Premier Ed Stelmach talks to reporters after a luncheon speech to the Calgary Chamber of Commerce. (CBC)

As hundreds of drilling rigs sit idle in Alberta, the provincial government is looking at an incentive program for small energy firms.

Premier Ed Stelmach said those junior companies are cutting back their operations because they're having a difficult time getting money from banks.

Stelmach offered few details, but said it won't be a holiday from the royalties those companies pay to the province, nor would it involve direct cash subsidies.

"We want to do whatever we can to allow companies to access capital from the banks. We're hearing from the junior companies that have difficulty accessing capital," said Stelmach. "Juniors take the risk in exploration. They provide a lot of jobs, not only in Calgary, but in rural Alberta, from the tire shops to the restaurants, the motels. So this is job creation for all of Alberta."

'This may allow that investment to continue over the summer that wouldn't otherwise happen in today's current crunch.'—Greg Stringham, Canadian Association of Petroleum Producers

Stelmach, speaking at a Calgary Chamber of Commerce luncheon, said these are not normal times, and the chill on the global economy is hurting Alberta families and businesses.

The premier said he will reach into the $14 billion his government has saved over the past couple of years in a bid to prevent budget deficits and to maintain key services like health care and education.

Beth Kish, a town councillor from Okotoks who was at the luncheon to hear the premier's plan, said she thinks he is on the right track for guiding Alberta through.

"I think it will take some time but we're in a good place. A good starting place, compared to the rest of the country, for sure," she said.

More details needed, says CAPP

Hundreds of drilling rigs are now idle in the province after oil prices dropped below $40 US per barrel this fall from a summer high of $147 US.

Greg Stringham, president of the Canadian Association of Petroleum Producers, said the help would be appreciated but details are needed.

"The real key for us is we've got people that are out working in the field now, even though it's slower, can we just keep those people working? This may allow that investment to continue over the summer that wouldn't otherwise happen in today's current crunch," he said Thursday.

Some energy firms have also been complaining about a new royalty structure imposed by the province last month that could add billions to future levies on energy production.

There's nothing in Stelmach's announcement for the oilsands, where about a dozen mammoth projects have been delayed or cancelled by wary investors.

The Canadian Energy Research Institute expects a lot less investment in the oilsands over the next decade, predicting a $97-billion decline in oilsands spending. And that's assuming oil increases in price to $60 a barrel.

The Calgary-based group expects recovery in early 2010, but oilsands development will stall until 2013, with only modest growth up to 2015.

With files from Canadian Press