Alberta to Return $130 of Federal Funding for Well Cleanups

abandoned oil well

The Alberta provincial administration may be required to repay $130 million in unused funds to the Canadian government after failing to use the money for the cleanup of abandoned oil and gas wells.

This money came from the 2020 government’s $1.7-billion program created to reduce the environmental impact of deteriorating oil and gas infrastructure, and also to create employment opportunities in the afflicted energy services industry after the COVID-19 pandemic and the drop of oil prices.

From this funding, B.C. was allocated $120 million, Alberta was granted $1 billion dollars, and Saskatchewan was given $400 million. Additionally, the Orphan Well Association in Alberta was given a $200 million loan to help with the cleanup of abandoned wells when companies become bankrupt.

At first, the Alberta initiative encountered difficulties due to the massive number of requests that the government could hardly manage. Ultimately, a great number of projects were given the green light, enabling all of the federal money to be used up.

Some of the allocated funds have yet to be used as the approved clean-up activities were not carried out. There was no particular explanation given by the government as to why.

According to CBC News, the provincial government of Alberta has confirmed the estimated return of around $130 million.

The government’s website shows that in the three years since the funding was given, Alberta approved 37,589 requests, yet 3,445 of them were not completed.

“A few other ministers and I have written to the federal government to keep the left-over funds here in Alberta. We are still awaiting a response,” said Energy Minister Pete Guthrie.

The Alberta Energy Regulator has reported that there are a large number of inactive oil and gas wells across the province, which could lead to soil and water pollution, as well as the release of methane gases, posing a threat of environmental damage.

So far, the federal government has reported that they have created over 7,135 jobs in British Columbia, Alberta, and Saskatchewan and that they have attended to more than 49,000 wells.

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Written by Olivia Woods

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Credit: AER

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