Ottawa Announces $ 1.7 Billion In Aid For Oil And Gas Industry
The federal government will provide $1.7 billion to clean up orphan and inactive wells in Alberta, Saskatchewan and British Columbia, Prime Minister Justin Trudeau said this morning.
“Our goal is to create immediate jobs in these provinces, while helping companies avoid bankruptcy and supporting our environmental targets,” he said.
In Alberta alone, these investments will maintain 5,200 jobs.
“The wells, which are no longer in use, can be detrimental not only to our environment, but to people's health,” Trudeau told reporters. “Think of the farmer who can't grow anything on his land because of an abandoned well, a few steps away from his home. Think of the small town or Indigenous community struggling with this issue that has been festering for years or even decades.”
Cleaning them up will bring people back to work, and help many landowners who have had these wells in their property for years, but haven't been able to get them taken care of and the land restored, he said. “Our goal is to create immediate jobs in these provinces, while helping companies avoid bankruptcy and supporting our environmental targets.”
Another $750 million will be allocated to an Emission Reduction Fund with a focus on methane to create and maintain jobs through pollution reduction efforts. This includes $75 million to help the offshore industry cut emissions in Newfoundland and Labrador.
This fund will primarily provide repayable contributions to firms to make them more competitive, reduce waste and pollution, and most importantly, protect jobs, said Trudeau. “Right now, many, many energy firms are experiencing a cash crunch. So they don't have the funds to invest in technologies to reduce emissions or fix methane leaks,” he said. “Today's announcement will allow for this kind of work to be done and create jobs people need during this difficult time. Through the wells and methane initiatives, we estimate that we will maintain roughly 10,000 jobs across the country.”
The federal government also is working with the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to strengthen credit support for medium-sized energy companies that are particularly at risk. “Once again, the goal is to allow these companies to continue their activities in order to keep their employees.”
Asked by a reporter why his government wasn’t doing more for the sector, such as equity investment, Trudeau said the first thing it did was to move forward with the Canada emergency response benefit. That assistance, he said, is putting money in the pockets of more than seven million Canadians, including many people in the oil and gas sector who have lost their paychecks because of the COVID-19 crisis.
“On top of that, the wage subsidy allows Canadian workers to continue to receive their salaries to continue to stay connected to their work in the oil and gas sector which are significant helps for a major industry across this country.”
At the same time, Ottawa is doing other things that the government of Alberta has been asking it to do for some time, which is to clean up orphan water wells, said the prime minister.
It also has been working with the government of Alberta and with industry to look at other things that can be necessary, said Trudeau. “We heard very clearly that the methane regulations that we are bringing in will be a challenge for industries to meet.”
However, rather than back off on the regulations, the government decided to lend companies money to help them, to keep people working to upgrade and update their measures “so we can continue to fight climate change and reduce emissions while keeping people at work.”
Trudeau said his government also has heard very clearly, and not just from industry, but particularly from rural municipalities and landowners across Alberta, that the issue of persistent orphan or inactive wells is a real challenge. “This is an opportunity for us to make sure that Albertans are getting to work in cleaning up their province at the same time as we've gotten commitments by the government of Alberta, to strengthen the regulation so we see fewer orphan and inactive wells in the future.”
The government will continue to look at ways we can support important industries in this country, including the oil and gas sector, he said. “We look forward to doing that, while at the same time keeping our focus squarely on families and workers who need our help.”
- Service and Supply