Alberta unveils process for paying out $1 billion in oilfield cleanup grants

Oilfield services companies in Alberta will be able to apply through an online portal starting May 1 for $1 billion in grants under the oilfield rehabilitation program announced by the federal government last week.

The funds will be doled out by Alberta Energy in $100-million increments with an initial focus on service companies that have been most impacted by the current economic downturn, said Energy Minister Sonya Savage.

“First and foremost, this program is about job creation. It’s about getting Albertans back to work and getting them back to work quickly,” she said on Friday.

The grants will cover between 25 and 100 per cent of project costs depending on the ability of the oil and gas company responsible for the site to help pay for cleanup, and will be paid directly to the oilfield service company completing the work, Savage said.

About 5,300 jobs are expected to be created in Alberta, she said, adding the government expects the process to be quick enough that some of those jobs will begin before the end of May.

Dispersing the money as a grant instead of a loan violates Canada’s and Alberta’s polluter pay principles, said Regan Boychuk, co-founder of the Alberta Liabilities Disclosure Project, a group critical of how the province deals with oilpatch remediation liabilities.

“By releasing $1 billion in Canadians’ tax dollars as grants not loans to industry, the Alberta government is bailing out oil and gas companies that have profited from our public resources, but now refuse to adequately fund their own cleanup,” he said.

Job creation and environmental benefits would be much more significant if the money was leveraged through loans, Boychuk added.

The first $100 million of grant money is to be available for eligible work anywhere in the province with a cap of up to $30,000 per application.

A second increment will focus on sites where the government is covering lease payments to landowners because the oil and gas company can’t or won’t meet its obligations, again with a $30,000 cap.

Future increments may be made available for larger projects or for specific regions.

The federal government announced a total of $1.7 billion to clean up wells in Alberta, Saskatchewan and British Columbia, as well as $750 million in loans to help cut methane emissions.