Will all the provinces copy this?
Ottawa must say no.
Alberta says industry responsible for reclaiming oil wells by Darcy Henton, February 10, 2016, Calgary Herald
Alberta hasn’t asked Ottawa to provide funding to put laid-off oilpatch workers to work reclaiming decommissioned oil and gas wells because it believes industry is responsible for those costs.
The NDP government said it wouldn’t turn down federal funding to remediate non-producing wells, but it is more focused on stimulating the economy through investments in infrastructure.
“We believe industry should continue covering costs related to remediating abandoned wells,” said a spokesman for Alberta Environment in a statement. “We would welcome federal assistance to address orphaned wells. However, our priority right now is investing in infrastructure to create jobs and stimulate the economy through the downturn.”
Saskatchewan Premier Brad Wall has asked the federal government for $156 million to fund a two-year program that would reclaim 1,000 non-producing wells and create 1,200 jobs in his province.
Alberta Energy Minister Marg McCuaig-Boyd doesn’t know if Alberta should make a similar pitch, but she said she has talked to Environment Minister Shannon Phillips about the idea.
“Certainly, that could be one idea, but I don’t know specifically if we have asked for that,” she said in an interview Tuesday. “We’re looking at all possibilities right now. We’ve got a lot of good ideas.”
Phillips was unavailable for comment.
Wall’s proposal was applauded by the oil industry in Alberta, but drew mixed reaction from the provincial political parties.
Brad Herald, Canadian Association of Petroleum Producers vice-president of Western Canada operations, said federal funding for reclamation would bring jobs to communities affected by the collapse of oil prices while bolstering the progress of reclamation of non-producing wells.
“The service industry with the well drilling activity being so low is really being crunched,” he said. “That’s showing up in a lot of stresses in local communities. I think anything that gets that money out into the field and into contractors’ hands for jobs would be a relief for those affected communities.”
Herald, who chairs Alberta’s Orphan Well Association, said the province has a backlog of about 700 wells that require reclamation, but that number is increasing daily as the fiscal crisis in Alberta forces more energy companies into receivership and bankruptcy.
The oil industry provides $30 million annually to fund reclamation of so-called “orphan” wells that were the responsibility of companies that are no longer in business, but there is a precedent for taxpayers’ dollars going into the program in the past to stimulate work during downturns in the oilpatch, he said.
Herald said former PC premier Ed Stelmach directed $30 million of taxpayers’ money into the orphan well program to stimulate the oilpatch after the 2008 global recession. [Why doesn’t the industry use a few of its mega billions in cash being hoarded? Canadians can’t afford to bail out polluting millionaires]
Federal dollars could be put to work immediately to reclaim old sites, he said.
“We have a history previously when there was a stimulus imperative for governments to get that money working in communities,” he said. “The sector and the Orphan Well Fund responded very quickly.”
Progressive Conservative Leader Ric McIver said it is important to keep oil and gas workers in Alberta because the province will need them in the future.
“Not only could that potentially keep the highlyskilled people in Alberta, it may actually reduce the government’s expenditures on social programs, too, if those people are out of work right now,” he said.
Alberta Party Leader Greg Clark also thought it was an excellent idea.
“I’m surprised our provincial government didn’t think of it,” he said. “It’s a big opportunity to solve two problems at once — put people back to work and deal with the big backlog of abandoned wells.”
He said there’s no way the $30 million a year the industry puts into reclaiming wells is sufficient to deal with all the wells that have to be reclaimed.
But Wildrose critic Leela Aheer said industry is tackling the orphan well issue with a self-funded program and Alberta should press instead for approval of the Energy East pipeline to provide jobs for workers.
She applauded Wall for the idea and for standing up for his province, “but if we want to create jobs, I think the pipeline is the key.”
Liberal Leader David Swann said government will be setting “a very dangerous precedent” if it starts paying for oilpatch cleanup that is the responsibility of oil and gas companies. [Isn’t that industry’s and oil biased politicians’ intent with the plan?]
