Canadian Manufacturing

PSAC makes pitch for fed loans to help clean up inactive oil wells

The Petroleum Services Association of Canada asked for federal infrastructure money for oil well clean up, but now says a loan will work too


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Latest futures report includes a caution to investors and oil companies. Photo: iStock

“Loan us the money. Let’s get people to work,” says PSAC CEO Mark Salkeld. Photo: iStock

CALGARY—The head of an oilfield services lobby group says if Ottawa won’t give the industry money to clean up dormant oil wells, a loan would work just as well.

The CEO of the Petroleum Services Association of Canada says he has made a rejigged pitch to Ottawa and discussed it with federal Natural Resources Minister Jim Carr in Edmonton on Aug. 29.

The association asked the federal government earlier this year for $500 million in infrastructure funds to deal with Alberta’s 75,000 inactive wells.

The group argued the proposal would be a good way to put people to work in Alberta, where low oil and gas prices continue to inflict significant economic pain.

The idea never made it into this year’s federal budget and CEO Mark Salkeld says a big sticking point was that it is industry’s responsibility to plug and clean up wells that are no longer producing.

Carr is to speak to the Calgary Chamber of Commerce later today.

Salkeld said the amended proposal is getting some traction and the federal and Alberta governments are pressing for more details about how many jobs it would create. He said he’s also writing to western premiers to get their support.

Saskatchewan Premier Brad Wall also made a $156-million well cleanup pitch ahead of the March budget.

Salkeld said he sees how getting a federal “bailout” for something that is industry’s responsibility would be a tough sell. But he believes there are ways Ottawa can help get idle equipment working on well decommissioning.

“If you have issues with giving industry money… then loan us the money. Let’s get people to work,” he said in an interview.

The federal government would benefit from increased taxes plus whatever interest it would charge, Salkeld added.

“It’s a good solution and they are considering it.”

PSAC has 175 members representing 35,000 workers who provide a variety of services to oil and gas producers.


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