The Alberta government is loaning $100 million to the Orphan Well Association to help create jobs and cut the number of abandoned wells in the province.
According to a press release from the Alberta government, the funds are part of the Kenney government’s Blueprint for Jobs.
“This taxpayer investment will create good-paying jobs while improving the environment,” said Alberta Premier Jason Kenney. “Actions like this will help to get Alberta back to work.”
The Orphan Well Association is an independent non-profit organization that operates under the delegated legal authority of the Alberta Energy Regulator (AER).
The organization’s mandate is to safely decommission orphan oil and gas wells, pipelines and production facilities, and restore the land as close to its original state as possible.
Lars De Pauw, executive director of the Orphan Well Association said “By staying on top of the orphaned well inventory, we’re helping to ensure a sustainable energy industry in Alberta.”
De Pauw adds the loan will help the association further its efforts as well as help the struggling oil service sector and reduce the impact on affected landowners.
Funding for the Orphan Well Association comes primarily from the upstream oil and gas industry, through annual levies administered by the AER.
The money is expected to fund the decommission of about 1,000 wells and start more than 1,000 environmental site assessments for reclamation. The Kenney government estimates the projects will create up to 500 direct and indirect jobs in the oil services sector.
“We are getting Albertans back to work while staying true to our province’s reputation as a responsible resource developer,” said Sonya Savage, Alberta Minister of Energy. “This loan will increase economic activity across our province and is an important step in addressing the pressing issue of oil and gas liabilities – particularly in rural Alberta.”
In 2017, the Notley government provided the Orphan Well Association with a $235 million interest free loan. The OWA began repaying the loan in 2019, using money received from industry through the annual Orphan Fund Levy.
The Kenney government and the Orphan Well Association are finalizing specific loan terms and conditions and are establishing a repayment schedule. Both have agreed that the investment will be completed before April 1, 2021.