QUESTION PERIOD — Natural Resources
Dormant Oil and Gas Wells
February 21, 2022
Honourable senators, my question is for the Government Representative.
Senator Gold, in 2010 there were 700 orphan wells in my province of Alberta. By 2020, there were 8,600 orphan wells. Late last month, the Parliamentary Budget Officer tabled a report that examined the probable cost of cleaning up those wells and whether the federal government had allotted enough to their fund for well cleanup.
The PBO found that $556 million in federal funds had been allocated thus far to Alberta and that those funds had gone primarily to 10 large oil and gas companies, all of which were quite solvent and able to fund their own cleanups. In fact, almost one fifth of the total monies — more than $102 million — went to just one oil giant, Canadian Natural Resources Limited, or CNRL, a company that posted third-quarter net profits in November of $2.2 billion.
I asked the Parliamentary Budget Officer whether the subsidy had led to the accelerated cleanup of any inactive wells. He said they were unable to determine if CNRL or any of the other companies had actually cleaned up any more inactive wells than they might have done anyway.
So then I asked whether any of that $556 million had gone to cleaning up actually orphaned wells. I was informed by the Parliamentary Budget Office that not one single orphan well in Alberta — not one — had been cleaned up with this grant money of more than half a billion dollars.
So now I would like to ask, what exactly did we get for the $102.5 million we gave to CNRL, or the $18 million we gave to Cenovus, or the $16 million we gave to Husky or the $12 million we gave to Imperial Oil under the federal cleanup plan?
Two, what are we actually going to do to clean up the wells that are actually orphaned?
Thank you for the question. The issue is a serious one, and one that engages responsibilities of the province, which has ownership of the natural resources. It also engages, of course, the role of the federal government, that works with provinces to assist wherever it can and to provide funding where it can for those efforts.
The Government of Canada appreciates the work of the Parliamentary Budget Office and the report. I will certainly make inquiries as to your specific questions and report back in due course.
I’m just curious, if the fund was never designed to clean up orphan wells, why was it presented to Canadians as though that were its raison d’être?
Senator, I cannot comment on the assumption behind your question, but I certainly will make inquiries and report back.