ESAA has compiled the following updates with regard to the Alberta Site Rehabilitation Program (SRP). ESAA will endeavor to update this page regularly as new information is received. You can send any comments to ESAA via email at: firstname.lastname@example.org.
Alberta Energy has provided the SRP Industry Advisory Committee with the following update:
Period 5 and Period 6 preview details were posted late yesterday November 26 to give industry the opportunity to begin planning for the application periods, which open February 1, 2021.
Next steps on Period 5 will include Alberta Energy contacting by email licensees identified in Period 3 to inform them of the criteria for Period 5 allocations as described on the website. This will take place over the next two weeks. Alberta Energy will ask licensees that have been identified as potentially not having allocations to provide evidence of closure spending as set out on the website. Alberta Energy will complete their final licensee allocation calculations in January. As contact information can be challenging to keep updated, Alberta Energy asks that CAPP and EPAC remind their members that Alberta Energy will be sending information via licensees’ contact emails of record with AER or Petrinex, or both.
Next steps on Period 6 will include community discussions with licensees and oil field service companies. Indian Resource Council will be supporting discussions with First Nations. Final details on next steps are being worked out with Metis Settlements and Alberta Energy before work gets underway to set up their community discussions.
Period 6 funding is in addition to all previous rounds, and may be spent on or off reserve and on or off settlement. Contracts for eligible activities on First Nations or Metis Settlements that were part of, or are intended for, Period 3, 4, or 5 applications will not reduce the funding available for those licensees’ remaining sites under Period 6. Communities will identify which sites will receive allocated funding for eligible activities in Period 6.
Period 5 and 6 are both 50% of contract face value grant funding levels, with the potential for grants issued at 100% of contract face value where Indigenous contractors are the applicants. This will enable licensees who may be unable to contribute to closure costs to have up to 100% of eligible costs covered by SRP grants.
Finally, benchmarks have been updated this week, too. All new applications under Period 3 and 4 are being reviewed through the lens of the new cost reasonableness structures. Grants issued to date at less than applied-for, or that were rejected, based on the previous benchmarks will be reassessed over the coming weeks. Alberta Energy will focus their priority on new applications, but will notify grant recipients of any top-up amounts as soon as the reassessment is complete. This is expected to generate additional field work from Periods 1-4 that may have stalled due to lower funding levels as a result of the previous cost benchmarks.
Summarized Minutes of the September 22nd IAC meeting.
Reviews were completed around September 15th. Decline notices have been sent out to companies who had not received a decline notice before (under Period 1). The website has been updated to state if applicants have not received an approval notice by September 15, 2020, they are likely declined for Period 1B.
Question: If applicants haven’t heard yet then it can be assumed that they’ve been declined? What is the rationale for not notifying all companies of the decline?
Correct. All companies would hear back from Alberta Energy once – rejection reasons for period 1b would be the same as provided in the period 1 decline notice.
Many grant agreements that were not coming back from applicants for Period 1 are starting to be submitted. At the last meeting it was discussed that Alberta Energy would provide applicants a reasonable amount of time to respond to grant agreements in order to re- allocate any funding that is not going to be used.
Period 2 – reviews and notifications are completed
11,000 applications have been approved for Periods 1 (4,650), 1B(6,300) and 2(338). The full
$200 million available for those periods has been allocated amongst approved agreements.
Periods 3 and 4
Period 3 – 940 applications received to date, 642 reviewed, 67 approvals. The rest are not necessarily declines, Energy will be reaching out to applicants for missing information and clarifications. Approvals will begin to go out to applicants this week
Period 4 – 527 applications so far; these applications are far much larger allocations and add complexity in terms of review. Some applications have been work work that exceeds $3 million. Approximately 20 applications have been reviewed so far.
Updates and Reporting
Mapping function enabled and posted on website to show geographical distribution of site locations for approved applications.
ACTION– Alberta Energy would like to hear from Committee members on whether or not this function is useful, any suggestions for improvement, and any potential impacts to stakeholders.
This remains a standing discussion item. Work continues internally to evaluate the success of periods 3 and 4, determine automation capacity, and in general ensure that the systems in place can handle the level of funding for Period 5.
Alberta Energy encourages companies not to wait for period 5 if they have closure work that can be conducted now. Period 5 will be incremental to the other rounds, and want to get spending out to service companies now.
