Alberta’s Site Rehabilitation Program: The First Two Months

Jun 30, 2020

On May 1, the Alberta Government launched a $1 billion Site Rehabilitation Program designed to fund the cleanup of inactive wells and pipelines, as well as reclamation, restoration and environmental site assessments.

Now that the program has launched, many contractors may be wondering: is it working? Are they eligible? And what does the application process look like?

We’ve done our research to bring you the latest information.

What Is the SRP?

The Site Rehabilitation Program (SRP) is an Alberta initiative, with $1 billion coming from the federal government’s COVID-19 Economic Response Plan.

The SRP is intended both to support the province’s efforts to clean up orphaned or inactive wells — by one estimate, there are at least 158,000 of these in the Western Canadian Sedimentary Basin, with about 91,000 in Alberta — and to give a needed economic boost to Alberta’s oil and gas industry. The Government of Alberta expects the funding to create up to 5,300 new jobs, with other projections putting the number even higher.

SRP funding is available to oil field service companies in the form of grants that will cover between 25% and 100% of a project’s total costs, up to $30,000 per site. These grants are being dispersed over several application rounds. Companies that receive a grant will have until December 31 2022 to complete their project.

How Is the Program Looking, Two Months In?

With many oil and gas companies cutting back due to the current economic conditions, the SRP has proven extremely popular. The first two periods of funding were oversubscribed, with nearly 36,000 applications. As of June 26, over 26,500 applications had been reviewed, and $54.8 million in grant funding had been approved. According to the Alberta Government’s website, nearly 1,000 applications are being reviewed daily.

While the first two application periods were open only to projects that required 100% government funding, future rounds may be open to projects that are partially funded by producers.

With $100 million allocated to each of the first two funding periods, $800 million remains available, and the next application period is slated to open in July, once the current applications have been assessed.

So far, 122 Alberta-based companies have received funding.

Who Is Eligible?

Because of Alberta’s “polluter-pay” principles, licensees are not eligible to receive funding. Instead, funding is being awarded to oil field contractors who do phase 1 and phase 2 environmental work, and upstream oil and gas infrastructure abandonment work.

Eligible activities include:

closure work on inactive wells and pipelines
environmental site assessments (Phase 1 and Phase 2)
remediation
reclamation

Of course, these activities must be performed on sites within Alberta, and projects must hire Albertan workers. Residents of First Nations and Metis settlements can also nominate sites for rehabilitation.

Other requirements include:

following all laws, environmental regulations and workplace safety standards
having a valid, fully-executed contract with an Alberta oil and gas licensee with no ‘subject-to’ clauses

The Alberta government is especially interested in working with Indigenous businesses, and to that end they have appointed an Indigenous liaison to help those businesses navigate the application process.

How Can Contractors Apply?

The application process to receive funding from the SRP involves three main steps:

Review the Program Guidelines
Review the supplementary guidelines for the funding period during which you’re applying
Complete the online application

Online applications become available once the funding period opens, and only complete and accurate applications are considered.

Once an application has been reviewed, the applicant will be informed; if they are approved, they will be required to sign an agreement with the Government of Alberta. If they are declined, they will receive an explanation detailing the reasons. Contractors whose applications have been declined can reapply in future rounds.