The Alberta government has said it will work “with Ottawa to create good oilfield service industry jobs” to tackle the increasing number of orphan wells. Alberta produces about 80 percent of Canada’s crude and currently has more than 1,500 orphan wells, up from just 26 in 2012.
The number spiked after the 2014 oil price crash as companies went bankrupt, prompting provincial officials and industry to seek federal help for remediation. If not cleaned up, old wells can contaminate soil and affect animal and human health.
Alberta Premier Rachel Notley, in Houston for CERAweek, told reporters that she will have “something to announce on that in the weeks to come,” but gave no details. The Petroleum Services Association of Canada had proposed a $500-million federal loan to the industry-funded Orphan Well Association.
Meanwhile, the Petroleum Services Association of Canada has told Canadian Press: “Our members are looking for labour to get some more crews going. It’s optimistic right now,” according to Mark Salkeld, president and CEO.
“Not quite the numbers we had for a few years but at least picking back up again. We’re just kind of keeping our fingers crossed that we can get certain levels to continue through Q2 and Q3. “It’s picking up on the drilling and the completion side, without a doubt,” he added.
Between 2014 and 2017, the number of total rigs operating in Alberta dropped from 565 to 450, a decrease of nearly 20 percent.
Industry analysts expect oil prices to hover around US$50 to US$55 a barrel this year, meaning there will be increased stability in the energy industry in 2017 and an expected end to the recession. However, unemployment is likely to remain high in the near term.
Meanwhile, the Canadian Association of Petroleum Producers estimates that the Canadian energy sector will spend $44 billion in 2017, a little more than half of what it spent at the peak in 2014, when the oilsands were booming.