Government of Canada Invests in Emissions Management and Cleaning Orphaned Oil Wells Amidst COVID-19
Updated: May 24
Throughout the COVID-19 pandemic, major industries have experienced massive economic losses due to physical distancing measures and shutting down of non-essential services. Notably, the Canadian oil industry has been facing significant financial struggles. Due to shelter in place orders and self-isolation measures, decreased travel has reduced the demand for oil, with prices dropping 65% from January 6th to March 20th, 2020 (1).
As part of Canada’s response to COVID-19, the government has provided financial support to citizens and permanent residents, small businesses, and industries (2). To support the energy industry, the government has recently committed $1.7 billion to cleaning abandoned oil and gas wells in collaboration with the Government of Alberta, Saskatchewan, and British Columbia (2). In addition, the Federal government has collaborated with the Alberta Orphan Well Association, who work closely with the Provincial government to alleviate the environmental risks stemming from the energy sector (2, 3). It has been reported that this collaboration has created or saved 5,200 jobs for Albertans (2).
Along with this $1.7 billion investment, the Government of Canada has also committed $750 million for a new Emissions Reduction Fund (2). This fund will support companies and workers exploring green technology, focusing on reducing emissions of harmful gases, particularly methane (2). This new Emissions Reduction Fund contributes to the goal of reducing methane emissions by 45% by 2025, set by Canada’s energy sector (4).
Following the announcement of this funding, Tim MacMillan, the President and CEO of the Canadian Association of Petroleum Producers (CAPP), released a statement acknowledging the government’s assistance to the energy sector, which you can read here. Due to the financial struggles currently being experienced by the oil industry, the CAPP turned to the government hoping for leniency of environmental restrictions (5). The solution provided was to provide financial support for workers in the oil and gas industry, while also working towards Canada’s environmental goals (5).
Overall, the Government of Canada has provided support to the energy sector while considering environmental implications through investing in abandoned oil wells and emission reductions.