Orphan well numbers surge.
As the energy industry continues to strive to survive in a low price environment that shows little sign of abating we thought we would revisit the issue of orphan wells in Alberta. Pat Payne, is the manager of the Orphan Well Association (OWA). The OWA describes itself as, “An independent non‐profit organization that operates under the delegated authority of the Alberta Energy Regulator (AER). Our funding comes primarily from the upstream oil and gas industry. Orphan properties are wells, pipelines, facilities and associated sites which have been left behind by defunct companies.”
Payne let us have and inventory count of orphan wells in Alberta:
As of March 31
2012 26 2013 74 2014 162 2015 705 2016 768
As of June 30 2016 1114
To see a list of wells check out the OWA website (www. orphanwell.ca) .
“Numbers (of wells) are increasing due to the increase in insolvencies and bankruptcies in the industry from low commodity prices,” said Payne.
Payne said that of the 1114 wells that are on the inventory list right now the OWA is planning on abandonment procedures for between 150-200 wells this year. The “Count will vary depending on how complex our abandonment operations are,” said Payne.
If landowners are concerned Payne said that they, “Can contact their local AER Field Centre, either Midnapore Field Centre in the south west or Medicine Hat Field Centre in the south east, with concerns about neglected or unattended infrastructure.”
We asked Payne how long is it before abandoned or neglected infrastructure becomes hazardous? “Hazard of neglected or unattended infrastructure will depend on the condition it is left in,” she said. “When the OWA receives new orphan wells, it inspects them and assesses the safety and environmental hazards and addresses priority concerns with safety first. If a well is shut in properly, even if it is sour, the hazard can be low. Removing pressure from pipeline systems and properly shutting in facilities and cleaning out tanks decreases hazards such as spills from equipment,” Payne said.
“Please note that the term abandoned is used in general to describe property that has been left behind and is no longer looked after. In contrast the provincial industry regulator, the Alberta Energy Regulator (AER) uses the term ‘well abandonment’ to describe the steps to safely plug a well downhole and then remove the well head. The OWA’s mandate includes abandoning orphan wells and this means the wells are properly addressed and the site readied for reclamation, and it does not mean that the wells are left neglected,” said Payne.
With a very significant upsurge in orphan wells from 715 in 2015 to 1114 in 2016, over a 55 per cent increase, it is obvious that the provision of more resources for the OWA would be a good idea. Although this means more cost for a beleaguered industry. “Yes, we continue to have more funding,” said Payne. “Industry has continued its commitment of double the annual orphan levy ($30 million) from two years ago to address orphans. This is a significant contribution in light of the difficult economic times that industry is going through,” said Payne.