Alberta’s orphan well woes are about to swell following the end of a controversial court case involving some of the biggest names in the Canadian oilpatch.
The province’s Orphan Well Association (OWA) is tasked with cleaning up oil and natural gas wells that no longer have an owner, something that is often caused by a company going bankrupt.
The OWA already has an inventory of about 1,600 wells in need of closure and reclamation. That workload is expected to more than double as the bankruptcy of Sequoia Resources is finally settled — a court case that has been followed closely by many because of its broad implications for landowners, industry and taxpayers.
With Sequoia, the OWA is expecting to inherit 1,800 to 2,000 more wells, in addition to the company’s other infrastructure, such as pipelines. The estimated clean-up cost of the Sequoia properties is about $200 million.
I don’t get why they don’t have to pre-pay before they get to drill
If I have to pay a deposit to my landlord, they need to pay a deposit to the owner of the land they’re on.
It should be enough to either fully remediate the land back to the state it was in before the rental, or to support a lawsuit to compel that remediation.
PER WELL.
But that would cut into revenue for the government. Much easier to blame them for failing to clean up later when cash is already in hand.
They do pay some, thats how the orphan well association is funded.
But the payments are inadequate, so the OWA is woefully underfunded.