Prime Minister Justin Trudeau announced Friday the federal government would spend $1.7 billion on cleaning up abandoned oil and gas wells in Alberta, Saskatchewan and British Columbia.
He also announced a $750 million Emission Reductions Fund, including $75 million to help the offshore oil industry.
The Canadian Association of Petroleum Producers (CAPP) said the announcement is welcome news.
Reducing environmental liabilities is a priority for the oil and natural gas industry and this initiative will allow important work to accelerate, while supporting thousands of jobs, it said.
“The government also announced a $750 million emissions reduction fund which will help companies continue their progress to reduce methane emissions. Canada’s oil and natural gas industry has committed to a 45 per cent reduction of methane emissions by 2025, and the government is helping ensure that innovation and progress in this key area can continue during the economic crisis,” said Tim McMillan, President and CEO of CAPP, in a statement.
“We are also encouraged by news that the government is working with the Business Development Bank of Canada and Export Development Canada to strengthen support for corporations who are most at risk. Liquidity is a real and immediate challenge for oil and natural gas producers and CAPP has been working with the federal government to identify urgent action needed to address the dire situation. We are awaiting additional details on the expansion of support — a critically important matter as companies try to weather the current crisis.
“CAPP will continue to talk with all levels of government to ensure adequate support is in place to help businesses and jobs survive this unprecedented economic crisis. Survival of the energy sector will be crucial to Canada’s economic recovery.
Alberta Premier Jason Kenney said how the country comes through this economic crisis will depend in large part on the survival and the successful recovery of our country’s largest industry – the energy sector – on which some 800,000 Canadian jobs depend.
“We thank the federal government for taking this important first step to support the folks who work in our energy sector. The $1 billion partnership to address inactive wells aligns with Alberta’s commitment to ensuring our resources are developed in an environmentally sustainable fashion. This funding will immediately save or create thousands of jobs, keeping energy service companies going during these devastating times. It will also help us bring sites back to their original condition, leaving a cleaner environment for future generations. The $200 million loan to the Orphan Well Association will also help these efforts, demonstrating our commitment to producing Canadian energy under the world’s highest environmental standards,” he said in a statement.
“More support is needed to deal with the crisis in Canada’s energy sector, but this is a great first step. Our energy sector is facing its biggest challenge ever, and we need to be sure that industry can access the capital it needs to survive and thrive in future years. When the auto sector and the banks were threatened during the global financial crisis a decade ago, the economic strength of Alberta, powered by the energy industry, ensured that Canada was able to provide the urgent support they needed. We will continue to work with the federal government to ensure that the energy sector now gets the support it needs as it faces its own threats from both the COVID-19 pandemic and the Saudi-Russia price war.
“This unprecedented disruption in the world energy markets will eventually recede. Better times for the industry are a matter of when – not if – but only if the industry survives the next couple of years. We need to make sure Alberta is prepared and ready for the global recovery when the time comes. Alberta’s energy industry is the lifeblood of our provincial economy – and the largest subsector of Canada’s economy, as well as one of its biggest employers. The energy sector helps some of our country’s most important industries thrive, including health care, manufacturing and transportation.”
The Business Council of Alberta said it has been advocating for this program, which is a win-win that will keep thousands of Albertans working in some of our hardest-hit industries, while also improving the environment.
“Additional support for midcap companies announced today is essential. However, considerable support is still needed, specifically liquidity, for some of Canada’s most significant energy companies and airlines. The scope of this total need is an order of magnitude bigger, $15-30 Billion, to protect critical components of essential services and some of the largest subsectors of Canada’s national economy,” said the Council
“The innovation sector has until now fallen through gaps in many federal programs. Today’s announcement of $250M in support for this sector is positive, not least because of the critical role of innovation in reenergizing the economy and enabling other industries.”
