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Orphan Wells Funding Draws ‘Significantly Higher’ Interest Than Expected

The federally-funded program to help clean up thousands of abandoned oil and gas wells left behind by delinquent fossils received nearly 18,000 funding applications from 530 companies in its first four days online, prompting Natural Resources Minister Seamus O’Regan to declare the level of interest “significantly higher” than governments expected.

The C$1.7-billion program included dollars for the three western provinces, $1.2 billion headed for Alberta, and $1 billion of that total earmarked for the Site Reclamation Program, Global News reports. By the end of the day Monday, May 4, the program had “seen significant uptake by oilfield service companies to remediate inactive and abandoned wells,” said Kavi Bal, press secretary to Alberta Energy Minister and former pipeline executive Sonya Savage.

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The program is expected to create 5,200 jobs for oilfield service workers hit hard by more than five years of low oil prices, capped by a brutal oil price war and the subsequent coronavirus crash. Global recalls that Premier Jason Kenney was laudatory when the federal government announced the funding in mid-April.

“This funding will immediately save or create thousands of jobs, keeping energy service companies going during these devastating times. It will also help us bring sites back to their original condition, leaving a cleaner environment for future generations,” he said at the time.

Now, though, the fossil lobby is renewing its demand for $27 to $30 billion in additional “liquidity” support and tax breaks from Ottawa. While the orphan wells fund is a “welcome start,” said Ben Brunnen, vice-president for oilsands fiscal and economic policy at the Canadian Association of Petroleum Producers, “there’s an urgent need for additional measures for the oil and gas industry.”