Abandoned wells on province’s radar

The Alberta government says it’s moving to tackle the growing problem of orphaned and aging oil and gas wells by drafting a new strategy to manage liabilities.

Starting Wednesday, the government and Alberta Energy Regulator will meet with industry, landowners and other interested groups to begin work on a policy to address the costs associated with the cleanup of aging energy infrastructure across the province.

Energy Minister Marg McCuaigBoyd said changes are needed to protect Albertans from the financial and environmental costs associated with well remediation.

“Landowners are worried, the industry itself is worried, so it’s time to take some action,” she said in an interview.

The province currently works under a polluter-pay principle, where industry is responsible for the abandonment and remediation of old wells. However, as low oil prices and the recession have forced more companies into bankruptcy, more inactive wells are left without an owner.

“I’m a bit disappointed that when oil and gas was booming nobody took this seriously and now that we’re in a downturn there’s not the mechanisms in place,” said McCuaig-Boyd, who expects the review to be completed by the end of 2017.

Responsibility for the remediation of orphaned wells has fallen to the Alberta Orphan Well Association. The industry-funded organization has more than 2,000 orphan wells on its books, more than double from a year ago. Last year, it managed to close 185 wells.

“We think it’s critical to open the dialogue with Albertans and jointly develop a framework that improves the management of unproductive upstream oil and natural gas assets,” Brad Herald, chair of the association, said in a statement.

A meeting on the strategy will be held in Nisku Wednesday followed by three more sessions over the next month.

In its March budget, the federal government gave Alberta $30 million in one-time funding to help remediate old wells.