Plan for orphan well cleanup coming next month
The Alberta government will be releasing in two weeks a report detailing plans for cleaning up abandoned or inactive oil wells, but the said document has already faced controversy.
The draft report includes recommendations such as creating government-owned companies that would acquire mature wells, extract the remaining hydrocarbons and use those revenues to fund the cleanup, according to a report from The Canadian Press (CP).
The report also suggests that those companies would be supported by public funds, according to CP.
The report also recommends the establishment of an industry-funded insurance fund. However, that will also be “ultimately backstopped by the province,” CP noted in the article posted in CTV News.
Public dollars may be used to help guarantee reclamation of almost 80,000 inactive wells, CP reported in a separate article posted in CBC.
Alberta Premier Danielle Smith also noted that it’s worth considering the option of having companies acquire and produce oil from abandoned wells, so they will have new revenue sources for cleanup, according to CP.
“I think we have to be prepared for that,” she said.
“I’ll be interested to see how the public feels about it.”
However, she said that the profitability of abandoned wells is not guaranteed.
‘We will not put public tax dollars into cleaning up wells’
Meanwhile, Alberta's energy minister claims he has not seen the leaked document and that the government will not be using public funds for the said project.
"We will not put public tax dollars into cleaning up wells," Brian Jean said, according to the CP news report posted in CBC.
The 71-page draft document dated Jan. 28, obtained by CP, acknowledges "increasing public concern" that taxpayers will be on the hook for industry's responsibilities.
It also says that "the trust has been broken" between the Alberta government, energy industry, landowners and municipalities,” according to CP.
The said report is written by David Yager, a former oilfield services executive, noted CP. He currently serves as a special adviser to Smith and sits on the board of Alberta's energy regulator.
Directive on well abandonment
According to the Alberta Energy Regulator (AER), companies must follow strict requirements – primarily set out in Directive 020: Well Abandonment – to ensure that the public and environment are protected before, during, and after a well is abandoned.
In general, the following stages must be completed:
- Project planning - The company must design an abandonment program to identify any issues within the well that could lead to potential leaks (e.g., cracks) and to identify all oil or gas formations and all groundwater zones that the well passes through. The company must also evaluate the cement that holds the well in place to ensure that it remains strong and intact.
- Subsurface abandonment - The company must clean the inside of the wellbore to remove any oil or gas that could cause it to corrode or could cause the cement plugs that will be inserted into the well to leak.
“Any issues identified with the wellbore during the planning phase must be repaired. In addition, all oil or gas formations must be isolated from one another with cement plugs, and any groundwater zones must be isolated from the wellbore to make sure that no oil, gas, or water can travel up the wellbore and contaminate soil or groundwater. The company must then fill the well with fresh water or other noncorrosive fluid and assess the well to ensure there are no leaks,” said AER.
- Surface Abandonment - The final step in the abandonment process is known as the “cut-and-cap” stage. The company must cut the well casing to a minimum of one metre below the surface (with some exceptions, which are listed in Directive 020), and place a vented cap atop the well casing. Surface infrastructure associated with the well must be removed within 12 months of completing this stage.
