Tuesday, May 23, 2017

another promise breached??----Alberta Premier Rachel Notley said the loan “is about creating jobs and fixing a longstanding problem.”----- Industry Refuse To Do It's Part While Sitting On A Mountain Of Cash!!-------How foolish to the point of stupidity it was for our Premier to put so many millions of Albertans dollars at risk, simply because she lacked the guts to make industry fess-up to conditions they agreed to!! It is just too easy to act like those before her- using the public’s money to keep industry happy!! Again below is evidence that industry is sitting on piles of cash, while citizens all across Canada are asked to keep their service industries afloat- by borrowing money to offer the OWF instead of the industry taking it’s rightful and proper place as promised to Albertans? -------The five largest oil producers including Suncor Energy Inc. and Cenovus Energy Inc. have a combined $8.5 billion in cash and cash equivalents, an increase of 7.6 percent from a year earlier and more than twice the levels seen during 2009 downturn. The figures, which are little changed from a record $9 billion in 2014, don’t include the proceeds from Imperial Oil Ltd.’s recent sale of its Esso-brand gas stations for $2.8 billion.

another promise breached??--The elite among us --in this case the oil and gas industry get the money while the most vulnerable at the bottom of the pyramid of power get nothing.
It's typical that captured political parties will do anything to butter up the industry -in this case the Notley has handed over $235 million of our dollars as a "loan" to the industry as well as paying for the interest payments. What the heck???
And then we are told that the jobs that the oil and gas industry cut will come back as jobs if we provide a loan for the industry to do their own damn liability work.
We got scammed again. First by the PCs who got the Stelmach to hand over $30 million as noted here:
March 3, 2009
Province announces three-point incentive program for
energy sector
Short-term initiative to stimulate new and continued economic activity
The highlights of the province’s three-point plan include the following.
A drilling royalty credit for new conventional oil and natural gas wells. This one-year program will provide a $200-per-metre-drilled royalty credit to companies on a sliding scale based on their production levels from last year. This will ensure that the maximum benefits will be
available for small and mid-sized producers, while freeing up available capital for all companies.
A new well incentive program, which offers a maximum five-per-cent royalty rate for the first year of production from new oil or gas wells. This one-year program is intended to help free up cash flow, and in turn, help provide access to the capital necessary for reinvestment by
Alberta’s oil and gas industry.
To encourage the clean-up of inactive oil and gas wells, the province will invest $30 million in a fund committed to abandoning and reclaiming old well sites. This will reduce the environmental footprint of the energy sector by returning well sites to their former states, while
also helping to keep industry service crews at work.
************************************************************
And now we pay for the fricking loan for an industry flush in money and assets.
Again --what the heck? Just the same scam with a different delivery tool.

LikeShow more reactions
Comment

From: Stewart Shields <
Date: Tue, May 23, 2017 at 6:37 AM
Subject: Industry Refuse To Do It's Part While Sitting On A Mountain Of Cash!!
To: premier@gov.ab.ca, brian mason <brian.mason@assembly.ab.ca>, dunvegan.centralpeace.notley@assembly.ab.ca, letters <letters@edmontonjournal.com>, Liberal Canada <info@liberal.ca>, Office of the Premier <brad.wall@gov.sk.ca>
Cc: Calgary MountainView <Calgary.MountainView@assembly.ab.ca>, calgary.currie@assembly.ab.ca, Debbie carlson <edmonton.ellerslie@assembly.ab.ca>, edmonton.goldbar@assembly.ab.ca, edmonton.riverview@assembly.ab.ca, ENV Minister <ENV.Minister@gov.bc.ca>, fishcreek <calgary.fishcreek@assembly.ab.ca>, goodale <goodale.r@parl.gc.ca>, grande prairie <grandeprairie.wapiti@assembly.ab.ca>, innisfail <innisfail.sylvanlake@assembly.ab.ca>, Lacombe Ponoka <Lacombe.Ponoka@assembly.ab.ca>, lethbridge.east@assembly.ab.ca, mccallum <mccallum.j@parl.gc.ca>, Ministerial Unit <MCU@justice.gc.ca>, Northern_Reflections_hwsaa_biqolla@cp20.com, raitt <raittl@parl.gc.ca>, Strathmore Brooks <Strathmore.Brooks@assembly.ab.ca>, T Banks <>, Tom <>, bphippen


