It is time for government and oil companies to seriously take a look at what happens to oil wells when they are shut-in or decommissioned.
On July 27 a well site near Nampa, south of Peace River, exploded.
Although the fire was quickly extinguished by the local fire department, the incident should serve as a reminder of how dangerous a commodity oil and natural gas are and the need to take proper precautions when the wells come to the end of their effective lives.
In Alberta there are thousands of wells in every stage in their life-cycles, including ones in the County of Barrhead.
The question the people of Barrhead, as well as every Albertan should be asking themselves is do we, as a province, have a plan to deal with these sites when they are no longer pumping product.
And just as important: who is going to pay to implement the plan — industry or taxpayers.
Unfortunately, in the majority of cases, it will be the ordinary Albertan and because of the environmental issues involved, the wildlife that will bear the consequences, as there are no specific regulations in place requiring anyone to clean up old or abandoned sites.
Ryan Barlett, a spokesman for the Alberta Energy Regulator (AER) said in an interview with the CBC that there are no specific requirements for licensees to follow when a well is shut-in, adding that they must continue to follow AER requirements of the facility.
Which is all well and good, but what happens when the well is outright abandoned. Yes, there is the Alberta’s Orphan Well Association (OWA).
The OWA is a not-for-profit organization, which is funded mostly by industry and the AER, whose mandate is to manage the abandonment of upstream oil and gas orphan wells, pipelines, facilities and the remediation and reclamation of their associated sites.
When a company goes bankrupt or ceases operations and its owners can’t be found, the well and its cleanup costs, which can run into hundreds of thousands of dollars, are handed over to the OWA. The question then becomes does the OWA have sufficient resources to deal with the ever increasing number of companies who have abandoned their sites? Hopefully for Albertans the answer is yes, but just in case perhaps it is time for the provincial government to come up with another plan that doesn’t involve the OWA or enact legislation to ensure that Albertans do not suffer the economic or environmental consequences. One just has to look to our British Columbia neighbours, who have enacted a similar system, collecting deposits from mining companies for the reclamation of their shuttered or abandoned facilities, of the potential consequences when the auditor general found the system to be vastly underfunded. Luckily for B.C. they still have time to correct the ship, and so do we if we act now.
