Alberta's petroleum industry has been a main component of the province's prosperous economy for decades. One...

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Alberta's petroleum industry has been a main component of the province's prosperous economy for decades. One challenging outcome of the industry is the large number of inactive, and in some cases abandoned, oil and gas wells now existing in the province. The companies that drilled the wells are still responsible for them. Regulations require reclamation of these non-productive oil and gas wells, including a complete site assessment and restoration to its original condition. It is estimated that there are 90,000 inactive wells in the province, many considered to be abandoned. The problem is that many of these wells were owned by companies that have failed and no longer exist. These wells are referred to as being orphans and it is not possible to cover the costs of reclamation. The Alberta Energy Regulator collects an annual levy from active oil and gas producers and remits the funds to the Orphan Well Association (OWA). The OWA is a non-profit organization whose mandate is to manage the abandoned oil and gas orphan wells and the remediation and reclamation of the sites. In 2018, the OWA had an inventory of about 1,900 wells and 4.121 pipeline sites. It had about $235 million to clean up about 700 wells. The abandoned wells were problematic for farmers. They cannot refuse companies drilling on their property and have little say in their operation. Inactive wells may not be properly sealed and leak methane, contaminate soil and water, and pose a threat to livestock. Some farmers with abandoned wells have been refused mortgages and incurred legal costs in dealing with the companies. Abandonment regulations in the United States are stricter, but the Alberta government has been reluctant to tighten rules. The estimated cost for reclamation of abandoned wells ranges from $27 billion to $47 billion. The OWA does not have sufficient funds and even operating companies will be challenged to finance the reclamation of thousands of wells, especially with the downturn in the industry. The existence of abandoned wells is being referred to as an economic and environmental disaster. The costly reclamation will take decades to complete and will be a burden for future generations. Questions 1. What are the issues involved with oil and gas well abandonment? 2. Who are the stakeholders involved in the issues and what is the nature of their influence? 3. How can the problem of abandoned and orphan wells be resolved? Alberta's petroleum industry has been a main component of the province's prosperous economy for decades. One challenging outcome of the industry is the large number of inactive, and in some cases abandoned, oil and gas wells now existing in the province. The companies that drilled the wells are still responsible for them. Regulations require reclamation of these non-productive oil and gas wells, including a complete site assessment and restoration to its original condition. It is estimated that there are 90,000 inactive wells in the province, many considered to be abandoned. The problem is that many of these wells were owned by companies that have failed and no longer exist. These wells are referred to as being orphans and it is not possible to cover the costs of reclamation. The Alberta Energy Regulator collects an annual levy from active oil and gas producers and remits the funds to the Orphan Well Association (OWA). The OWA is a non-profit organization whose mandate is to manage the abandoned oil and gas orphan wells and the remediation and reclamation of the sites. In 2018, the OWA had an inventory of about 1,900 wells and 4.121 pipeline sites. It had about $235 million to clean up about 700 wells. The abandoned wells were problematic for farmers. They cannot refuse companies drilling on their property and have little say in their operation. Inactive wells may not be properly sealed and leak methane, contaminate soil and water, and pose a threat to livestock. Some farmers with abandoned wells have been refused mortgages and incurred legal costs in dealing with the companies. Abandonment regulations in the United States are stricter, but the Alberta government has been reluctant to tighten rules. The estimated cost for reclamation of abandoned wells ranges from $27 billion to $47 billion. The OWA does not have sufficient funds and even operating companies will be challenged to finance the reclamation of thousands of wells, especially with the downturn in the industry. The existence of abandoned wells is being referred to as an economic and environmental disaster. The costly reclamation will take decades to complete and will be a burden for future generations. Questions 1. What are the issues involved with oil and gas well abandonment? 2. Who are the stakeholders involved in the issues and what is the nature of their influence? 3. How can the problem of abandoned and orphan wells be resolved?

Answer rating: 100% (QA)

I The issues involved with oil and gas well abandonment include environmental concerns financial burdens and regulatory challenges Abandoned wells can leak methane contaminate soil and water and pose ... View the full answer