Alberta energy minister keen on industry group's well cleanup proposal

Alberta's energy minister says she's keen on a proposal to use federal infrastructure funds to speed the cleanup of inactive oil and gas wells.

The Petroleum Services Association of Canada (PSAC) made the $500-million pitch to Ottawa earlier this month, a move the group says would help put people in the ailing industry back to work.

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"All the services that we currently have with respect to completing and maintaining these wells are available and they're currently not working as much as they'd like to," said Mark Salkeld, president and CEO of the Petroleum Services Association of Canada.

"So if we could start decommissioning these wells, we could put people back to work, retain that talent and keep things going."

Marg McCuaig-Boyd agrees it would create a lot of jobs in fairly short order and notes there's precedent for such a measure in Alberta.

Not a 'bailout'

While Alberta has a polluter pay policy that makes companies responsible for well decommissioning, McCuaig-Boyd says the province also has big economic problems.

Salkeld told the Calgary Eyeopener there are about 77,658 wells that need to be decommissioned, and each could cost an average of $100,000 to $300,000.

"We started drilling over 130 years ago and we have been decommissioning the wells for a number of years, but we're getting to a point where the number of wells being drilled are less than the number of wells that need to be decommissioned," he said.

Salkeld stressed that PSAC's proposal isn't a bailout. 

"We're in no way saying that oil companies aren't responsible," he said. "They are and they fully accept that. The regulations have increased and the costs have increased. Right now there ... isn't enough cash flow in the system to do all the wells that need to be done."

He said the money from the government could go towards royalty credits or personal tax credits to allow industry to offset the costs of decommissioning. 

In a speech at an energy conference in Calgary, McCuaig-Boyd also touched on pipelines, saying the NDP government is taking a calm and strategic approach to the heated issue.

She says without a pipeline to the West Coast, the industry will slow down and have lower demand for the electricity British Columbia wants to sell to Alberta.

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With files from the Calgary Eyeopener