Alberta Energy is still targeting Fall for the launch of period 5, assuming we can get period development completed.
Question: Has there been any thought to removing the sequential rollout of funding (for abandonment work before surface work).
Sequential aspect of Period 1B was designed to mitigate risk of stranding approved grant funding money for surface work (if downhole work isn’t approved and licensees can’t provide their own funding to fill the gap). This risk remains, and we’re actively considering the best way to move forward. We are trying to make program administration as straightforward as possible and avoid project managing.
o Comment: Releasing eligibility details as soon as possible will be beneficial to the program. Producers are not likely to contribute their own spending on closure when it may be eligible for additional funding in Period 5.
Alberta Energy has been asked about instances where applicants who were unsuccessful under Period 1 and 1B have been re-applying using the same contracts under Period 3 or Period 4 without talking to the licensee. Licensees who have changed or expanded their closure plans after receiving allocations in Period 3 or 4 may be surprised to learn that their allocations have gone towards companies with old contracts developed for previous periods.
– Alberta Energy has been in contact with licensees regarding Periods 3 and 4 and has been asked to provide copies of applications made under a licensee’s allocation. We are looking into what additional steps can be taken, including checking the authenticity of contract documents or reaching out to licensees to confirm.
Potential challenge that licensees may be using SRP funds to cover closure costs, but still charging their Working Interest Partners for the full portion of closure costs. WIPs would not necessarily know whether grants had been approved, or how much grant funding had been approved for that site.
SRP Government and Agency Advisory Group is working together to ensure there is no double dipping on Working Interest Claims.
Alberta Energy has heard that some service companies are creating concerns for landowners by causing crop damage and other damaging impacts by not respecting right of ways. When approached by landowners, these service companies have claimed that issues should be sent to the Government of Alberta as the work is funded through a government program. Alberta
Energy will be clarifying on the SRP website that any site impacts are the responsibility of the licensee, and that the contract for work is between the licensees and the service companies.
ESAA SRP Working Group Update
ESAA has selected 8 members to be a part of the ESAA SRP Working Group. ESAA thanks everyone who expressed interest in being a part of the Working Group. The following individuals were selected:
Chair – Stacy Thygesen, Principal, JSK Consulting
Co-Chair – Darren Cherniak, President, North Shore Environmental Consulting
Member – Marissa Reckman, CEO, AGAT Laboratories
Member – Daniela Felske, Senior Consultant, Esker Consulting
Member – Amiele Thibault, Associate Group Lead – Prairies, Golder Associates
Member – Scott Purves, VP Operations, Matrix Solutions
Member – Cory Summer, Senior Environmental Scientist, Millennium EMS Solutions
Member – Michael Parker, Manager, Environmental Consulting, Tervita
Member – Lance Hayman, VP, TR3
Member – Michelle Taylor, VP Client Services, Waterline Resources
September 10th, 2020 – Update #8
Summarized Minutes of the September 8th IAC meeting.
Status Update Alberta Energy has processed over 35,000 applications of the approximate 37,000 received. – 7,883 applications have been approved, representing $198 million in grant funding.
Period 1b review is complete. 10,460 applications have been re-assessed and all funding has been allocated. – 3,500 approval notifications are remaining to be sent out to applicants. Notifications are expected to be sent by September 15.
Of the $195 million in total approved grants (across all periods) so far: – 65% of approved applications are for abandonment work – 35% of approved applications are for remediation and reclamation work (including phase 1 and phase 2 Environmental Site Assessments)
Period 3 – 788 applications submitted; Period 4 – 289 applications submitted
A map showing all approved Site Rehabilitation projects across Alberta has been added to the Site Rehabilitation Program website under Grant Funding Status. This will be updated weekly.
3. Issues Discussion Future period design – Government is clarifying design and next steps for Period 5 development. Intent is to launch Period 5 this fall. – Allocation continues to be preferred approach by licensees. Government is assessing outcomes of Periods 3 and 4 to see if outcomes are being met with these allocations. – The ability to automate as many features as possible (especially determining incentive/funding level) remains a consideration in future design.
