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Feds and province to provide $400 million for oil and gas well cleanup

Program is part of $1 billion in funding allocated by the federal government to help provide jobs to Albertans during the pandemic.
Oil Well Pumpjack 9481
An oil well pumpjack turns in a field south of Black Diamond. (BRENT CALVER/Western Wheel)

Alberta and the federal government are rolling out another round of funding to help clean up inactive oil and gas wells across the province, creating some jobs in the process. 

The funds are part of a federal program, totalling $1 billion, to clean up the 94,000 orphan wells in Alberta. In total, the program is expected to create nearly 5,300 jobs.

Energy Minister Sonya Savage said Friday this round of funding includes $400 million, $100 million of which will go toward First Nations and Métis Settlements, while the remaining $300 million will go to oil and gas producers who paid for closure work in 2019 or 2020. First Nations will receive $85 million while Métis Settlements will get $15 million. 

"We are both supportive of responsible resource development, which of course necessitates stringent environmental cleanup, and the reclamation of oil and gas sites," Savage said. 

Federal Minister of Natural Resources Seamus O’Regan Jr. said the oil industry has been hit by a double whammy – the pandemic on top of the downturn in prices.

"Today's announcement is particularly important because of its focus on First Nations and Métis settlements. When you include everyone, you get the best," O'Regan said. 

The program has been running since May 2020, with $310.3 million in site rehabilitation program grants given out last year. The plan is part of a COVID-19 economic stimulus by the federal government to get Albertans back to work by speeding up well, pipeline and site closures. 

Oil and gas companies in Alberta are responsible to shut down inactive oil and gas well sites and reclaim the land.

“This program is going to help significantly address the problem of a very large inventory of inactive wells,” Savage said. 

“This will help move some of that inventory along to closure.”

Greg Desjarlais, Chief of Frog Lake First Nation, said he is thankful for the funding, which will provide gainful employment during the pandemic and downturn in the oil industry. 

"We are thankful today and also for the Métis settlements, our brothers, who were able to clean up these wells and return the land to its natural capacity. For hopefully one day again, we can gather medicines, and we can have our children ride through these fields on their ponies," Desjarlais said. 

As of Feb. 12, the more than $300 million given out last year has gone to 633 Alberta-based companies and applications for the new periods will be open until March 31, 2022.

Remaining grant periods for the balance of the $1-billion funding commitment will be announced in the coming months.

Jennifer Henderson

About the Author: Jennifer Henderson

Jennifer Henderson is the editor of the St. Albert Gazette and has been with Great West Media since 2015
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