Alberta has not ruled out asking for help with orphan oil and gas wells

By Nia Williams
CALGARY, Alberta, March 17 (Reuters) - The Canadian
crude-producing province of Alberta has not ruled out asking the
federal government for funding to clean up orphan oil and gas
wells, the provincial government said on Thursday, although no
formal request has yet been made.
Alberta Energy Minister Marg McCuaig-Boyd said the province
would welcome financial assistance for well reclamation but that
specific funding requests so far were related to support for
pipeline approvals, infrastructure projects and extensions to
employment insurance for unemployed Albertans.
"If the federal government is interested in helping clean up
the environment and put people back to work by funding the
cleanup of those wells, we would welcome that," she said.
The issue of orphan wells - which are inactive and have no
legally responsible owner - faces increasing scrutiny in
Alberta, the No. 1 exporter of crude to the United States, as
the global oil price slump forces more producers to shut in
uneconomic wells and pushes some into bankruptcy.
There are about 700 orphan wells in Alberta. The financial
burden of decommissioning them is shouldered by the
industry-funded Orphan Well Association, which saw the number of
wells under its care quadruple last year.
In addition, there are an estimated 75,000 to 80,000
inactive wells in the province, some of which have been
temporarily suspended because they are uneconomic at current
prices, and others that have not produced for years.
Alberta has been battered by weak oil prices as companies
slashed investment, suspended new projects and laid off tens of
thousands of workers, and the concern is the number of orphan
wells could spike as more companies go out of business.
Earlier this week, the Petroleum Services Association of
Canada asked the federal government for C$500 million ($384.85
million) in funding for well decommissioning in Alberta to help
support employment and retain skilled workers.
PSAC Chief Executive Mark Salkeld said about 10 to 15
percent of the 75,000 inactive wells in the province could be
decommissioned for good.
"It has the potential to put thousands of people back to
work, not just rig crews but cementing, logging, wire line
crews, all the services required to properly decommission a
well," he said.
The request echoes a recent call by Saskatchewan Premier
Brad Wall for C$156 million to fund a two-year reclamation
program in his province that could reclaim 1,000 inactive wells
and create 1,200 jobs. L2N15Q24
($1 = 1.2992 Canadian dollars)