Canadian oil province Alberta cleans up 5% of inactive wells in 2023

Sunshine Oilsands

05/12/2024 23:13

By Nia Williams
       Dec 5 (Reuters) - The number of inactive oil and gas
wells in Alberta, Canada's main fossil fuel-producing province,
fell 5% in 2023 from a year earlier, showing progress in
decommissioning and reclamation work, a regulatory report said
on Thursday.
    Alberta now has 79,000 wells classed as inactive versus
83,000 in 2022. Inactive wells no longer produce oil or gas and
need to be permanently plugged and the land around them
restored.  
    Canada is the world's fourth-largest oil producer and
sixth-largest gas producer, and its western provinces are dotted
with hundreds of thousands of active and inactive wells. Some of
those wells are orphans, meaning the companies that owned them
have gone bankrupt or ceased to exist.
    Companies spent C$769 million ($548.23 million) directly on
well closures. The Alberta government's Site Rehabilitation
Program spent another C$174 million, and the industry-funded
Orphan Well Association spent C$149 million.
    "This year's data indicates the industry is making notable
progress on cleaning up oil and gas wells, pipelines, and
facilities," said Laurie Pushor, CEO of the Alberta Energy
Regulator said in a statement.
    "The report also shows ongoing attention and effort will be
essential to keep the count of inactive wells moving downward."
    Alberta's inactive well count grew 5% a year between 2000
and 2020 as the province's energy sector expanded rapidly.
Environmental campaigners warned taxpayers could end up having
to pay billions of dollars in well clean-up costs unless energy
companies were held to account.
    The AER introduced a mandatory closure spending quota in
2022, requiring industry to spend collectively on closure and
cleanup work. This year the quota was C$700 million, meaning
companies' spending exceeded that by about 10%.
    The regulator said 91% of companies holding well licenses in
Alberta complied with their spending quota, leaving 54 companies
collectively owing about C$5 million.
    This included Sunshine Oilsands  2012.HK , which last month
was ordered to suspend operations by the AER due to
non-compliance with environmental and public safety rules.

($1 = 1.4027 Canadian dollars)

 (Reporting by Nia Williams in British Columbia; Editing by Bill
Berkrot)
 ((nia.williams@thomsonreuters.com; +1 403 531 1624; Reuters
Messaging: nia.williams.thomsonreuters.com@reuters.net))