandoned wells, which companies are still responsible for cleaning up,” said Nikki Way, from the Pembina Institute.
The province has introduced legislation to provide a $235 million loan to the Orphan Well Association (OWA) to speed up the reclamation of the well sites.
“The province will finance the loan with the help of $30 million from the federal government, announced in their last budget. This money from the federal government will cover the interest costs on the loan,” said Notley.
The OWA says the industry has contributed almost $250 million to date to successfully abandon almost 100 wells and reclaim over 600.
“The Government of Alberta’s assistance will accelerate that work, returning properties to their original state at a much faster pace,’ said Brad Herald, Orphan Well Association.
Notley says the initiative will also create over 1600 new jobs for Albertans over the next three years at a time when they are needed most.
“The agreement will put people to work as early as this summer,” she said. “It’s a win for landowners, a win for the environment, a win for industry and a win for thousands of Albertans who will benefit from the good jobs that we’re creating.”
“The funding and strategies announced here today will go a long way in helping PSAC members retain and rehire employees, keep equipment active and at the same time, ramp up the efforts required to take care of oil and gas wells that no longer have owners,” said Mark Salkeld PSAC.
The OWA will pay the loan back to the province over the next ten years with funds from the existing orphan well levy, which is paid by industry.