Alberta oil companies walk from their responsibilities; Thousands of wells sit orphaned on people’s land with trees growing out of pump jacks and no reclamation in sight

Alberta oil companies have abandonment issues, Thousands of wells sit orphaned on people’s land by Suzy Thompson, February 13, 2014, Calgary Fast Forward
Rural landowners are angry at the rate that abandoned oil wells are accumulating on their land. Without legislated timelines for industry to clean up well sites once production has stopped, landowners and environmental groups say the legacy of this side of the energy industry is already a major burden on the land. “Abandoned” is one of several technical designations for a well that is no longer producing oil, so the actual number of such sites and their condition is hard to pin down. Alberta Energy statistics put the number of “uncertified wells,” meaning those that are out of use but not yet capped, on land that has not been reclaimed, at 50,417. Some of those oil wells were drilled over 100 years ago, and the companies that should be liable for their reclamation have long since ceased to exist.

The Alberta Energy Regulator (AER) has extensive rules governing well abandonment, but Red Deer area rancher Glenn Norman, also a vocal member of the Alberta Surface Rights [Group], says there are big loopholes in the regulatory framework, and that the AER does not enforce its rules adequately. “What’s currently wrong with the regulatory framework is it’s not getting the job done. The amount of wells that are sitting suspended is absolutely huge,” says Norman. He says one of the biggest problems is the lack of a legislated timeline to dictate when an oil company must cap a well it is finished with and perform environmental reclamation on the site. “Within five miles of me there are probably 12, 14 wells that have been sitting not doing anything, nothing’s being produced — some of them nothing has ever come out of them and they’ve been sitting there since the ’70s,” he adds. Norman says it is often cheaper for an oil company to continue to pay the lease on abandoned wells in perpetuity than to perform the required abandonment and reclamation procedures. He also says oil companies will do this until they go out of business, after which time the old wells become the Orphan Well Fund’s responsibility.

In Alberta, all oil companies pay a levy to the Orphan Well Fund to cover the costs of the Orphan Well Association (OWA), which reclaims well sites that belonged to now-defunct companies. An Alberta Surface Rights [Group] resolution wants oil company levies to be tripled and the fund to be raised to $250 million. In 2012, the fund was raised to $15 million from $12 million per year. According to OWA manager Patricia Payne, that is just enough to handle its current inventory of 540 orphan sites. “At that rate they’ll finish getting rid of the orphan wells just about the time the Earth spirals into the sun,” says Norman. Payne says the association’s greatest challenge is co-ordinating reclamation work for wells scattered across the province, and an additional funding increase would help. She says that because there is no timeline dictating how quickly a well site must be cleaned up, the OWA makes an effort to deal with the ones that appear to present the greatest risk to the environment or nearby communities.

Norman says the Alberta Surface Rights [Group] and other landowner advocacy groups have been bringing their concerns to the provincial government for decades with little success. [Emphasis added]

2014 oil and gas industry has abandonment issues

A tree growing from a well is a pretty good indication the oil company that owns it isn’t coming back.

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