LAKELAND – The province’s billion-dollar program aimed at reclaiming orphan wells in Alberta has been a success, according to the provincial government.
The Site Rehabilitation Program (SRP) was launched in May 2020, providing grant funding to Alberta-based oil field service companies to clean up “oil and gas sites in Alberta,” stated the Government of Alberta website.
Alberta was granted $1 billion in federal funding through the SRP. Since then, as of May 15 of this year, the full $1 billion in funding has been approved.
Scott Johnston, press secretary to Alberta’s minister of Energy, said in a statement to Lakeland Today, that SRP “has had significant success” in helping Albertans get back to work by “speeding up well, pipeline, facility, and site closure efforts in the energy sector, across the province.”
More than 20,500 wells were approved for “abandonment work” and over 12,300 were approved for reclamation work, according to Johnston.
In the County of St. Paul, Johnston said around $42 million in SRP funding was approved to address “almost 900 unique sites, which include wells, facilities, and pipelines,” he said.
The program is “providing jobs and other economic benefits to rural communities, including towns and villages, First Nations and Métis communities,” he said, adding, the program also builds “oilfield service industries and environmental clean up capacity across the province.”
In total, 37,589 applications were approved for the program.
As of Dec. 16, 2022, 27,588 of the SRP applications “have all work completed,” according to information from the provincial government.
This includes 15,340 applications completed for abandonment, 3,009 for phase 1 environmental site assessments, 2,917 for phase 2 environmental site assessments, 5,639 for reclamation, and 1,230 applications completed for remediation.
The SRP is now closed to new applications, and Johnston said the deadline for all the work to be completed under the SRP is set for Feb. 14, 2023.
Liability Management Framework
In addition to the SRP, the provincial government also introduced the Liability Management Framework in July of 2020 to reduce the number of orphaned and inactive wells in Alberta.
This framework includes providing a loan to the Orphan Well Association (OWA) to speed up the clean-up process of oil and gas sites.
“The Orphan Well Association (OWA) receives dedicated funding from industry and is responsible for cleaning up all orphan wells,” said Johnston.
OWA calls itself an industry-funded collaboration “among the Alberta Government, provincial regulators and oil and gas producers,” working to decommission “orphan oil and gas wells, pipelines, production facilities and restore the land as close to its original state as possible.”
In 2017, the Government of Alberta loaned OWA $235 million, and another $100 million in 2020 as part of Alberta’s Budget 2020, for a total of $335 million.
As of December 2021, OWA spent the full $335 million through the Orphan Well Loan Program, according to information from the province, resulting in a total of 3,512 wells abandoned,4,282 pipelines decommissioned, and 2,308 sites reclaimed.
According to the latest 2022 data from the Alberta Energy Regulator retrieved by Lakeland Today, as of Dec. 12 there are around 463,000 well licenses in the province. Of that, 28.8 per cent are reclaimed, 19.1 per cent are abandoned, 18.1 per cent are inactive, and 33.7 per cent are active.
So far, there are also 1,364 new drills in 2022, amounting to 0.3 per cent of the total amount of well licenses.