Addressing safety

The Alberta government is working to address the issue of safety of inactive and abandoned oil and gas sites by:

  • reviewing the existing upstream oil and gas liability management system
  • providing a loan for the Orphan Well Association (OWA) to speed up work to clean up oil and gas sites

Quick facts

  • Alberta has an estimated:
    • 176,000 active wells
    • 90,000 inactive wells
    • 77,000 abandoned wells
  • As of January 2019, the OWA had an inventory of 4,680 orphaned wells scheduled to go through closure activities (3,127 to be abandoned, 1,553 to be reclaimed).
  • In 2017/18, the OWA received reclamation certification (site closures) on 105 sites, and decommissioned 259 wells. The association also applied for reclamation certification on 107 sites.
  • The annual OWA budget is $45 million. It is scheduled to increase to $60 million in the 2019 to 2020 fiscal year. The increase will be covered by industry levies.

Upstream oil and gas activity

Subject matter experts and key stakeholders took part in roundtable discussions. These were aimed at improving the management of historic, current and future liabilities associated with the full life-cycle of upstream oil and gas development. Thank you to all who participated.

Participants included:

  • industry
  • landowners
  • indigenous communities
  • environmental groups
  • municipalities

The review is focused on further protecting Albertans and the environment while ensuring Alberta remains a competitive place to invest. The results of these roundtables helped inform policy discussions and operational changes. We are aiming to complete our review and determine next steps.

Reducing orphaned wells

The Alberta government has loaned the OWA $235 million (PDF, 1.8 MB) to accelerate the reclamation of oil and gas well sites that no longer have a responsible owner.

The OWA is an industry-funded agency that works to close and reclaim infrastructure from oil and gas companies that no longer exist. This involves removing equipment, sealing wells and ensuring the safety of the site for the public.

The Alberta government loan means:

  • 1,650 new jobs in reclamation work over the next 3 years
  • the work from both the loan and the annual program will reduce the infrastructure liability facing the OWA by approximately a third
  • the loan will be repaid by industry through the existing orphan fund levy
  • A $30-million commitment from the federal government will cover interest costs

The work resulting from this loan will be in addition to the OWA’s ongoing work.

Definitions

Orphan

  • A well or facility confirmed not to have anyone responsible or able to deal with its closure and reclamation.

Inactive

  • A well or associated facility where activities have stopped due to technical or economic reasons. Not all sites in this category are orphaned. Many may be reopened and produce again at a later date.

Abandoned

  • A site that is permanently dismantled (plugged, cut and capped) and left in a safe and secure condition.

Remediation

  • The process of cleaning up a contaminated well site to meet specific soil and groundwater standards.

Reclamation

  • The process of replacing soil and re-establishing vegetation on a wellsite so it can support activities similar to those it could have supported before it was disturbed.

Contact

To contact Alberta Energy:

Hours: 8:15 am to 4:30 pm (open Monday to Friday, closed statutory holidays)

Address:
Alberta Energy
North Petroleum Plaza
9945 108 Street
Edmonton, Alberta  T5K 2G6