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How Alberta could give old oil wells new life — but it has nothing to do with crude – CBC.ca

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There are tens of thousands of dormant oil and gas wells sitting idle across Alberta — an inventory the province wants to shrink in the coming months with the help of $1 billion from the federal government.

But as Alberta implements its strategy for cleaning up orphan and inactive wells this week, there are calls for the provincial government to also look at using some of the funds to provide new opportunities for some sites. 

Advocates say infrastructure like wellbores, roads and pad space that could find other energy uses, including geothermal, micro-solar, hydrogen, recovery of lithium, or carbon capture and storage. 

“There’s a broader opportunity that could also be leveraged at the same time — that’s something that we really don’t want to miss,” said Marla Orenstein, director of the natural resources centre at the Canada West Foundation.

Alberta is rolling out its plans this week for cleaning up old well sites across the province, creating thousands of jobs. (Orphan Well Association)

“There’s a subset of those sites, a rather large subset, that are really good candidates for … other energy purposes.”

Alberta has nearly 3,000 orphan wells, oil and gas wells that haven’t been remediated by their often-bankrupt owners. There are more than 90,000 inactive wells, which remain in corporate hands but sit idle for economic reasons.

This month, Ottawa announced it would provide Alberta with $1 billion to help clean up those sites, including a $200-million loan to the Orphan Well Association, an industry-funded group that cleans up orphaned infrastructure.

The provincial government has since announced oilfield services firms will be able to apply through an online portal starting Friday for grants under the oilfield rehabilitation program.

Orenstein said the money — and the jobs the work will create — is a good start. But she says there’s also an opportunity to innovate and do more with some, not all, of the sites.

“If we can figure out how to direct that money toward not just reclaiming but also re-purposing, we’ll provide a real advantage to the province and the country,” she said.

Provincial program launches May 1

Nothing in the plans that the province has announced so far includes funds for re-purposing sites. The focus has been on cleaning up the sites and, in doing so, putting thousands of people back to work quickly.

Tristan Goodman, president of the Explorers and Producers Association of Canada, agrees with the focus, saying the vast majority of the funds should go to the clean-up work that was at the core of Ottawa’s announcement.

But Goodman agreed there is potential in re-purposing older wells for geothermal in some circumstances, adding he wouldn’t object if a small amount of funding was used to do more work in that area.  

“There has been work done in the past in Alberta that has found there is limited opportunity for that — not in a negative way — but they found there definitely is opportunity,” he said. 

“But it’s not as simple as every well will be a geothermal candidate.”

Supporters of re-purposing dormant wells certainly believe it’s worth investing some of the funding to exploring a variety of options for the old well sites.

Juli Rohl, a longtime advocate for re-purposing old sites, said doing so could help create additional revenue sources for the economy.

“If you could actually leverage some of that funding that looks at how much do you need to reclaim a site in order to be able to re-purpose it for future uses, … then you could actually develop projects,” she said. 

One of the easiest examples is how an old site could be used for solar projects, Rohl said, as it may already have the road access, the lease, a gravelled site and the nearby power lines to tie into.

But there are challenges.

Rohl said one of the big ones has been questions of liability at these old sites.

That’s always been sort of a legal challenge to all of this,” said Rohl, who works for the Energy Futures Lab.

“These startups that are doing new technology, which could be the ones that are re-purposing it, don’t have the ability to take on huge amounts of liability right off the get go. And the operators, who are holding this liability, want to get it off their books. 

“So sorting out who has the liability and how that’s handled in the future is the biggest question and the biggest challenge for this, because you’d want to be able to do it responsibly.”

However, she said the new federal funding could maybe help with improving the old sites to the point where the majority of the liability is resolved.

Orenstein said there also regulatory changes that would be required, like altering rules that say industrial sites have to be returned to their original conditions before they can be re-purposed for new energy uses.

But if the government wants to make things happen, Rohl said there are companies ready to go.

“It’s not as though we need to wait for the technology to catch up — we just need the framework for collaboration.”

The idea re-purposing old wells isn’t the only example of how traditional energy skill, resources and infrastructure are being reexamined for use in new ways.

On Thursday, the Canadian Association of Oilwell Drilling Contractors (CAODC) and the Petroleum Services Association of Canada joined with geothermal developers in forming a new partnership.

The goal of the alliance is to promote Canadian geothermal development and create jobs for displaced oil and gas drilling contractors and oilfield service workers.

“Drilling for deep geothermal resources requires advanced drilling technology and expertise and can put drilling rigs and associated services to work in this current economic slowdown,” the Geothermal Collaboration Network said in a release.

“Each active drilling rig can create 175 direct and indirect jobs, putting hard-working Canadians back to work on renewable energy.”

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OPEC, allied nations extend nearly 10M barrel cut by a month – World News – Castanet.net

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OPEC and allied nations agreed Saturday to extend a production cut of nearly 10 million barrels of oil a day through the end of July, hoping to encourage stability in energy markets hard hit by the coronavirus-induced global economic crisis.

Ministers of the cartel and outside nations led by Russia met via video conference to adopt the measure, aimed at cutting the excess production depressing prices as global aviation remains largely grounded due to the pandemic. The curbed output represents some 10% of the world’s overall supply.