Capp And The AER certainly did succeed in screwing over the Alberta Public- by getting our government involved with the financial health of the industries Orphan Well Association!  One could come away thinking it was the foreign multi-nationals like Shell, Exxon-Mobile, Chevron,et al- that went bankrupt, and could not afford to abandon wells as promised to Albertans, if one was to pay a lick of attention to the industry’s “sweet hearts”!! However these high rollers are as far away from bankrupt as they ever were!  It’s not that these very rich industry members don’t have the funds to properly support the OWA, it’s just that they have refused by their silence to take their rightful place!!  This was propagated by CAPP and the AER sneakily and gutlessly asking for a paltry $30 million to cover what our government believes should have been $235 million!! This was of course purposeful -to force governments to become foolishly involved in the financial health of industry Orphan Well Association!!  Hooray they won- and the public lost- helped by industries “sweet hearts”. Below I enclose a letter I wrote April 30th, promising exactly what kind of game was being played!!  Our media in Alberta are useless in writing anything that is not praiseworthy of Alberta’s foreign energy industry, so we must write the news ourselves!! How foolish to the point of stupidity it was for our Premier to put so many millions of Albertans dollars at risk, simply because she lacked the guts to make industry fess-up to conditions they agreed to!! It is just too easy to act like those before her- using the public’s money to keep industry happy!!  Again below is evidence that industry is sitting on piles of cash, while citizens all across Canada are asked to keep their service industries afloat- by borrowing money to offer the OWF instead of the industry taking it’s rightful and proper place as promised to Albertans?  This unusual move by the Alberta government as well as the $30 million Stelmach offered the OWA in 2009 indicates clearly to CAPP and AER that the public trough is the place to attach during any crisis—Brad Wall certainly supports that- along with many “Industry Sweethearts.” How in Alberta can we break away from packing the energy industry on our backs- and make our petroleum properties return a decent profit equal to other producing areas??
Stewart Shields
On 30/04/2017 12:27 PM, Stewart Shields wrote:
On Apr 30, 2017, at 11:49 AM, Stewart Shields <lagran@shaw.ca> wrote:
I certainly want to thank all those who have helped keep those guilty of trying to properly screw-over the public, in the news!  Don’t be fooled by our industry watchdog—they are also guilty of screwing-over the public-- by asking for a paltry $30 million from industry to do a huge job!!  These Calgary Dudes are just now trying to put on a show after realizing where the Alberta public stand with respect to the public doing what has always been promised as industries job!! And our Government have acted in concert with their regulator for not demanding they appear in Edmonton to explain their weak-kneed actions that they hoped would cause a windfall of cash from government forces to again bailout industry from taking their rightful places!! Lets not forget it is industry who lift the cost of this so called government appendage! It’s time Albertans stood shoulder to shoulder to flush out elements like CAPP who have for years held far too much power over all our forms of government!!
Imagine foreign bitumen owners asking the local government, Wood Buffalo, to drop their due tax bill because they experienced a fire that affected their income??  Good God Wood Buffalo could teach them a pile about fires affecting income??  The CNOOC has the entire Chinese government behind it and still has the guts of a government mule to ask the little Wood Buffalo local government to write down it’s taxation even though this small local government just suffered the worst tragedy in Canadian history?? I got totally fed up with governments gifting the richest industry on the planet when Stelmach indicated he was forced to gift the Abandoned Well Fund $30 million to keep his job—while the industry that year offered $12.5 million for the same year!!  I was then dumb founded when the Alberta government gifted Shell 60%, Chevron 20%,and Marathon 20% –$745 million to add CO2 capture to their Scotford refinery!!  And industry can only offer $30 million to clean up messes they are responsible for!  It’s indeed laughable when both our industry controlled regulator and provincial government- indicate they uphold the “Polluter-Pay Principal” while the regulator would only ask industry for $30 million for a man-sized job, and Notley has already indicated the $30 million gifted Alberta by the federal government is to be turned over to the “Orphan Well Fund!  This, after Stelmach already gifted $30 million in 2009 against industries $12.5 Million!!  Thanks again to those who help restore some sense in this area!! This government action changes everything promised land owners who have allowed wells to be placed on their land under totally different conditions---another promise breached??
Stewart Shields
Canada’s oil producers sitting on piles of cash, despite cutbacks by Jeremy van Loon, Bloomberg, March 16, 2016, Calgary Herald
Canada’s biggest oil producers are sitting on a near-record pile of cash, giving them the resources to keep investing and manage debt while weathering the worst price rout in a generation.
The five largest oil producers including Suncor Energy Inc. and Cenovus Energy Inc. have a combined $8.5 billion in cash and cash equivalents, an increase of 7.6 percent from a year earlier and more than twice the levels seen during 2009 downturn. The figures, which are little changed from a record $9 billion in 2014, don’t include the proceeds from Imperial Oil Ltd.’s recent sale of its Esso-brand gas stations for $2.8 billion.
“Sitting on cash and a healthy balance sheet has become a competitive advantage,” Amir Arif, an analyst at Cormark Securities Inc. in Calgary, said by phone. “These guys still have a lot of capital they need to spend.”
Divestitures, cost cutting, equity raises, and dividend cuts have helped bolster balance sheets as Canadian oil producers buckle down for the “lower for longer” prices Suncor Chief Executive Officer Steven Williams has described. Compared with the last downturn when commodity prices made a quick recovery, the industry isn’t betting on a return to high prices and needs the money to keep their operations expanding.
Imperial and Cenovus will also need to cash to develop assets using steam technology. Imperial Oil in a March 11 statement filed an application for an oil-sands project that would produce 50,000 barrels a day from 2022, while expansions at Cenovus’s Foster Creek and Christina Lake sites will begin producing oil in the third quarter, the company said in a Feb. 11 statement.
“Our No. 1 priority during this period of low oil prices is to maintain our financial resilience and the strength of our balance sheet,” Brett Harris, a spokesman for Cenovus, said in an e-mail. “We are going to be taking a very conservative approach to ensure that we don’t compromise the balance sheet strength that we’ve worked so hard to build over the last year or so.”
Canada’s largest oil producers had about $4 billion in cash in March 2009, as the price of crude began to climb from a low of just under $34 a barrel in 2008. Their cash reserves fell to $1.9 billion by 2011 as the recovery took hold and the industry began to expand again.
The spending, combined with the drop in prices, has taken a toll on balance sheets with debt now standing at an average of 2.16 times earnings before interest, taxes, depreciation and amortization, compared with 1.08 times last year, according to data compiled by Bloomberg.
The cash reserves are a “comfort,” in such an environment, said John Stephenson, chief executive officer of Stephenson & Co. Capital Management in Toronto, which oversees $55 million. … [Emphasis added]
https://www.alberta.ca/release.cfm?xID=25402CDEFE818-F1BC-5D66-DF309066E457F2A4





