Americans are all too familiar with the tendency of fossil fuel and mining companies to extract public resources, turn them into huge profits, and then stick the public with the cleanup and restoration bill. It’s generally referred to as “corporate welfare”, or sometimes “corporate socialism.”
Canada is no stranger to this parasitic practice. In the province of British Columbia, the government is working to turn that shameful legacy into new restoration economy jobs.
Of about 25,000 oil and gas well sites in BC, approximately 357 are considered orphan. In addition, there are currently 7,685 dormant well sites in BC.
The decommissioning and restoration of oil and gas sites in BC is regulated by the BC Oil and Gas Commission (BCOGC), which last year developed a Comprehensive Liability Management Plan.
When a site is designated an orphan, the BCOGC can use the industry-funded Orphan Site Reclamation Fund to decommission and restore the land.
Restoration in action at orphan gas well.
The Province recently announced a new effort to grow jobs for BC workers in oil and gas service companies: they will clean-up the environment to help restart the economy.
“With the support of the federal government, BC is taking action to accelerate the restoration of more than 2,000 orphan and inactive wells,” said Premier John Horgan. “This program will support upwards of 1,200 jobs, helping BC workers, the environment and our economy during these challenging times.”
On April 17, 2020, the Government of Canada allocated $120 million for BC to support cleaning up oil and gas sites. Subject to reaching final agreement with Canada, the Province intends to invest this funding in three new programs:
The Dormant Sites Reclamation Program will provide $100 million to reclaim dormant oil and gas sites, which are wells that have been inactive for five consecutive years and are unlikely to be returned to service. This program will provide up to $100,000, or 50% of total costs, whichever is less.
The Orphan Sites Supplemental Reclamation Program will provide $15 million to reclaim orphan oil and gas sites where the operator is insolvent, no longer exists or cannot be located. This program will be administrated by the BC Oil and Gas Commission (BCOGC) and will be in addition to $27 million in planned BCOGC clean up of such wells for 2020-21.
The Legacy Sites Reclamation Program will provide $5 million to address the legacy impacts of historical oil and gas activities that continue to have environmental impacts, such as on wildlife habitat or on the traditional use by Indigenous peoples.
These programs will be open to oil and gas field service companies and contractors based in B.C., with registration, office and operations in B.C.
“Through these three programs, we are accelerating the cleanup of thousands of orphan and inactive wells,” said Bruce Ralston, BC’s Minister of Energy, Mines and Petroleum Resources. “This allows us to restore lands of important environmental and cultural relevance, while also supporting local jobs and local economies in B.C.’s northeast.”
Indigenous communities, local governments and landowners will be able to nominate dormant, orphan and legacy sites for priority consideration for decommissioning, reclamation or restoration.
“Thanks to the co-operation between the governments of Canada and British Columbia, this program will mean a cleaner environment and much needed jobs for workers in BC,” said Seamus O’Regan, Canada’s Minister of Natural Resources.
The news was greeted with enthusiasm by agency, non-profit and tribal leaders:
Chief Trevor Makadahay of the Doig River First Nation said “Doig River is pleased that the Province of B.C. is making steps to further manage the impacts of development on our territory through reclamation and restoration programs. We are committed to cleaning up our land base and look forward to exploring the opportunities these programs create for our band membership, our company Uujo Developments and our environmental partner Tervita Corporation.”
Chief Sharleen Gale of the Fort Nelson First Nation (FNFN) said “The Fort Nelson First Nation is pleased to hear the announcement from the B.C. government about the new dormant and orphan well restoration programs. This is a win-win for the oil and gas sector and the environment. It will bring much needed local employment for former oil and gas workers and clean up dormant, legacy and orphan wells. We look forward to continuing our collaboration with B.C. to reclaim old wells to the highest standards using innovative techniques that the FNFN and the BCOGC have been piloting over the past two years.”
Chief Ken Cameron of the Saulteau First Nations said “We have been working with B.C. and the BCOGC on developing new approaches to restoration, and we welcome new programs that will support reclamation projects and job creation. We are ready to share our traditional knowledge, technical expertise and project management skills. We believe that by working together with government and industry, we can create long-term sustainable economies and restore landscapes to their natural state, after oil and gas activities are completed.”
Chief Roland Willson of the West Moberly First Nations said “These funds can help restore some of the impacted areas of Treaty 8 territory and provide economic opportunities to West Moberly people.”
Elizabeth Aquin, interim president and CEO of the Petroleum Services Association of Canada (PSAC) said “The funding program announced today will provide much needed jobs for the oil and gas services sector companies that PSAC represents while also generating positive environmental outcomes. The services sector is instrumental in developing new technologies and innovation to improve environmental performance. PSAC is pleased that this funding aligns with our advocacy for a mechanism to close orphan and inactive wells to create jobs during this unprecedented downturn. This will also help to retain key skills and expertise for Canada’s responsible energy development and stewardship of the land.”
Karen Tam Wu, regional director, British Columbia, Pembina Institute said “Amid these difficult times, today’s announcement represents a welcome opportunity to get people back to work quickly and to take action on dormant, legacy and orphaned gas wells in British Columbia. Going forward, it’s essential to enforce the polluter-pays principle to prevent taxpayers from bearing the cost of future cleanup for these wells. Strengthening British Columbia’s liability management program could ensure the risks posed by neglected infrastructure doesn’t keep growing.”
Applications for the Dormant Sites Reclamation Program will be accepted beginning May 25, 2020.
Photos courtesy of BCOGC.
Learn more about the Comprehensive Liability Management Plan.