Government is finding that there are grant agreements that have been sent to applicants but have not been received back (approximately 850). – Unsigned/unreturned grant agreements may be a result of applicants waiting for Period 1b review (i.e. may be checking to ensure they have their program planned before signing agreement). – Depending on the grant amount approved, contractors may decide not to proceed with the work as licensees may not have the funds to cover the remaining balance. – Government wants to make sure that we are using all of the available funding within the set time frame. Any allocated funds tied to unsigned/unreturned grant agreements will be pulled back and rolled forward into future periods. Applicants will be contacted prior to this to provide a final opportunity for them to submit the grant agreement.
– Some stakeholders have been asking for a contingency for cost overruns. The main concern from Government is that we risk stranding this money and forfeiting this amount from the Federal Government.
– There are risks to contractors with carrying cost overruns in addition to the risks already discussed regarding prime contractors carrying costs while they are waiting for interim/final funding. – Providing contingent funding based on potential cost overruns would be challenging to administer, especially in a fair and equitable manner. What would the bounds be as there are some very extreme and costly cases? How would this be fairly allocated? Ultimately the responsibility should be on the licensees and oilfield service companies, not built into the grant funding. – Is there potential for an emergency supplemental allocation? In other words, is there a way to fast track approvals given new information acquired (i.e. for environmental or public safety reasons). Example of groundwater contamination discovered during remediation work as that would not have been discovered in a Phase 2 environmental site assessment. – There may be some flexibility Government can look at building in for work undertaken in good faith that may not hit a grant milestone.
September 2nd, 2020 – Update #7
Summarized Minutes of the August 25th IAC meeting.
SRP Status Update
Alberta Energy has received over 36,000 applications to date and has awarded $162 million in grant funding.
Period 1b reviews are ongoing and are anticipated to be completed by the end of August.
Approximately 8000 applications have been re-assessed; the success rate of applications under Period 1b is 69-70%.
All applications received under Period 2 have been processed. Alberta Energy has reached out to applicants in cases where information is missing from applications. Approximately half have responded so far.
Emphasis has been on getting Round 1 and Round 2 reviews completed before proceeding with reviews under Period 3.
Request from member for Alberta Energy to consider providing the weekly website update information by period rather than collectively.
Follow-up on action items (Alberta Energy)
We are working to determine how we can present more information as part of the weekly website updates, specifically looking at ability to report on geographic location of approved work and the type of work being funded.
Follow-up item on how to ensure licensees are paying the remaining 50% in the event that a contractor receives 50% funding under Period 4 of the SRP. Alberta Energy presumes that contracts would be in place to ensure work is done and paid for, any contract disputes would be between the licensee and the oilfield service provider. If there are any specific examples or circumstances where this has occurred we can assess and determine if any mitigative action can be taken.
Alberta Energy will be assessing period 3 and 4 results with respect to the allocation-model of grant funding, including how well the review process works with this model (versus the first come first served model of Periods 1 and 2).
Also assessing capacity to automate (regarding 25, 50, 100% funding increments), which will also influence how the next round is scoped.
Work is ongoing. Any input on the next period can be discussed at this Committee.
Identified a potential data glitch with sites that have been recently abandoned but are labeled as reclamation exempt.
Have any members encountered issues where the sub-surface rights didn’t transfer with the surface rights (particularly in bulk sales)? One Committee member will check in on possible occurrences and report back.
Wanting to get producer representatives participating on the Indigenous roundtables to connect operators with the Indigenous communities. We’ve seen a great deal of readiness and communities have been keen to hear more from producers about how to get in to the procurement process and plan work for future rounds.
August 31st, 2020 – Update #6
ESAA SRP Working Group: Call for Members
The Environmental Services Association of Alberta (ESAA) is forming a Working Group to assist ESAA’s representatives on the Site Rehabilitation Program Industry Advisory Committee (IAC).
As the province of Alberta prepares to launch the largest phase of the program this fall, it is asking each committee member’s organization to provide input for this phase. This is not an opportunity to comment or raise concerns about previous phases. It is our opportunity to take some lessons learned from earlier phases to help Alberta Energy deliver this largest phase successfully.
Working Group Terms of Reference
Chair: ESAA IAC representatives – Stacy Thygesen (JSK Consulting) and/or Darren Cherniak (North Shore Environmental Consultants)
Membership: 7 – 9 ESAA members representing a diverse cross section of the membership
Mandate: To develop a list of recommendations for the largest phase of the SRP to be released in late 2020.
