Alberta's oil and gas regulators predicted a 'landslide' of orphan wells was coming. Newly obtained documents reveal internal anxieties.
This story is a collaboration between The Narwhal and CTV National News.
But the years went on and the industry shifted. The wells were sold and then sold again as the volume companies could pull from them started to dwindle. Eventually they were sold to other companies that went out of business and left the wells to rust and wither. Those documents show the Alberta Energy Regulator doesn’t know how bad the problem is in the province, or what the true cost of cleaning up old wells is. In one internal analysis, officials write they are growing increasingly concerned about a potential “landslide” of new orphan wells as more companies fall into insolvency and a long list of higher-risk inactive wells in 2019.
“[Alberta Energy Regulator] and the [Orphan Well Association] are experiencing a slow-motion landslide of licencee failures,” reads a document from 2019 summarizing the threats. “Several mid-sized companies are moving through insolvencies, with the bulk of orphaned volumes expected to fall to the [Orphan Well Association].”
In July 2019 the regulator said it only had $224 million worth of security on hand — less than one per cent of the estimated $30.2 billion in liabilities. But it called for “patience” in documents, as it allowed companies to continue operating to try to recover some funds before they foisted the cleanup onto the industry-funded Orphan Well Association. The regulator added it worried collecting more money from companies could tip more of them over the financial brink.
It meant the regulator didn’t know how big the problem truly was, saying true liability costs could be 2.5 times higher than its own calculations. with known contamination of soil or groundwater, with as many as 400 of them classified as “potentially high risk.” Hansen says she tried to move her mortgage and was denied by the first bank she went to after it demanded environmental site assessments due to the fact she had the wells on her property.
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