“I would call it a slippery slope to the point where we’re no longer honouring the commitment to the philosophy that the polluter pays,” he said. “If we’re not getting what we should be getting to clean up these wells, then we need to ensure that we do. Otherwise our laws mean nothing.”
He said it is unacceptable for government to enable energy companies to transfer their liability to the public purse. [Emphasis added]
Wall asks feds for money to get Saskatchewan oil workers back on the job, cleaning abandoned wells by D.C. Fraser, Regina Leader-Post, February 7, 2016, Edmonton Journal
Wall proposes federal funding for clean-up of wells
Premier Brad Wall is pitching an idea to the federal government to get Saskatchewan energy workers back on the job.
A few weeks ago, Wall said he spoke with Prime Minister Justin Trudeau about getting $156 million in federal funding to pay for the cleanup of abandoned oil and gas wells around the province.
“We just think this a good source of transition help,” said Wall, adding Trudeau and Regina MP Ralph Goodale were open-minded about the idea.
Wall’s number crunchers say the investment would create about 1,200 jobs in the energy sector and help clean up about 1,000 abandoned wells. Because of previous experience in the industry, many of those jobs would go to energy-sector employees struggling because of oil’s low price.
“It’s not perfect. No program is going to be perfect. Thirty-dollar oil isn’t perfect,” he said.
The premier said he appreciates Trudeau’s commitment to the Prairies in extending employment insurance and offering money for infrastructure during the hard economic times.
Those are, in Wall’s mind, only part of the solution.
“This particular initiative we think would have a more direct impact on those affected,” he said, adding many energy workers are being kept on the job at reduced hours rather than being laid off, or are private contractors not eligible for employment insurance.
Brothers Dan and Matt Cugnet from Weyburn-based Valleyview Petroleum first brought the idea of getting money to clean up abandoned wells to the premier’s office.
“We think it’s a great step for getting people back to work and continue the environmental initiatives that the industry wants to keep going with,” said Dan. [But wants to make ordinary Canadians pay for after taking billions of dollars out of the province? How low can Brad Wall and the oil and gas industry go?]
In 2012, then-auditor Bonnie Lysyk criticized the way Wall’s government was cleaning up orphan wells, or wells where there is no legally responsible or financially able company to do a proper abandonment.
She estimated there were potentially 700 orphan wells in the province. At the time, then-energy minister Tim McMillan disputed that number. On Monday, Wall said there were about 100 orphan wells in the province. According to the province, there are over 20,500 suspended wells in the province; many of which are waiting to be decommissioned and reclaimed.
Industry does pay a fee — essentially a tax — to the province to clean up orphan wells. [How much? As insignificant an amount as in Alberta?]
Wall said that if the price of oil remains low, there is a chance more wells will become orphaned as companies go out of business. [Why don’t any provinces make the companies pay before they drill, for complete clean up and abandonment costs, with a $100,000 retainer in case of leaks, spills, accidents, road damages, etc? The solutions have always been easy and simple, but no politician has the courage to make industry do right by the resource owners in Canada]
Money from the federal government to potentially support those companies, he argues, could help prevent that. [Whatever happened to the Tory-touted “Free Market?” Who pays for the endless cases of contamination? Who pays to help the Kerrs? Who pays for the livestock killed by sour gas? The health harms caused to families? The road damages? The lost farm land?]
The federal government doesn’t have a legal responsibly to clean up orphan wells, but Wall charged they do have a responsibility to help Saskatchewan’s busting economy.
“In terms of helping the energy sector, that’s their obligation,” he said. [Emphasis added]
Comments to above article:
Ivan Major
Why should we pay for the cleanup of abandoned oil wells. The oil companies that drilled those wells need to clean those up on their own dime!
Emill Spilchak · University of Saskatchewan
Exactly my sentiment. Where are the oil companies on this issue???