Resourceful. Responsible. March 3, 2009 

Province announces three-point incentive program for energy sector Short-term initiative to stimulate new and continued economic activity

Edmonton... The Government of Alberta has announced a new three-point incentive program designed to help keep Albertans working in the province’s energy sector during the current global economic slowdown.

“The oil and gas industry remains the lifeblood of Alberta’s economy and communities throughout the province,” said Premier Ed Stelmach. “We cannot directly influence the global economic climate. However, we can introduce measures to encourage new investment and help keep Albertans at work.  This will benefit families and local businesses, while generating provincial revenues we can invest in programs that are important to Albertans.” 


The highlights of the province’s three-point plan include the following.

 A drilling royalty credit for new conventional oil and natural gas wells. This one-year program will provide a $200-per-metre-drilled royalty credit to companies on a sliding scale based on their production levels from last year. This will ensure that the maximum benefits will be available for small and mid-sized producers, while freeing up available capital for all companies. 

A new well incentive program, which offers a maximum five-per-cent royalty rate for the first year of production from new oil or gas wells. This one-year program is intended to help free up cash flow, and in turn, help provide access to the capital necessary for reinvestment by Alberta’s oil and gas industry. 


To encourage the clean-up of inactive oil and gas wells, the province will invest $30 million in a fund committed to abandoning and reclaiming old well sites. This will reduce the environmental footprint of the energy sector by returning well sites to their former states, while also helping to keep industry service crews at work. “While we cannot make up for the impact that global financial markets are having on Alberta, we are doing what we can,” said Energy Minister Mel Knight. “This short-term incentive program introduces innovative ways to help spur activity in our energy drilling and service sector during this economic downturn.” The introduction of the package follows consultation with representatives from the energy industry and the financial community about the current challenges facing investment and oil and gas activity in Alberta.

 The province will monitor the impact of the incentive program, and at the end of the year, assess whether it is necessary or appropriate for it to be continued.


