The Alberta Site Rehabilitation Program: An Environmental Perspective
What is the Alberta Site Rehabilitation Program?
The Government of Alberta recently announced that $1.2 billion of the $1.72 billion in federal funding for the oil and gas industry will be distributed through the Alberta Energy as part of the Site Rehabilitation Program. This program is intended for oil and gas infrastructure abandonment and environmental work. The breakdown of the funding is: Alberta Orphan Well Association ($200 million), British Columbia ($120 million) and Saskatchewan ($400 million) and $1B for inactive infrastructure in Alberta.
This funding is one of the Government of Canada’s programs related to the previously announced COVID-19 Economic Response Plan for the Canada's Energy Sector, which also includes a repayable loan program administered by Natural Resources Canada to support greenhouse gas emission reductions for the oil and gas industry.
Waterline has documented the current status of the Alberta Site Rehabilitation program as of April 29, 2020 and will provide additional updates to this list of frequently asked questions, particularly after May 1st.
What are the Objectives of the Alberta Site Rehabilitation Program?
The primary objective of the program is to support job creation by completing “a high volume of environmentally-significant work”. Secondary objectives of the Site Rehabilitation Program appear to include:
Preventing additional oil and gas assets from being orphaned; and
Addressing the non-payment of landowners for surface leases from indebted oil and gas companies.
What Does the Alberta Site Rehabilitation Program Mean to Environmental Industry?
In addition to funding the abandonment of upstream oil and gas infrastructure, environmental work that will be funded includes: Phase I and II environmental site assessments (ESAs), remediation, and reclamation. Eligible expenses will include wages, equipment, laboratory analyses, mobilization costs, and other related supply costs and the program will be active for a period of two years.
The Alberta Government will pay eligible service providers directly for work completed at oil and gas facilities.
How Will the Site Rehabilitation Program Determine Whether an Oil and Gas Company is Eligible?
The funding levels will range from 25 to 100% of well abandonment and environmental activities, with higher percentages being allocated towards companies that are more leveraged. How the government will determine the percentage of funding is currently uncertain on April 29, 2020.
Can an Application to the Site Rehabilitation Program be Withdrawn if a Reasonable Proportion of Funding is not Covered by the Program?
The specific terms and conditions within the Site Rehabilitation program, such as whether an application can be withdrawn if reasonable funding is not covered, is important to consider. Waterline expects that additional details regarding these types of important decisions will be released during subsequent announcements.
Is the Limit of $30,000 per Site for the Site Rehabilitation Program too Low?
Waterline believes that funding will be staged, with the initial activities being focused on lower-cost programs, such as Phase I and II Environmental Site Assessments, followed by additional funding for higher-cost programs such as remediation and facility abandonment. It is expected that multiple applications can be submitted for the same site for different tasks.
What Government Programs have been Released Recently to Support the Upstream Oil and Gas Industry in Alberta Impacted by Oil and Gas Price Collapses and Covid-19?
In addition to the Site Rehabilitation Program that is financed by the Government of Canada and administered by the Government of Alberta, additional funding programs for the upstream oil and gas industry, and the environment in particular, have also included the following programs:
How Can Waterline Help Oil and Gas Companies Achieve their Environmental Goals?
Waterline has designed and implemented cost-effective environmental assessment and remediation programs for portfolios of sites with straight-forward to complex environmental issues. Waterline differentiates ourselves from many of our competitors by:
Focusing on quality deliverables that result in cost savings;
Always considering appropriate guidelines (e.g., Tier 2 and site-specific guidelines);
Automating many of our routine data compilation and reporting tasks to create accurate, consistent deliverables; and
Making informed recommendations using our technical expertise.
If you are interested in discussing the Site Rehabilitation Program and its effects on your company, please contact Waterline at email@example.com or 1-888-542-5611.