But danger still lurks for the market, even as a number of nations ease virus-related lockdowns, and enforcing compliance remains thorny.

Algerian Oil Minister Mohamed Arkab, the current OPEC president, warned meeting attendees that the global oil inventory would soar to 1.5 billion barrels by the mid-point of this year.

“Despite the progress to date, we cannot afford to rest on our laurels,” Arkab said. “The challenges we face remain daunting.”

That was a message echoed by Saudi Oil Minister Abdulaziz bin Salman, who acknowledged “we all have made sacrifices to make it where we are today.” He said he remained shocked by the day in April when U.S. oil futures plunged below zero.

“There are encouraging signs we are over the worst,” he said.

Russian Energy Minister Alexander Novak similarly called April “the worst month in history” for the global oil market.

The decision came in a unanimous vote, Energy Minister Suhail al-Mazrouei of the United Arab Emirates wrote on Twitter. He called it “a courageous decision.”

But it is only a one-month extension of a production cut that was deep enough “to keep prices from going so low that it creates global financial risk but not enough to make prices very high, which would be a burden to consumers in a recessionary time,” said Amy Myers Jaffe, senior fellow at the Council for Foreign Relations.

“There is so much uncertainty that I think they took a conservative approach,” she said. “You don’t know how much production is going to come back on. You don’t know what’s going to happen with demand. You don’t know if there’s going to be a second (pandemic) wave.”

Jaffe said improved oil demand in China and Asia and a gradual stabilization of demand in the United States and to some extent Europe, where there’s some cautious economic reopening, were encouraging for producers.

OPEC has 13 member states and is largely dominated by oil-rich Saudi Arabia. The additional countries involved part in the so-called OPEC Plus accord have been led by Russia, with Mexico under President Andrés Manuel López Obrador playing a considerable role at the last minute in the initial agreement.

Crude oil prices have been gaining in recent days, in part on hopes OPEC would continue the cut. International benchmark Brent crude traded Saturday at over $42 a barrel. Brent had crashed below $20 a barrel in April.

Earlier this year, when demand was down, Saudi Arabia was flooding the market with crude oil, helping to send prices down to record lows. That prompted the U.S. government in April to take the unusual step of getting involved in OPEC’s negotiations, pressuring members of the cartel to agree to cuts to help end the oil price free-fall.

At the time, President Donald Trump said the U.S. would help take on some of the cuts that Mexico was unwilling to make. And perhaps more importantly, a group of U.S. senators upset over the impact on U.S. shale production said at the time that they had drafted legislation which would remove American forces, including Patriot Missile batteries, from Saudi Arabia.

Under a deal reached in April, OPEC and allied countries were to cut nearly 10 million barrels per day until July, then 8 million barrels per day through the end of the year, and 6 million a day for 16 months beginning in 2021.

In a rambling Rose Garden speech on Friday, Trump took credit for the April deal. “People said that wasn’t possible but we got Saudi Arabia, Russia and others to cut back substantially,” he said. “We appreciate that very much.”

U.S. Energy Secretary Dan Brouillette tweeted his applause Saturday for the extension, which he said comes “at a pivotal time as oil demand continues to recover and economies reopen around the world.”

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HSBC warns it could face reprisals in China if UK bans Huawei equipment: Telegraph – Investing.com

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© Reuters. HSBC’s building in Canary Wharf is seen behind a City of London sign outside Billingsgate Market in London

(Reuters) – HSBC Holdings Plc (L:) Chairman Mark Tucker has warned Britain against a ban on networking equipment made by Huawei Technologies Co Ltd, claiming the bank could face reprisals in China, the Telegraph reported on Saturday.

Tucker made the claim in private representations to British Prime Minster Boris Johnson’s advisers, the newspaper reported https://www.telegraph.co.uk/business/2020/06/06/hsbc-warns-downing-street-chinese-reprisals-huawei, citing industry and political sources.

Britain designated Huawei a “high-risk vendor” in January, capping its 5G involvement at 35% and excluding it from the data-heavy core of the network. It is looking at the possibility of phasing Huawei out of its 5G network completely by 2023, according to officials.

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HSBC warns it could face reprisals in China if UK bans Huawei equipment: Telegraph – Reuters

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FILE PHOTO: HSBC’s building in Canary Wharf is seen behind a City of London sign outside Billingsgate Market in London, Britain, August 8, 2018. REUTERS/Hannah McKay

(Reuters) – HSBC Holdings Plc (HSBA.L) Chairman Mark Tucker has warned Britain against a ban on networking equipment made by Huawei Technologies Co Ltd, claiming the bank could face reprisals in China, the Telegraph reported on Saturday.

Tucker made the claim in private representations to British Prime Minster Boris Johnson’s advisers, the newspaper reported here citing industry and political sources.

Britain designated Huawei a “high-risk vendor” in January, capping its 5G involvement at 35% and excluding it from the data-heavy core of the network. It is looking at the possibility of phasing Huawei out of its 5G network completely by 2023, according to officials.

Reporting by Ismail Shakil in Bengaluru; Editing by Dan Grebler

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