LAKELAND - Fort McMurray-Lac La Biche MLA and Alberta Energy Minister Brian Jean says progress is being made in the clean-up and closure of orphan well sites across the province, including hundreds in northeastern Alberta
Orphan wells are former oil and gas sites left abandoned by energy companies.
According to the Orphan Well Association of Alberta (OWA), there are 90 well-sites left abandoned in Lac La Biche County. Costs to clean up, remove structures and reclaim those sites - many of them on rural municipal property - fall onto the ratepayers. In recent years, provincial funding has been made available to assist municipalities ... and more of that support will soon be available, says Jean and Alberta Environment and Protected Areas Rebecca Schulz.
The provincial politicians made a joint statement earlier this week on the progress to address the orphan well issue that affects all corners of the province.
Pilot projects
Schulz says that in the coming weeks, the province will have two new pilot projects – the Well Site Reduction Pilot and the Reclaiming Peatland Pilot ready for municipalities. These projects, she says, will begin testing ways to make the current reclamation certificate issuance process faster, clearer, and more effective.
“As this moves forward, we will continue looking at new ways to speed up closure and cleanup work while maintaining world-class environmental standards, and at ways to reclaim sites as quickly, safely and effectively as possible for future generations,” she stated.
Along with the 90 well sites currently classified as abandoned “orphan” wells, there are 64 additional sites across the municipality where decommission has been completed and the site is in reclamation in progress.
Jean, who represents the Fort McMurray-Lac La Biche riding says the new supports come on the heels of the Alberta Energy Regulator’s (AER) inaugural Liability Management Performance Report.
He said the AER report demonstrates the progress being made in moving oil and gas infrastructure through the stages of closure work. He used recent statistics to show how well the work has been going in recent years. The data shows that in 2022, the number of inactive wells in Alberta had decreased to 83,000 from the high of 91,000 in previous years.
“The regulator’s first performance report shows how (the Government of) Alberta’s promise to take bold and strong action under the liability management framework to clean up inactive oil and gas sites is making a big difference,” he stated.
Although industry is responsible for the abandoned sites, Jean says the industrial sector is doing its part to clean up the sites. Two years ago, he said, companies spent approximately $700 million to clean up liabilities. That amount, he continued, exceeded the closure spending requirements of the AER by 65 per cent. He added that in total, more than $1.2 billion was spent on closure work in 2022.
To address some of the issues arising as more and more well sites were abandoned during the recent economic downturn, the Site Rehabilitation Program (SRP) was first launched by the Government of Alberta in 2020. That program injected $1 billion in grant funding to oilfield service companies to close and reclaim sites.
Since then, more industry-wide provisions have been made to reduce the amount and effects of site closures.
“In 2022, a mandatory closure spending quota was introduced by the AER, requiring industry to spend at least $422 million collectively on closure and cleanup work,” Jean explained. “At the same time, the Alberta Site Rehabilitation Program provided grants to service sector companies to conduct closure work, and the Orphan Well Association continued its cleanup of orphan sites.”
There has been a lot of work conducted on the issue, said Jean.
At the Alberta Energy Regulator offices, spokesperson Renato Gandi says much of that work has been done directly with affected municipalities. But residents are part of the engagement and consultation process.
“We are currently working with municipalities to determine how best to share information of this nature for public release,” he said.
When asked for details about new orphan well sites across the entire Lakeland Region in 2024, Gandia, said companies are not required to provide details on site closure plans until the next operating year. He said it continues to be the responsibility of the oil and gas companies to safely and responsibly suspend and abandon, or decommission, their energy infrastructure and reclaim energy development sites.
According to Gandia, when an energy company ceases its operations without having properly closed its infrastructure, the AER can order anyone with a legal or beneficial interest in that infrastructure to close it.
“If there are no active working interest participants, we may designate the well, facility, or pipeline as an orphan to the Orphan Well Association’s care to be suspended, abandoned, remediated, and reclaimed,” he stated, adding that after a well is abandoned, the land around it must be returned to its original state.
While abandoned sites have economic and environmental impacts, from a political standpoint, the minister responsible for the Environment is pleased with the apparent progress being shown in the latest AER report.
“This report shows more sites reclaimed, more funds invested into more cleanup work and more action being taken with industry at sites across the province. Our government has made this a priority, and we are delivering,” Schulz explained. “We will keep building on this momentum.”
