(Adds updated federal comment)
By Ethan Lou
CALGARY, Alberta, March 7 The Canadian province
of Alberta may get federal aid to help clean up the rising
number of oil wells whose owners have gone bankrupt, with
federal officials acknowledging the relevant provincial agency
lacks sufficient funds.
Alberta Premier Rachel Notley told reporters late Monday in
Houston that she expects to have "something to announce on that
in the weeks to come", without giving details.
The number of so-called orphan wells in Canada spiked after
the 2014 oil price crash as companies went bankrupt, prompting
provincial officials and industry to seek federal help for
remediation. If not cleaned up, old wells can contaminate soil
and affect animal and human health.
When asked about Notley's comments, the federal Natural
Resources ministry said it is continuing to meet with regional
authorities. Last week, ministry spokeswoman Tania Pereira said
the government is reviewing proposals but noted orphan wells are
legally a provincial responsibility.
While Canadian federal officials have been publicly mum on
the subject, in private they have deemed that "underfunded"
provincial orphan well programs do not have enough money to
properly carry out their tasks, according to two 2016 internal
Natural Resources briefing notes seen by Reuters.
The federal government has been giving scientific and policy
advice to industry and provinces, according to one briefing note
provided to Natural Resources Minister Jim Carr in August last
Alberta, which produces about 80 percent of Canada's crude,
has more than 1,500 orphan wells, up from 26 in 2012.
It was unclear what specifically the potential further
federal help would be. In a legislative speech outlining its
priorities last week, the Alberta government said it will work
"with Ottawa to create good oilfield service industry jobs" to
tackle the orphan wells issue.
Mark Salkeld, who heads the Petroleum Services Association
of Canada, had proposed a C$500-million ($374.6 million) federal
loan to the industry-funded Orphan Well Association (OWA), and
he said Ottawa has been looking favourably at it.
"We're getting a positive signal," said Salkeld, who had
been in contact with federal and provincial officials on the
issue. "All parties think it's a good idea."
Meanwhile, the OWA said it might need more funding in the
future, and that increasing industry levies is an option.
"(Higher) costs are not regarded favourably, but ... we've
got to step up," said OWA Chairman Brad Herald, who is also vice
president of western operations for the Canadian Association of
Petroleum Producers industry lobby group.
($1 = 1.3349 Canadian dollars)
(Additional reporting by Liz Hampton in Houston; Editing by
David Gregorio and Lisa Shumaker)