-30- Backgrounder: Additional details on the three-point stimulus plan and drilling activity in Alberta Media inquiries may be directed to: Jason Chance Director of Communications Alberta Energy 780-422-3667 To call toll free within Alberta dial 310-0000. NOTE: Technical questions from industry or the financial community regarding these programs can be emailed to response.energy@gov.ab.ca March 3, 2009 Additional details on the three-point stimulus plan and drilling activity in Alberta Drilling royalty credit Applies to new conventional oil and natural gas wells drilled between April 1, 2009 and March 31, 2010. Provides a $200 per meter royalty credit for new oil and gas wells. Credits will be available on the following sliding scale with the maximum benefit to be provided to small producers. The maximum credits available will be determined by a company’s production levels from 2008 and its drilling activity in 2009-10. 2008 Production levels Maximum credit as a percentage of royalties owed for fiscal year 2009-10 Less than 10,000 barrels of oil per day equivalent* (boe/day) 50% 10,001-15,000 boe/day 40% 15,001-20,000 boe/day 30% 20,001-25,000 boe/day 20% Greater than 25,000 10% * Barrels of oil equivalent is a measurement used by industry that is based on the amount of energy contained in a barrel of crude oil. For example, consider a company which produced 8,000 boe/day in 2008. The total value of available credits would be based on the company’s cumulative measured depth of new drilling in 2009-10. The company would then receive a credit of up to 50 per cent of the total royalties it owed in 2009-10. Based on forecasted drilling activity levels, the estimated potential royalty impact of the drilling royalty credit program is $466 million. New well incentive program Applies to all new wells that begin producing conventional oil or natural gas between April 1, 2009 and March 31, 2010. Provides a maximum five-per-cent royalty rate for the first 12 months of production, up to a maximum of 50,000 barrels of oil or 500 million cubic feet of natural gas. For example, as long as production caps were not reached, a well producing on April 5, 2009 would be eligible through to April 5, 2010; a well producing on March 25, 2010 would be eligible through to March 25, 2011. Based on forecasted drilling activity levels, the estimated potential royalty impact of the drilling royalty credit program is $1.04 billion. Orphan well fund When an oil or gas well has no legally responsible or financially able party to deal with abandonment and reclamation, it is considered an “orphan.” The province is providing $30 million to be invested by the Orphan Well Association in abandonment and reclamation projects with a focus on high-priority, very old “legacy” sites and on final reclamation efforts for abandoned sites—all of which pre-date the creation of the Orphan Well Association and the establishment of modern industry practices and regulatory standards. There are more than 600 estimated sites that fall into these categories. Energy industry employment A drilling rig drills holes to determine whether oil or gas is present in commercial quantities. A working drilling rig will usually employ up to four crews of four to six people. Once a viable pool has been reached, the drilling rig will usually be replaced with a service rig, which is specifically equipped to bring the well into production. Service rigs generally work on existing wells, including completing wells that have just been drilled, fixing wells that are not producing oil or gas, and abandoning wells that have stopped producing. According to the Canadian Energy Research Institute (CERI): an average well drilled to a depth of 2,300 meters generates approximately $1.65 million in economic activity, mainly covering labour and supply costs; each new oil or gas well drilled supports approximately 120 jobs including those directly employed by the energy industry, supplies and service sector; indirectly in other support industries, including hotels and restaurants; and induced jobs including those that provide supplies and services to the support industries; and one job in the oil and gas sector is supported by two jobs in other support industries, and the support industries are supported by 1.7 jobs in other industries. -30- Media inquiries may be directed to: Jason Chance Director of Communications Alberta Energy 780-422-3667 To call toll free within Alberta dial 310-0000. NOTE: Technical questions from industry or the financial community regarding these programs can be emailed to response.energy@gov.ab.ca Alberta Government | Newsroom | Ministries Listing | Energy Home Page | News Releases | Top of Page | Send us your comments or questions Copyright(©) 2009 Government of Alberta


http://www.ogj.com/articles/2017/05/orphan-well-association-due-alberta-loan.html

Orphan Well Association due Alberta loan
HOUSTON, May 19
05/19/2017
By OGJ editors 






The Alberta government is seeking legislative approval to lend the Orphan Well Association (OWA) $235 million (Can.) to accelerate work on oil and gas wells with defunct or insolvent owners.
The OWA operates as an independent, nonprofit organization under the delegated authority of the Alberta Energy Regulator. Most of its funding comes from the oil and gas producing industry, which currently provides $30 million/year. The industry contribution is to double in fiscal 2019-20.
Alberta Premier Rachel Notley said the loan “is about creating jobs and fixing a longstanding problem.”
In its latest inventory, OWA said Alberta last month had 1,411 orphan wells for abandonment, 1,125 orphan wells for suspension, 666 orphan sites for reclamation, and 1,764 orphan pipeline segments for abandonment.
OWA closed 185 wells last year.

