The Alberta Government announced Thursday that hundreds of millions of dollars would be lent to the oil and gas industry, in an effort to clean up orphaned wells in Alberta.
Premier Rachel Notley and Energy Minister Marg McCuaig-Boyd made the announcement at a site near Carstairs Thursday morning.
Over time, wells have been abandoned as companies operating them go bankrupt, leaving no one responsible for the cleanup.
The province said the $235 million loan to the Orphan Well Association (OWA) would allow the industry to clean more wells more quickly, and it would create 1,650 jobs over the next three years.
“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 in the services section at the same time,” Mark Salkeld, with the Petroleum Services Association of Alberta, said Thursday.
The province said there are an estimated 180,000 active wells, 83,000 inactive wells and 69,000 abandoned wells in Alberta – and as of March 2017, the OWA said they had an inventory of 2,084 orphaned wells to go through closure (that’s 1,394 to be abandoned, and 690 to be reclaimed).
In 2016, the OWA closed 185 wells.
The Federal Government has also contributed $30 million to cover interest.
Industry is expected to pay back the loan over ten years. The work is expected to start this summer.