Term: The working group will have its first meeting in mid-September and will meet every two weeks and may move to monthly following the release of the phase until December 31st. The ESAA Board may extend the term of the committee depending on additional feedback that may be required from Alberta Energy.
Compensation: These are voluntary positions. There is no compensation for participating as a member of the working group.
Meeting Format: Meetings will be held virtually via GoTo Meeting or conference call.
If you are interested in being a member of the working group and are an employee of a member company in good standing with ESAA and are a positive, forward looking person, please email: email@example.com along with your contact info, brief company profile and rationale on why you should be a part of the committee. Please respond by no later than September 4th, 2020.
ESAA Management and Board will pick members that reflect a cross section of the industry and may add people if a sub-sector is not represented in the submissions.
We thank everyone in advance for your offers to support ESAA and the Industry.
August 27th, 2020 Update#5
Summarized Minutes of the August 11th IAC meeting.
SRP Status Update
As of August 7th, $137 million worth of grant applications have been approved to 214 companies.
Period 1b – $66.4 million approved.
Approximately 4000 applications have been approved so far (73% acceptance rate). Notifications for accepted applications will begin going out within the next week and continue throughout the remainder of the review of Period 1b.
The Department is still targeting end of August for completing Period 1b reviews.
Period 2 – 308 accepted, 74 declined. On August 7 the Department sent letters to applicants with declined applications to give them an opportunity to provide missing information. Approval letters have also started to go out.
Period 3 – Just under 500 applications have been submitted to date. The application period is open until March 31, 2021. The Department will begin reviewing these applications once Period 1b reviews are complete.
Period 4 launched Friday August 7th. The allocated amounts for each company are posted on the website. This is the first period with 50% funding, and also the first round to include incentives to get 100% funding if Indigenous OFS companies are doing the work. The supplemental guidelines provide additional details on these incentives.
Interim Invoicing –interim invoicing is currently being accepted by e-mail and Government is working towards setting up an automated process for this.
Additional detail on invoicing will be posted on the website as there are updates or examples available.
A declaration form will be added to the website for companies to complete once reclamation work is finished. This will allow companies to submit reclamation work for the final invoicing before a reclamation certificate can be obtained.
Through the Indigenous Roundtable, a list of Indigenous companies and where they operate has been compiled and will be available on the website so companies can connect and create partnerships. The Department will reach out to IRC to confirm the list before it is finalized.
Issues and Discussion
Discussion on how much downhole work has been completed, whether the GOA tracks the type and amount of work that has been carried out, and on reporting and transparency of the program more generally.
It was noted that to date, in general, there has been a good distribution in the approved applications between subsurface and surface work.
The Government publishes quarterly reports on grant funding that is distributed.
The intent is to be transparent in reporting. More information will be published in the future as it is gathered by Government
FOLLOW-UP ACTION for Department of Energy: Provide an update at the next meeting on any more detailed reporting data that can be shared (committee members noted the following information would be helpful: geographic distribution of grant funding, type of work being completed, and the status of work completed).
Discussion on whether there is a way to ensure licensees pay OFS companies the other 50% of contract costs (in the 50% co-pay funding scenario. Does the Government want to see that invoices have been paid by licensees or have confirmation that licensees have paid the remaining funding amount? If confirmation is needed from the licensee, but is withheld, is there a mechanism for OFS companies to receive the final grant funding?
FOLLOW-UP ACTION for Department of Energy: will follow up on this and report back.
Question on committed spend targets under the Area-based closure program: Does grant funding count towards committed spend, and do licensees need to spend their committed spend in 2020? Does funding have to be used for the Area-based closure program that was submitted?
The AER has suspended the Area-based closure spend targets for the 2020 year. The committed spend was used by the Department to calculate grant allocations, but companies are not held to these spend targets. Grant funding can be spent on
addressing any closure obligations of the licensee, not just those committed in the Area- based closure spend.
FOLLOW-UP ACTION for Department of Energy: Clarify this information on website.
Question on whether there are timelines for submitting interim invoicing.
There are not, only the requirement that 60% of the work is done. The big timing consideration is to make sure that all work is complete and final invoicing submitted by the end of 2022. Detailed invoicing information is available on the website.