According to the provincial government, Alberta has about 180,000 active wells, 83,000 inactive wells, and 69,000 abandoned wells.


Why are we paying the richest industry in Alberta in the form of an interest free loan to do it's own work of clean up of orphan wells? What are we? The Bank of the Elite and the Emperor/Empress Industry in Alberta? It's time that all of these groups got off the taxpayer teats and did their own liability work with their own cash and not ours. It's shameful.

A $235-million loan from Alberta, financed with $30-million from the federal government, is expected to create 1,650 jobs to clean up some old oil and gas wells.
NATIONALOBSERVER.COM

LikeShow more reactions
Comment


http://www.nationalobserver.com/2017/05/18/news/massive-taxpayer-loan-fund-cleanup-albertas-dirty-abandoned-oil-wells

Massive taxpayer loan to fund cleanup of Alberta's dirty, abandoned oil wells

By Colette Derworiz in News, Energy, Politics | May 18th 2017

#3 of 3 articles from the Special Report:Legacy of liabilities
Alberta Premier Rachel Notley and Energy Minister Margaret McCuaig-Boyd announce a loan for the cleanup of orphaned oil and gas wells near Carstairs, Alta. on May 18, 2017. Handout photo from the Government of Alberta
A $235-million loan to industry from the Alberta government will accelerate the cleanup of orphaned oil and gas wells across the province and get hundreds of people back to work in the next three years, says Premier Rachel Notley.
The announcement, made at the site of an orphaned well near Carstairs, Alta. attempts to address both environmental and economic issues with the old energy sites in Alberta.
“The number of orphaned wells in Alberta is a growing problem, a problem that has been made much worse by the collapse in oil prices,” Notley said Thursday. “We’re here today to help fix the growing orphaned well problem and create good jobs for Albertans at the same time.”
The loan, financed with a $30-million commitment from the federal government, is expected to create 1,650 new jobs in the province over the next three years. It will be paid back in the next 10 years by the Orphan Well Association, an industry-funded group that currently dedicates $30 million annually to clean up old wells.
There are almost 450,000 oil and gas wells across Alberta, with nearly a third now considered ‘abandoned’ or ‘inactive’ by industry.
No companies responsible
Orphaned wells, which are no longer producing and haven’t been properly sealed, are the biggest concern because they no longer have a company responsible for them and could pollute groundwater and soil.
“Our industry has experienced one of the most profound downturns in decades and continues to experience the fallout of the Redwater legal decision,” said Brad Herald, chair of the association. “This repayable loan will further help to accelerate the abandonment and reclamation of orphan wells in Alberta.”
The court decision in the case of a bankrupt Redwater Energy Corp. gave secured creditors priority over environmental cleanup of orphaned wells.Notley noted that the group had already agreed to double their annual contribution to $60 million, starting in 2019, so that money will instead be used to pay back the province’s loan.
“It allows us to do it at a time when the costs are lower and people are looking for the work,” she explained.
The Petroleum Services Association of Canada (PSAC), which originally proposed the idea to get unemployed oil and gas workers back on the job, said it’s a good move.
“We applaud the Government of Alberta for leveraging the federal funds to allow a greater number of sites to be decommissioned sooner rather than later, thereby creating more jobs” said Mark Salkeld, president and chief executive officer of PSAC.
Orphaned Wells, Oil and gas, Alberta, Orphan Well AssociationOrphaned wells like this one can easily pollute groundwater and soil, according to industry specialists and environmentalists. Photo courtesy of the Orphan Well Association




Welcomed by environmental leaders
It was also welcomed on the environmental front.
“These orphaned wells pose a significant environmental risk,” said Nikki Way, an analyst with the Pembina Institute who noted there are currently 2,084 orphaned wells.
Last week, the province announced that it would work with industry and others to find ways to better protect Albertans and the environment by improving the policies for the management of old oil and gas facilities.
Way said the Pembina Institute is encouraged by the province’s “parallel efforts to review and reform the existing, inadequate rules to address the root causes of orphaned wells in the first place.
“We’re hopeful that this effort will ensure that these liabilities don’t continue to grow and these wells are reclaimed before they become orphaned,” she added.
Notley said those issues will be addressed in an ongoing review of the issue, but suggested the loan is a good start.
“It’s a win for landowners, a win for our environment, a win for industry and a win for thousands of Albertans who will benefit from the good jobs that we are creating,” she said.
Notley added that it’s clear there’s a big liability — pegged at $30.5 billion by the Alberta Energy Regulator — with the old wells.
“There’s no getting by that,” she said. “The question is how do we get a handle on that in a way that is balanced and responsible. We look forward to making progress on that.”

