The Problem of Orphaned Oil and Gas Wells

Enterprises active in the energy sector have refused to take responsibility for the mess they leave behind. The problem of orphaned oil and gas wells exposes a deep malaise within the current direction of the economy. Enterprises have blinders over their eyes and refuse to look beyond the money they make from their activities. They do not want to face the truth that the immense productivity of the modern economy brings with it not only riches in the immediate sense but responsibilities for its effects on the social and natural world.

The modern economy is unlike petty production of old that was mostly rural and contained within a small area. Today the economy is large-scale and global in scope. Modern industrial mass production and the world market require extensive relations with other sectors and branches of the economy at home and with peoples and economies abroad. Activity in the modern economy greatly affects the social and natural conditions and relations among humans and between humans and nature. All this must be taken into account on a new modern basis. This means that those in positions of authority in the modern economy must have a broad consciousness of the effects enterprises have on the world.

The old aim and consciousness inherited from petty production of serving oneself and the property over which someone has control and ownership are no longer suitable. In fact, the old aim has degenerated into seeking maximum profit from ownership and control regardless of the consequences of the activities of the enterprise on other parts of the economy, on human relations and on the social and natural conditions.

This is clearly evident in the reality of thousands of orphaned oil and gas wells that lie neglected by their former owners. The enterprises and government officials in authority not only have refused to hold themselves accountable for the damage they have caused and left behind but also for the refusal to adopt a modern consciousness regarding industrial mass production, which requires having an all-sided plan to humanize the social and natural conditions and infuse the economy with an aim to serve the people.

The Facts

One billion dollars is the estimate for the federal and provincial governments to clean up orphaned oil and gas wells abandoned by private enterprise. A report prepared by the federal parliamentary budget officer Yves Giroux says the $1 billion cost of cleaning up orphaned oil and gas wells in Alberta and Saskatchewan dwarfs the money collected from industry to pay for it.

Map showing location of orphan wells in Alberta.

The report says about 10,000 wells in Alberta and Saskatchewan are currently orphaned. These wells are inactive and have no apparent operator assuming responsibility to address the environmental liabilities. Alarmingly, the report says the number of orphan wells is growing by 35 per cent a year. Enterprises active in the energy sector have put aside only $237 million in security deposits to cover environmental damage, the report says, far below what is needed.

Regan Boychuk of the Alberta Liabilities Disclosure Project denounced the report's $1 billion as "a massive underestimate and great disappointment. They left out the most expensive part." The report does not include the cost to clean up pipelines or other energy infrastructure on the land; it does not even consider oilsands' projects or the more than 7,400 wells that are abandoned but not yet considered orphaned. If those wells were included the current environmental liability would more than double.

The report also does not include any liability for 225,000 wells in Alberta and Saskatchewan that are officially inactive or plugged but not yet abandoned or orphaned by their owners. Nearly two-thirds of all wells in those provinces no longer pump, the highest percentage ever, and most wells declared inactive never start again and require immediate attention.

The Alberta Energy Regulator (AER) says the thousands of inactive wells not yet classified as abandoned or orphaned, but without any authority taking responsibility for them, are "releasing the equivalent of 545,000 tonnes of carbon dioxide every year." The AER says about 10 per cent of inactive wells and seven per cent of abandoned wells leak pollutants into the air or land. Farmers and ranchers regularly complain about poor conditions and weed control around wells, which contaminate their crops and pastures.

Critics also say the report of the federal budget officer does not include the full cost of cleanup only those expenditures associated with tidying up the land surface and removing equipment not the costs of remediating ongoing contamination from underground chemicals or leakage. The report itself acknowledges that "the exclusion of remediation will understate the total cost of well cleanup."

To add insult to injury to the public, the federal report says the government has already devoted $1.7 billion to well cleanup and half of this amount has been given to 10 "viable energy companies" including giants such as Canadian Natural Resources Ltd and Imperial Oil.

Defending the limited conclusions of his report, budget officer Yves Giroux said, "There isn't enough data on the highly variable costs of such cleanups to make a meaningful estimate. The data is very limited on this. The reclamation costs can vary greatly from one well to another."

Critics say no number in the report can be considered "reliable, credible or defensible." For example, the report estimates the average cost of plugging and reclaiming a single well to be about $78,000, which is less than half the estimate from the Alberta Liabilities Disclosure Project.

Regan Boychuk of the Disclosure Project adds as well that the report's focus on orphan wells is "misleading." "It's not about orphans," he emphasized, when this means that all the other wells and infrastructure on the land not yet classified as orphaned are not considered an environmental threat with issues that need to be addressed immediately.

The old narrow consciousness and aim of those in positions of ownership and control are a big reason why they engage in such irresponsible practices as abandoning oil and gas wells. Their narrow aim to serve their private interests blocks the emergence of modern social practices and consciousness. Working people must oppose the outlook which sanctions this backwardness and bring into being an authority in conformity with the modern conditions.

(Photos: TML, HazMat Management, B. Glen)

This article was published in

Volume 52 Number 2 - February 6, 2022

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