Suggestion from a committee member on dedicating additional funds to Period 1b to get more people in the field working. Need to understand how much of the approved grant funding is in the hands of OFS workers (and report on this). Are there tools that the GOA can look at that help to refocus or drive the program’s goals and get Alberta’s labour force back to work more quickly? Are there ways to incentivize and accelerate work?
FOLLOW-UP ACTION for Department of Energy: connected to data reporting action item
Work is ongoing, scope has not yet been determined. We will be reaching out to this committee, as well as our Indigenous roundtable and GOA/Agency committee for feedback.
August 11th, 2020 Update#4
ESAA has received a number of requests for additional information about the SRP Industry Advisory Committee. ESAA has received permission from Alberta Energy to share the terms of reference for the committee. Terms of Reference – download (PDF)
August 5th, 2020 Update#3
On July 30th, ESAA representatives attended their first Industry Advisory Committee Meeting. The following are updates from that meeting:
SRP Status / Updates
Reviews for Period 1b and Period 2 are continuing, we’re tracking close to $100 million in grant funding allocated.
For Period 1b there are 421 accepted applications and 96 declined.
For Period 2 there have been 298 accepted and 84 declined. Staff will be going through the declined applications and contacting applicants to revise issues and re-assess based on criteria for re-assessment being used in Period 1b.
Approval/decline statistics may change as applications undergo QA/QC processes.
Review for Period 3 will begin as soon as Period 1b is done. On the advice of the Committee, Alberta Energy is focusing resources on 1b to get back to applicants as soon as possible.
The Government of Alberta is working diligently to launch Period 4, however technical issues with the way the system processes grant request amounts have delayed the launch temporarily.
Issues and Discussion
Discussion on the merits of the Saskatchewan model for distributing grant funding and whether Alberta could adopt a similar model to alleviate challenges for oilfield services companies with respect to cashflow and timely receipt of grant funding and help ensure there are no missed opportunities for companies to participate.
Several members felt that large changes to the model at this point in time are not practical, but tweaks to improve issues can continue.
It was expressed that some of the challenges faced in previous Periods will be minimized moving forward (ie. allocation system for Periods 3 and 4 is more aligned with current company planning practices, progress in adapting current system to make the application process more straightforward, and that more information sharing and increased user awareness would lead to better outcomes going forward).
The Government of Alberta connects with Saskatchewan and BC on the program and will remain open to learning and adapting.
The week of July 28 Alberta Energy rolled out the interim invoicing process on the website. It is currently a manual process that has an approximate 14 calendar day turnaround time. An automated solution is underway.
Clarification that the invoice should be made out to the producer, not the Government.
The Producer must acknowledge that the work has been done before the invoice is submitted to the GOA.
Member to provide a PDF example of what constitutes an acknowledgement of work complete. Alberta Energy will check internally and determine if we’re on the same page with what constitutes an acknowledgement of work. Further clarification will be provided if needed.
Discussion on how to connect Indigenous companies and producers, especially those operating on Reserve and on Settlement. Alberta Energy wants to onboard producers onto our Indigenous Roundtable meetings, looking for advice on how we can do that (who within the company would participate).
A comment was made on the application turnaround time. At the last meeting it was noted that about 500 applications are being completed per day, but this is not matching up with the updated statistics for applications reviewed.
Liability Management Framework update
Government announced updates to the Liability Management Framework today (June 30).
Replacing the LLR with a new system to assess capabilities of operators in meeting obligations.
Annual spending targets (future roll-out, targeted engagement with regulated community to determine practical implementation timeline).
Opt-in function for landowners, including Indigenous communities on Reserve and Settlement.
Panel to provide input on legacy and post-closure site management.
On Friday, ESAA’s Board of Directors met with a senior representative of Minister Savage’s office and a member of the SRP team. Over the past few weeks, ESAA has had a number of meetings with the Alberta Energy team working on the SRP and expressing the concerns of the environment industry sector.
ESAA is please to announce that effective immediately, ESAA will be joining the SRP Industry Advisory Committee. The Committee meets bi-weekly and is responsible for providing input on the operation of the SRP, providing feedback for future improvements in the program and providing recommendations to the Government for future SRP Increments.
ESAA will be represented on the Committee by ESAA President, Stacy Thygesen, JSK Consulting Ltd. and alternate member, Darren Cherniak, ESAA Director, North Shore Environmental Consultants Inc.