 ***
And if it is not bad enough we are being scammed by the oil and gas industry plus our own government hires at all levels we have to listen to the spin of the oil industry puppets one of which is the premier of Alberta:


http://www.psac.ca/psac-applauds-government-of-alberta-for-loans-to-create-jobs-in-beleaguered-oil-and-gas-services-sector/


FOR IMMEDIATE RELEASE:
PSAC Applauds Government of Alberta for Loans to Create Jobs
in Beleaguered Oil and Gas Services Sector
Calgary, Alberta (May 18, 2017)– The Petroleum Services Association of Canada (PSAC) welcomes the announcement today by the Government of Alberta of a $235 million loan to the Orphan Well Association (OWA) that will accelerate the decommissioning of orphan wells and sites and get oilfield services workers back to work.
“PSAC is pleased that our intense advocacy efforts to help get our member companies and their employees back to work have come to fruition and applaud the Alberta government for using federal funds to create more jobs for our beleaguered sector,” said Mark Salkeld, President and CEO of PSAC.  “This loan will help ensure we can retain the skills and expertise needed for responsible development of our energy resources, and positively contribute to Alberta’s reputation as responsible stewards of the environment.”
PSAC has been advocating for such a loan by federal and provincial governments throughout 2016 following tens of thousands of layoffs and numerous bankruptcies from lack of work resulting from low commodity prices and plummeting capital investment in the sector during one of the worst downturns to hit this industry in decades that created devastating economic times for our members.
The oil and gas industry in Alberta is one of the very few, if not the only industry, that proactively takes responsibility for the orphaned sites of its peers that have gone bankrupt. This is accomplished through levies industry pays to the OWA by current energy companies with no interest in those sites.  With this latest downturn, insolvencies increased and therefore orphan sites too.  “What better way to deal with this situation than to provide a loan that will be repaid by industry through a well-established process that ensures these wells do not become the next generation’s headache and creates much-needed jobs for the services sector at the same time,” says Salkeld.
“It is also encouraging to know that governments have listened and understand the need to retain the critical skills and expertise that the services sector provides to Canada’s explorers and producers that is also exported globally.  Alberta will also benefit from the additional fuel and income taxes paid and the trickle-down effect of disposable income circulating throughout the economy.”
Today, we thank Premier Notley and the Government of Alberta for this loan to support jobs in this vital sector.

Photo courtesy of the Government of Alberta (license link)

The Petroleum Services Association of Canada (PSAC) is the national trade association representing the service, supply and manufacturing sectors of the upstream petroleum industry.  PSAC is “Working Energy” and as the voice of this sector, advocates for its members to enable the continued innovation, technological advancement and in-the-field experience they supply to Canada’s energy explores and producers, help to increase efficiency, improve safety and protect the environment.
– 30 –
PSAC Media Contact:
Mark Salkeld, President & CEO
Phone: 403.264.4195
Email: media@psac.ca





May 18, 2017

Alberta's oil industry to shoulder $235M government loan to clean up abandoned wells


An oil pump jack pumps oil in a field near Calgary, Alberta, Canada on July 21, 2014
The oil industry in Alberta will be on the hook for a $235 million government loan to clean up a rising number of oil wells abandoned by owners who have gone bankrupt, the province said on Thursday.
The loan, repayable over 10 years, will go to the government-run, industry-funded Orphan Well Association (OWA), which cleans up wells for which no party is legally responsible, Alberta Premier Rachel Notley said at a news conference.
The number of so-called orphan wells in Canada spiked after the 2014 oil price crash as layoffs swept the oil patch and companies went bankrupt. Alberta, which produces about 80 percent of Canada's crude, had more than 1,500 orphan wells in February, up from 26 in 2012.
The loan is lower than the $500 million an industry group asked for in 2016.
The OWA will double indefinitely its levies charged to all petroleum producers to a total of $60 million a year, starting in 2019, Notley said.
That, however, could be adjusted in the future based on how many orphan wells are left, said Brad Herald, OWA chairman and vice president of western Canadian operations for the Canadian Association of Petroleum Producers industry lobby group.
Notley said part of the loan, $30 million, comes from the federal government, which in this year's budget allocated $30 million to Alberta to stimulate economic activity and employment in the resource sector.
Cleaning up the wells will create 1,650 jobs over three years, she said.



No comments:

Post a Comment