Alberta Energy Regulator releases report that shows decline in number of orphaned wells

A new report issued Wednesday showed a decline in the number of orphaned oil wells in Alberta

The number of orphan wells fell in 2022, according to a report released by the Alberta Energy Regulator Wednesday..

The oil industry oversight group released its inaugural Liability Management Performance Report Wednesday, which found a nine per cent drop in the number of inactive wells during 2022 - going from 91,000 to 83,000 wells province-wide.

Alberta's oil and gas producers spent nearly $700 million in 2022 on cleaning up the hundreds of thousands of old wells that dot the province

That's 65 per cent more than they were required to spend under provincial rules and they took 8,000 inactive wells off the books, the report says.

"Industry is moving infrastructure toward closure," said Chad Newton, the regulator's manager of planning. "Industry did a good job."

But the report also says the industry faces a $33-billion environmental liability from the remaining wells — a figure that critics say is far too low and based on old cost estimates the auditor general has already criticized.

"They're using a system that they've admitted underestimates liabilities," said Martin Olszynski, a University of Calgary resource lawyer and frequent critic of Alberta's remediation policies.

Previous well closure programs allowed companies to focus on groups of wells that were relatively easy to clean up. The fact $145 million was spent in 2022 on remediation suggests that's no longer the case, said liability adviser Anita Lewis.

"The remediation ones typically are the more difficult sites because they have contamination associated with that," she said.

The report found companies spent more than $1.2 billion on closing inactive wells that year.

According to the AER, 51 companies did not fulfill their closure quotas - a shortfall of $4.2 million dollars.

The Alberta Site Rehabilitation Program gave out nearly $1 billion in one-time federal money to help pay for cleanup, much of that during 2022. Applications closed in February of 2023.

The deadline for mandatory reporting of well clean-up conducted in 2023 is due in March.

The AER is scheduled to release its Liability Management Performance report annually.

With files from The Canadian Press