“ESAA would like to thank the Government of Alberta for understanding the important role the Environment Industry will play in Alberta’s Site Rehabilitation Program and including our association to represent our members on the SRP’s Industry Advisory Committee. ESAA is confident our collaborative approach to managing inactive and abandoned well sites, facilities, pipelines and surface leases in Alberta is the most productive path forward. On behalf of our members and industry, ESAA will continue to work hard to ensure it clearly communicates the concerns and opportunities available at the committee meetings and provide beneficial updates to the program” – Stacy Thygesen, ESAA President, JSK Consulting Ltd.
ESAA has created an information page, where we will post regular updates. The page can be found at: https://www.esaa.org/srp/
In addition, ESAA has created an email address for the program, firstname.lastname@example.org . We kindly ask that you use this email address for all comments, feedback and suggestions regarding the SRP for the ESAA representatives instead of emailing them directly.
Thank you for your continued support of ESAA!
July 16th, 2020 Update#1
Phase / Period 3: Opens Friday, July 17th. Full details about this next round of funding available in the information below.
Phase / Period 4: Will open at the end of July. Funding details below.
Phase / Period 5: Will open later this fall and will be the largest of the phases
Two more potential Phases / Periods in early 2021
ESAA continues to work with Alberta Energy to express the importance of ESAA Member involvement and is working to get a presentation from Alberta Energy at RemTech 2020.
CAODC Update Period 1 Update
35,376 applications reviewed, 4,355 verified (approved), 4,021 notifications and grant agreements sent out.
$64.6 million in grant funding approved & allocated to 140 companies in Alberta.
Payments will be processed once the grant agreements are signed and returned. Grant installments will be paid based on invoice submission.
Period 2 Update
Currently undergoing quality checks.
All 382 applications have been reviewed.
Guidelines will be updated online in V.2.0 for clarification.
Member reporting portal will come to fruition as a result of member request.
Still very little clarification surrounding reasons for rejected applications.
A helpline for guidance, feedback, and questions would be helpful.
Period 1B Update
Period 1B is redeploying unused funds from Periods 1 & 2.
There are no new applications being accepted. Period 1B involves reassessment of rejected Period 1 downhole work. Rejected applications from Period 1 will automatically be reassessed.
Supplemental guidelines for Period 1B will be released shortly.
Intention of $30,000 grant limit in Period 1 was to capture smaller programs; Government of Alberta did not expect some service companies to break down their applications into smaller chunks.
Project start date must be prior to December 31, 2022.
Third party companies cannot apply on behalf of a company.
There are now 80 people reviewing Part 1B applications.
If applicants have not yet received a response, their application may be in “holding” for consideration for Part 1B.
Reasons for Application Rejection in Previous Periods
A termination clause was included in the contract.
All work must be completed by December 31, 2022.
Missing Master Service Agreement (MSA) attachment or MSA number. (Re-evaluation will include CAODC MSA number being approved).
Government of Alberta cannot be listed as a party in the contract.
Reviewers may have misunderstood a contractor applying on behalf of a licensee, and mistaken the situation as the contractor being a “middleman”.
Scope and or pricing details were broken down in a way that confused reviewers. These cases will be reviewed again going forward.
Part 3 funding allocation breakdown has not yet been released.
$130,000 – $150,000 per licensee can be used to leverage further spending. ($100,000,000 divided by 720 oil companies/licensees).
Part 3 will be released at the same time as period 1B.
Focus will be on area-based closures.
Up to 50% coverage.
Incentives for companies that use local indigenous companies (up to 100% funding).
Indigenous companies are defined as:
at least 50% owned and at least 50% of their employees or contractors being Indigenous, or;
at least 50% executives being Indigenous and at least 50% of employees or contractors being Indigenous.
Guidelines will be clarified and released within the next two weeks.
Companies are encouraged to apply ASAP for future Parts, i.e. no need to wait until Part 4 to apply for Part 4.
Some applications have been withheld and will be reviewed by UWI. Going forward applications will be grouped by UWI.
Programs don’t need to be limited to $150,000, co-paying is permitted, i.e. a portion funded by the licensee, and a portion funded by the Government of Alberta.
Several companies have cancelled spending based on anticipated funds from the AB SRP.
Part 3 & Part 4 application periods will be open until March 31, 2021.
Prime contractors are permitted to submit applications on behalf of subcontractors.