Alberta Energy Minister keen on industry group’s well clean-up proposal

A pair of pumpjacks pump oil from an old well on a farmer's frozen field in a Pembina oil field near Pigeon Lake, Alta., in 2012. (Norm Betts/Bloomberg)
A proposal to use federal infrastructure funds to accelerate the cleanup of inactive oil and gas wells in Alberta – with the aim of spurring employment in the ailing industry – has the thumbs-up of the province’s Energy Minister.

The Petroleum Services Association of Canada announced Monday that it made the $500-million pitch to Ottawa earlier this month. The sum would cover a small fraction of the work needed to decommission the 75,000 wells across the province that are no longer producing.

“Good on them,” Energy Minister Marg McCuaig-Boyd said of PSAC’s move.

“That is one way to get Albertans back to work in the interim and it isn’t unprecedented,” she told reporters after speaking at an energy conference in Calgary on Tuesday.

McCuaig-Boyd referred to the Alberta government’s $30-million contribution to the province’s orphan well fund during the last downturn in 2009.

While Alberta does have a polluter-pay policy that makes companies responsible for well decommissioning, McCuaig-Boyd says the province also has big economic problems.

“I think we could put a lot of folks to work in a fairly quick time (with the federal money) because the skills are out there right now and it is an issue that needs to be dealt with,” she said.

“It will provide some jobs. No solution is going to provide jobs for everybody, but we need to look at how we can get as many Albertans back to work as we can.”

The Saskatchewan government made a similar federal pitch last month.

That province’s proposal would cost Ottawa $156-million and would generate an estimated 1,200 jobs over the next two years.

Saskatchewan Premier Brad Wall said he’s not heard back from Ottawa yet on his proposal, but that he’ll be watching next week’s federal budget “very, very closely.”

“We’re hopeful (the PSAC ask) helps . . . provide some momentum to our request and that the federal government would indeed go with our request,” Wall said in a phone interview during an election campaign stop in Saskatoon.

Meanwhile, in her speech, McCuaig-Boyd touched on pipelines, saying the NDP government is taking a “calm and strategic” approach to the heated issue.

“We will get nowhere by beating our chests and shaming people into getting what we want,” she said. “That strategy has been tried in the past here in Alberta and federally and, to be honest, it’s failed miserably. Instead, we are taking a different approach.”

She said without a pipeline to the West Coast, the industry will slow down and have a lower demand for the hydroelectric power British Columbia wants to sell to Alberta.

“There’s a little give and take needed,” said McCuaig-Boyd, who added that she has not yet had the chance to broach the topic with her B.C. counterpart.

“If we don’t get the pipelines we’re not going to need as much power, so it’s plain and simple.”