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Alta govt lends Orphan Well Association another $100 million

by Mark Sabourin
EcoLog, 3/6/2020 9:24:00 AM

The government of Alberta is lending the Orphan Well Association (OWA) another $100 million to accelerate the decommissioning of abandoned oil and gas wells and create roughly 500 direct and indirect jobs. Premier Jason Kenney, accompanied by Energy Minister Sonya Savage and OWA Executive Director Lars De Pauw, made the announcement at a media event on March 2, 2020.

The loan kicked off the release of Alberta’s “A Blueprint for Jobs”, the government’s job-creation plan that featured prominently in the 2020 Budget, presented February 27, 2020.

De Pauw said the OWA currently manages an inventory of approximately 6,500 sites — oil and gas wells and related infrastructure that do not have any legally responsible and/or financially able party to meet abandonment and reclamation responsibilities. De Pauw said the additional loan will allow the OWA to decommission approximately 2,000 wells, double the number it expects to complete in the current fiscal year.

The $100-million loan is on top of a previous $235-million interest-free loan made by the government to the OWA. The OWA began repaying that loan in 2019, using money received from industry through the annual Orphan Fund Levy.

Alberta and the OWA are currently finalizing specific loan terms and conditions, including establishing a repayment schedule. Both parties have agreed that the $100-million investment will be completed before April 1, 2021.

Savage said more change is on the way. The government will soon announce a complete set of lifecycle policies for the oil and gas industry that will cover wells from start to finish. It will include additional authority to OWA with respect to “the ownership and control, the sale, the management of their inventory, so they can be more efficient,” she said.

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