The government of Alberta announced Friday a $1-billion oil well site rehabilitation program that will start May 1.
The Site Rehabilitation Program is funded by the federal government’s COVID-19 Economic Response Plan, which was announced last Friday. Alberta’s energy minister said the province will “administer” the funds.
Last week, Prime Minister Justin Trudeau committed $1.7 billion in federal cash to clean up orphan wells in British Columbia, Alberta and Saskatchewan to keep people working during the COVID-19 pandemic.
The program will provide grants to oilfield service contractors to perform well, pipeline, and oil and gas site reclamation work, the province said.
Minister Sonya Savage said it’s primarily about job creation and also about cleaning up environmental liabilities.
The province estimates the program will create 5,300 jobs “immediately.” She said she expects work to start in May.
This program will first focus on providing grants to service companies that have been significantly impacted by the unprecedented economic downturn. The program will provide funds in $100-million increments.
“It’s to create jobs and immediately get Albertans back to work,” Savage said. “We can do this while addressing important cleanup efforts.”
The work will be done in Alberta, Savage said, and the money will go “where it’s needed most… Alberta’s oilfield contractors,” who have been particularly hard-hit in recent years.
The Site Rehabilitation Program will provide grants of between 25 and 100 per cent of total project costs – depending on the ability of the oil and gas company responsible for the site to help pay for cleanup – and will be paid directly to the oilfield service company completing the work, the government said.
Companies and contractors can apply online at alberta.ca/siterehab starting May 1.
The Opposition welcomed the federal support to clean up inactive oil and gas sites, saying it will put Albertans back to work and support the oil and gas sector.
“I hope Premier Kenney and the UCP have further plans to support the energy sector and the women and men who work in it,” Irfan Sabir, NDP Energy Critic, said in a news release.
“And in the future, I hope they take the opportunity to enforce the polluter pay principle and ensure that municipalities and landowners are properly compensated.
“We also must not forget that other sectors of Alberta’s economy have been hit by the oil price collapse and the global pandemic and deserve the support of this government,” Sabir said.
“As we look to the near future, and begin plans to recover from this crisis, we must have an aggressive and robust plan to diversify our economy and protect against boom and bust cycles.”
The announcement comes after the benchmark price for U.S. oil dipped below $0 for the first time ever earlier this week. That, coupled with the COVID-19 pandemic, has been a major blow to the province’s economy.
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Alberta has taken steps amid the pandemic officials say will keep people working. Late last month, the Alberta provincial government agreed to invest about US$1.1 billion as equity in the Keystone XL pipeline project, substantially covering planned construction costs through the end of 2020.
Keystone XL
Premier Jason Kenney provided an update on Keystone XL and the province’s “historic investment” in the pipeline project.
He said it “now has shovels in the ground” in Alberta, Saskatchewan and the U.S.
That means work will be “moving now, in this construction season, and throughout 2020.”
Kenney said TC Energy installed the pipe in Montana and in Saskatchewan.
He expects this project will create 7,000 jobs this year alone and will be done in spring or summer of 2023.
Cost-sharing programs with feds
The provincial government also announced it would be partnering with the federal government on several other initiatives.
Kenney said Alberta would be cost-sharing with Ottawa for the emergency commercial rent assistance program for small- and medium-sized businesses, as well as the temporary salary top-up program for certain essential service workers.
He said it would apply to the health care aides working in continuing care facilities, for which Alberta previously announced a $2/hr wage top-up.
The new Canada Emergency Commercial Rent Assistance (CECRA) program provides 50 per cent of monthly commercial rental costs. Eligible landlords and tenants would each be responsible for 25 per cent of the remaining costs.
To qualify, small businesses have to pay less than $50,000 in rent, been asked to close or near-close their operations due to the pandemic, and have experienced at least a 70-per-cent decrease in revenues.
“Jason Kenney’s announcement that he will pay into Ottawa’s small business plan comes with some serious pitfalls,” NDP Leader Rachel Notley said.
“We know tens of thousands of small businesses have been forced to close their doors, and they need urgent help to cover the cost of rent. Yet, small businesses are only eligible for rental assistance if they have lost 70 per cent of their revenue, meaning thousands of struggling entrepreneurs who have seen a significant loss of business – 40, 50, 60 per cent of their revenues – won’t get any support.
“Jason Kenney should stop letting Ottawa take the lead, step up for small businesses, and expand commercial rental assistance to all small businesses that are experiencing hardship in the face of COVID-19.”
New representative in Washington
Premier Jason Kenney also announced former MP James Rajotte will serve as Alberta’s new senior representative in Washington, D.C.
Rajotte, who’s from Edmonton, will be a voice for Alberta to “policy makers at both the national and state levels, as we explore North American energy security and deal collaboratively with threats to our markets from overseas.”
Kenney said it is essential that Alberta has strong relationships with policy makers in the U.S. right now.
“Alberta exports to the U.S. a total of more than $100 billion, nearly 90 per cent of Alberta’s exports to the world.”
Rajotte will also help Alberta recover post-COVID-19, the premier said.
“As chairman of the House of Commons Finance Committee during the global financial crisis, he has first-hand experience dealing with a crisis like the one we are in. Mr. Rajotte has deep and long-standing connections in the U.S. Congress and a tremendous understanding of the critical issues Alberta is facing.”
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