Action vowed on orphan wells, Trans Mountain pipeline project

In its kickoff to the spring legislative session, it appears the Notley government will put its shoulder behind a new proposal to clean up abandoned oil and natural gas wells.

The provincial government unveiled two strategies in Thursday’s throne speech designed to help an ailing oilpatch squeezed by a prolonged downturn, pipeline problems and thousands of layoffs.

In its kickoff to the spring legislative session, the NDP’s political blueprint said the province is working with the federal government to create jobs in the oilfield service sector.

Details were sparse, but it appears the Notley government will put its shoulder behind a proposal to clean up abandoned oil and natural gas wells scattered across the province.

The idea would “make sure more orphaned wells, those no longer under the care of a company, are safely closed and reclaimed.”

The throne speech also pledged the province would stand up for the Trans Mountain pipeline project, seeking intervener status on legal challenges over the $6.8-billion development. The pipeline expansion, which would triple the amount of oil moving from Alberta through British Columbia, received federal cabinet approval in November.

But, by one account, it’s faced at least eight lawsuits from various opponents — environmental critics, municipal governments and First Nations — determined to stop the project’s proponent, Kinder Morgan, in its tracks.

While both of Thursday’s government promises may seem like niche measures, they are significant in their own right.

Orphan wells are quietly becoming a big headache in the province. The number of abandoned wells with no active owner has risen sharply during the recession, up 120 per cent in the past year.

The independent Orphan Well Association that’s responsible for their remediation is funded by an annual industry levy of $30 million paid by petroleum producers.

To get an idea of the treadmill it’s facing, the association cleaned up 185 wells in its last fiscal year, but added 258 new ones to its list.

“The (association) has seen an influx of orphaned wells as a result of the economic downturn that need to be abandoned and reclaimed properly,” Brad Herald, chairman of the Orphan Well Association, said in a statement.

Last year, the Petroleum Services Association of Canada asked Ottawa for up $500 million in infrastructure funds to accelerate well decommissioning. The pitch was designed to help create oilpatch jobs and address an environmental liability.

However, the Notley government wasn’t thrilled with the idea, arguing direct grants would move Alberta away from its polluter-pay principle.

PSAC chief executive Mark Salkeld has refined the proposal, calling on governments to provide a repayable loan to the Orphan Well Association so it can speed up remediation efforts during the downturn while costs are low and unemployment is high.

Energy Minister Marg McCuaig-Boyd said the province has had positive conservations with the Trudeau government on the orphan well idea and called it a matter of “utmost importance.”

Details are being worked out, with more information likely to come before the end of the spring session.

“It’s been an issue that’s not been addressed for a long time, it’s a growing issue and we need to not sit back and admire it anymore,” she added. “We need to come up with a plan.”

A spokesman for federal Natural Resources Minister Jim Carr said Ottawa is reviewing the proposal.

Salkeld said Thursday he realizes the well remediation program isn’t a done deal, but the fact it was included in the throne speech gives him hope it will happen before the winter drilling season winds down.

“There are still some steps to be done, but in my mind this is a good first step,” he said.

Meanwhile, the idea that Alberta will put its oar in the water on any legal challenges over Trans Mountain illustrates just how vital the pipeline project — and the broader issue of access to tidewater — has become to the government.

There will certainly be no shortage of lawsuits ahead.

Just last month, the City of Vancouver announced it will seek a judicial review over the B.C. government’s environmental assessment on the pipeline expansion.

According to a Canadian Press report, the project has faced at least eight legal challenges to date, from groups such as the Squamish Nation, the City of Burnaby and the Raincoast Conservation Foundation.

With a provincial election in British Columbia coming in May, the Notley government could face the possibility of seeing a new NDP government in Victoria that opposes Trans Mountain — potentially adding another combatant to the legal ring.

Both the Canadian Association of Petroleum Producers and the Explorers and Producers Association of Canada welcomed the province’s step to seek intervener status in court.

EPAC president Gary Leach said the industry fully understands that getting government approval to build pipelines isn’t the end of the process.

“Governments have to stand behind the decisions they make,” he said.

The Opposition Wildrose noted the NDP’s throne speech included no support for the Keystone XL oil pipeline project, which has been given new life by the Trump administration.

It’s no surprise these throne speech pledges will face criticism.

The entire pipeline file has proven deeply divisive across Canada, while the idea of governments lending money to help clean up an industry environmental issue will be a tough sell in some quarters.

But the idea of addressing orphan wells, creating oilfield service jobs and pushing to get more oil pipelines built — improving prices for producers and the government — has obvious merit.

The promises have been made. Now, the provincial government has to deliver.