NDP try­ing to speed cleanup of or­phan oil and gas wells


Lethbridge Herald - - HEADLINE NEWS - Lau­ren Krugel THE CANA­DIAN PRESS — CARSTAIRS

Al­berta’s NDP gov­ern­ment is try­ing to speed up the cleanup of old, or­phaned oil and gas wells with a $235-mil­lion loan.

The prov­ince an­nounced leg­is­la­tion Thurs­day that will al­low it to lend the money to the Or­phan Well As­so­ci­a­tion.

The in­dus­try-funded, not-for-profit group man­ages the shut­ting and cleanup of oil and gas sites where there is no longer any­one legally re­spon­si­ble for those tasks, of­ten be­cause a com­pany has gone out of busi­ness.

“The num­ber of or­phaned wells in Al­berta is a grow­ing prob­lem that has been made much worse by the col­lapse in oil prices,” Al­berta Premier Rachel Not­ley said at a ru­ral prop­erty north of Cal­gary.

A well was first drilled on the land just out­side Carstairs, Alta., in 1980 and passed through the hands of 10 dif­fer­ent own­ers over the years. It was or­phaned in Oc­to­ber 2015. A stor­age tank and pump­jack still re­main even though noth­ing is be­ing pro­duced.

Not­ley said $30 mil­lion ear­marked in the re­cent fed­eral bud­get will cover the in­ter­est costs of its loan, which it ex­pects to be re­paid over 10 years.

“By us­ing this funding from the fed­eral gov­ern­ment to back­stop a loan this large, we’re able to get much more favourable rates than the Or­phan Well As­so­ci­a­tion could ac­cess on its own,” she said.

The re­pay­ment will come out of the as­so­ci­a­tion’s ex­ist­ing levy. Its bud­get is set to dou­ble from $30 mil­lion to $60 mil­lion in the 2019-20 fis­cal year.

The idea came up when Prime Min­is­ter Justin Trudeau met Not­ley, other pro­vin­cial of­fi­cials and the in­dus­try in Fe­bru­ary 2016.

The prov­ince es­ti­mates the loan will help cre­ate up to 1,650 new jobs over the next three years. Work could be­gin as early as the sum­mer.

As of March, the Or­phan Well As­so­ci­a­tion had a list of 2,084 wells to be dealt with. It closed 185 last year.

To date, in­dus­try spent $250 mil­lion to re­claim 600 sites, said as­so­ci­a­tion chair Brad Herald.

“The gov­ern­ment of Al­berta’s as­sis­tance will ac­cel­er­ate that work, re­turn­ing prop­er­ties to their orig­i­nal state at a much faster pace.”

In Al­berta there are 83,000 in­ac­tive wells, which are no longer pro­duc­ing but not nec­es­sar­ily or­phaned.

There are an­other 69,000 aban­doned wells, which have been plugged, cut and capped so that they’re safe.

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