Saskatchewan wants Ottawa to pay laid-off oil workers to clean old energy wells by John Cotter, The Canadian Press, with a file from CKRM, February 7, 2016, Calgary Herald
Saskatchewan wants the federal government to bankroll a program to would see oil and gas workers who have lost their jobs clean up abandoned wells.
Premier Brad Wall says it would help stimulate employment in the oil-and-gas sector and accelerate environmental cleanup of wells that are no longer capable of production. [Why isn’t industry cleaning up its mess as soon as wells are no longer producing?]
Wall says he has pitched the proposal, which would cost Ottawa $156 million, to Prime Minister Justin Trudeau.
“Here is a chance for us to actually put people back to work in the energy services sector and continue with the cleanup (of suspended wells), perhaps at a more accelerated rate,” Wall said Monday. [Why isn’t the job-promising oil and gas industry, that’s sucked billions from Canadians over the years, putting its workers to work cleaning up these messes, rather than ignoring their legal responsibilities and laying workers off when there’s plenty of work available?]
He estimates the program would generate 1,200 jobs and speed up the decommissioning and reclamation of 1,000 non-producing wells in Saskatchewan over the next two years.
Work would include safe removal and disposal of old equipment, remediation of any spills, covering wells in concrete to eliminate venting of greenhouse gases such as methane and revegetation of the land. [How many years have how many acres of these wells been polluting families and environment, and preventing farm land from producing crops?]
The federal government has indicated it is considering the proposal, Wall said.
“I look forward to a favourable response.”
Officials in the Prime Minister’s Office were not immediately available for comment.
Saskatchewan’s proposal is the brain child of Matt Cugnet, president of Valleyview Petroleums Ltd., a family-owned exploration and production company in Weyburn.
Cugnet said the service sector has been hit hard by the economic downturn caused by low oil prices, forcing his and other companies to lay off trained workers with lots of experience.
He said hiring those workers to deal with suspended wells would help the economy and the environment. [But, it’s not the responsibility of ordinary Canadians, it’s the responsibility of the companies that produced those wells, and only those companies. Where’s the orphan well program funding going? To wine and dine CAPP?]
“You can pay people to sit home on employment insurance or you can pay them to create value,” Cugnett said. [OR, THE PREMIER CAN MAKE INDUSTRY FULFILL ITS LEGAL RESPONSIBILITY, CLEAN UP ITS OWN MESS, AND KEEP WORKERS WORKING DURING THE DOWN TURN. INDUSTRY CAN ALSO PUT WORKERS IN SCHOOL, AND TEACH THEM HOW TO SAVE MONEY AND LIVE RESPONSIBLY]
It would also encourage workers to not move away from the region in search of other jobs, he suggested. Employees will be needed when the price of oil and the industry’s prospects bounce back, he said.
“We are trying to hold on to our people as best we can. “Otherwise we lose their skillset, knowledge and experience.” [And whose fault is that? Only the industry’s greed]
Cugnett said he shared his idea with the member of the legislature for the Weyburn area, who presented it to the provincial government. [Emphasis added]
Saskatchewan wants Ottawa to pay laid-off oil workers to clean old energy wells by John Cotter, The Canadian Press, February 7, 2016, Edmonton Journal
REGINA – Saskatchewan wants the federal government to bankroll a program that would see oil and gas workers who have lost their jobs clean up abandoned and dormant wells.
…
The government estimates there are more than 20,500 “suspended” wells in the province that are currently not producing, many of which are waiting to be decommissioned and reclaimed.
Work would include safe removal and disposal of old equipment, remediation of any spills, covering wells in concrete to eliminate venting of greenhouse gases such as methane and revegetation of the land.
…
Energy companies should cover the cost of cleaning up old wells, said Larry Hubich, president of the Saskatchewan Federation of Labour. Hubich declined a request for an interview. [Emphasis added]
MUST READ: Why the Wild Descent of Oil Is Cause for Concern, Low prices once signalled good news for the global economy. Not this time. by Andrew Nikiforuk, Today, TheTyee.ca
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