Alberta Announces $100M Loan for Orphan Well Clean-Up
Alberta Premier Jason Kenney and Energy Minister Sonya Savage have announced a C$100-million loan to help the province’s Orphan Well Association clean up another 1,000 abandoned oil and gas production sites, while creating 500 jobs for unemployed oilfield service workers.
The news came just days after the federal Green Party caucus urged Finance Minister Bill Morneau to divert fossil fuel subsidies to orphan well reclamation when he unveils his 2020 budget later this month. Alberta’s Energy Regulator has put the cost of the environmental liabilities for abandoned fossil infrastructure as high as C$260 billion and estimated it would take 2,800 years to clear the backlog.
“Our government recognizes the need to turn the tide on oil and gas liabilities in the province,” Savage said at a media event outside Edmonton.
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“We have seen far too many Albertans lose their jobs and too many…looking for work,” Kenney said, at a time when the province’s unemployment rate for men aged 18 to 25 stands at 17%. “That is bad news for an entire generation.”
Orphan Wells Association Executive Director Lars DePauw said Alberta currently has 6,500 abandoned oil and gas sites. He added that the OWA cleaned up 800 sites last year, and would now boost its 2020 target to 2,000.
But the number is expected to increase as more of the province’s fossils declare bankruptcy. Taber, Alberta landowner rights’ advocate Daryl Bennett expects to see another 5,000 to 10,000 sites added to the inventory in the new year, and he doesn’t see the OWA, which is funded by levies on fossils, as the solution.
“It’s not making the polluter pay, it’s making the competitor of the polluter pay,” he told the Financial Post. “There’s no way that this is going to take care of the problem,” and “landowners want the wells cleaned up.”
During the media event, Kenney pointed to the global economic slowdown due to the coronavirus as the latest challenge facing his province’s fossil economy. “I won’t hide it: it frustrates me that I think we’re doing everything that we reasonably can to get this economy moving again,” he said. “And yet we’re being sideswiped by global events that are beyond our control.” [‘Everything we reasonably can’, except embracing today’s and tomorrow’s energy sources and the millions of jobs they create, rather than clinging to the past.—Ed.]
The Post captures a snapshot of what Kenney means by doing everything his government reasonably can: its budget last week predicted 2.3% economic growth next year, but only if benchmark West Texas Intermediate (WTI) crude oil averages US$58 per barrel this year. On Monday, the price of WTI rose 4%—to US$46.57.