A group of Alberta landowners are going to court to argue that the province’s energy regulator has chronically and knowingly underfunded a program meant to protect the public from the cost of cleaning up abandoned oil and gas wells.
The legal action is the culmination of years of simmering tension between farmers and ranchers and oil and gas producers in Canada’s main energy-producing province, which has struggled to cope with the thousands of so-called “orphan” wells that dot Alberta’s rural landscape.
It puts the Alberta Energy Regulator’s willingness to enforce environmental rules under scrutiny at a time when both the Canadian and Alberta governments are keen to expand domestic oil production in the face of an escalating trade war with the U.S.
Alberta has approximately 7,300 inactive oil and gas wells which in most cases have been left behind in the wake of company bankruptcies. An industry-funded organization called the Orphan Well Association — which is responsible for cleaning up and reclaiming these sites — has decommissioned approximately 8,900 wells since 2002. It has pegged the cost of remediating the remaining backlog at C$1.66 billion.
In an application filed in an Alberta courtroom on Tuesday, two landowners along with the Alberta Surface Rights Federation and the Polluter Pay Federation requested a judicial review of the Alberta Energy Regulator’s legal responsibility to ensure the burden of cleaning up orphan wells is borne by industry, not taxpayers.
Lawyer Susanne Calabrese, who represents the landowners, told reporters Tuesday the Alberta Energy Regulator has consistently set the levy oil and gas companies pay to fund the Orphan Well Association’s work at too low a level.
This year’s levy was set at approximately C$154 million, representing only about 11% of the total estimated well closure cost. Calabrese said the funding to clean up abandoned sites is not keeping pace with the growing backlog, posing health and safety risks to landowners — many of whom are farmers with wells on their property — as well as financial risks to taxpayers.
“The safety net is falling further and further behind,” she said.
The Alberta Energy Regulator declined to comment on the legal proceeding.
Landowner Dwight Popowich, who has been engaged in a years-long battle to have the inactive well on his farm cleaned up, said most rural Albertans welcome oil and gas development, but with the understanding that companies will clean up after themselves.
“That promise, to me and thousands of other Albertans, has been broken over and over again,” Popowich said.
Studies have shown that abandoned oil and gas wells pose many risks, including potential methane leakage, soil and ground contamination, as well as the financial cost associated with cleanup.
(Reporting by Amanda Stephenson in Calgary; Editing by Aurora Ellis)