The number of inactive oil and gas wells in Alberta, Canada’s main fossil fuel-producing province, fell 5% in 2023 from the previous year, reflecting progress in decommissioning work and reclamation, according to a regulatory report released Thursday.
Alberta now has 79,000 wells classified as inactive, up from 83,000 in 2022. Inactive wells are no longer producing oil or gas and must be permanently plugged and the land around them reclaimed.
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 these wells are orphans, meaning the companies that owned them have gone bankrupt or ceased to exist.
Companies spent 769 million Canadian dollars (548.23 million euros) directly on closing the wells. The Alberta government’s site remediation program spent another CA$174 million, and the industry-funded Orphan Well Association spent another CA$149 million.
“This year’s data indicates the industry is making notable progress in cleaning up oil and gas wells, pipelines and facilities,” said Laurie Pushor, CEO of the energy regulator. of Alberta, in a press release.
“The report also shows that continued attention and efforts will be essential to keep the number of inactive wells declining.”
-The number of inactive wells in Alberta increased 5% annually between 2000 and 2020, driven by the rapid expansion of the province’s energy sector. Environmental advocates have warned that taxpayers could end up on the hook for billions of dollars in well remediation costs if energy companies aren’t held accountable.
The AER introduced a mandatory closure spending quota in 2022, requiring the industry to spend collectively on closure and clean-up work. This year the quota was 700 million Canadian dollars, meaning business spending exceeded that amount by about 10%.
The regulator said 91 per cent of companies with well licenses in Alberta have met their spending quota, leaving 54 companies collectively owing about C$5 million.
Among them, Sunshine Oilsands, which the AER ordered last month to suspend its activities for non-compliance with environmental and public safety rules.
($1 = 1.4027 Canadian dollars)
