Brian Zinchuk is editor and owner of Pipeline Online
Eagle Sky Ventures was one of the service rig companies that has taken part in the Accelerated Site Closure Program. This is one of their rigs, however, in this case, this was not a site closure, but another project. Photo by Brian Zinchuk
REGINA – When COVID-19 initially took hold in the spring of 2020, the oilpatch ground to a near-halt. Oil prices collapsed to the point where, for one day, they actually went into negative territory. Capital spending was being cut to next to nothing. Wells were being shut in all over the place. Anyone who could store their oil, did so, because there was little point in giving it away for next to nothing. Work for the service sector, which provides the bulk of employment in the oilpatch, had essentially dried up, with enormous numbers of people laid off. No one knew when those jobs would be coming back, or if the companies would survive long enough to bring them back.
There was a call for federal funds to help out the industry in some way. That soon crystalized into a federally-backed, provincially-run program to abandon and clean up well and facilities that are no longer economic. It was a way to get at least some of the sector back to work again, and clean up old wells in the process, making it an environmental program, too.
In Saskatchewan, that program became the Accelerated Site Closure Program (ASCP). On Dec. 20, Government of Saskatchewan announced the third and final phase of the program, with the allocation of an additional $55 million in funding to eligible companies.
“In its first 18 months, this program has been very successful and created high-quality oil and gas service sector jobs,” Energy and Resources Minister Bronwyn Eyre said in a release. “More than 575 Saskatchewan-based companies have carried out over 5,500 well site reclamation and remediation projects across the province. That’s a great achievement.”
Alberta got the bulk of the funding, with $1 billion allocated for its Site Rehabilitation Program.
In Saskatchewan, the, the ASCP was launched in May 2020 to provide up to $400 million in federal government funding through the COVID-19 Economic Response Plan.
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The Ministry of Energy and Resources noted, “The ASCP supports Saskatchewan-based oil and gas service companies to conduct abandonment (clean-up) and reclamation work of inactive oil and gas well sites and facilities across every oil and gas producing region of the province. The program is managed by the Ministry of Energy and Resources and delivered in partnership with the Saskatchewan Research Council.”
“Addressing the climate crisis and protecting our environment are priorities for the Government of Canada,” said federal Minister of Natural Resources Jonathan Wilkinson. “Through the Accelerated Site Closure Program, we have provided more than $1.7 billion for Alberta, British Columbia, and Saskatchewan to clean up inactive and orphan oil and gas wells, sites which are major contributors to Canada’s greenhouse gas emissions and frequently the source of local pollutants. I welcome the final phase of the program in Saskatchewan. It has helped address environmental impacts from the oil and gas sector, created good jobs for thousands of workers, allowed for the identification of further inactive or orphaned sites, and provided opportunities for communities across the province.”
As of November 30, 2021, $316 million in contracts have been issued to companies to engage Saskatchewan-based service workers in site closure work. More than $152 million has been paid for work already completed under the program, including 3,100 well abandonments, 830 flowline abandonments, 25 facility decommissions, and more than 5,500 site remediation and reclamation activities.
Regionally, the funding for work packages disbursed across oil and gas producing regions of the province includes:
- Estevan: $107 million
- Swift Current: $51 million
- Kindersley: $50 million
- Lloydminster: $108 million
The Ministry said there has also been strong participation in two affiliated provincial programs, the First Nations Stewardship Fund and the Indigenous Business Credit Pool, which were announced in January 2021, and developed in partnership with the Saskatchewan First Nations Natural Resource Centre of Excellence and the program’s Indigenous working group. They are administered by the Centre of Excellence in collaboration with the Ministry of Energy and Resources, SaskBuilds and Procurement and the Saskatchewan Research Council.
As of November 30, 2021, the ASCP has issued $22.5 million in work packages on reserves, including $18 million under the First Nations Stewardship Fund. The Indigenous Business Credit Pool has provided roughly $8.5 million in funding for Indigenous oil and gas service companies.
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