Canadian Manufacturing

B.C. lays out $120M plan to clean up inactive oil and gas wells

Premier John Horgan says restoring more than 2,000 inactive oil and gas wells would support upwards of 1,200 jobs in B.C

May 13, 2020  The Canadian Press

VICTORIA — British Columbia has announced details on how it plans to spend $120 million in federal funds earmarked for cleaning up inactive oil and gas well sites across the province.

Premier John Horgan says restoring more than 2,000 inactive oil and gas wells would support upwards of 1,200 jobs in B.C.

The federal government announced $120 million for cleaning up so-called orphan wells in B.C. in mid-April, money the province says it intends to spend on three new programs once a final agreement is reached with Ottawa.

B.C. says up to $100 million would be used to reclaim wells that have been inactive for five consecutive years and aren’t likely to come back into service.

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That would provide oil and gas companies based in B.C. with up to $100,000, or up to half the total costs of site clean up, whichever is less.

The province says a second program managed by the BC Oil and Gas Commission would provide $15 million to reclaim oil and gas sites operated by companies that are insolvent, cannot be located or no longer exist.

That’s on top of $27 million already planned to clean up those wells through the end of next year.

Finally, B.C. says a legacy sites reclamation program would provide $5 million to address the ongoing environmental and cultural impacts of historical oil and gas operations.

The province says more than 350 of about 25,000 oil and gas well sites in B.C. are considered orphan and 7,685 are dormant.

Elizabeth Aquin, president and CEO of the Petroleum Services Association of Canada, says the funding will provide much-needed jobs for the oil and gas sector while benefiting the environment.

In a statement released by the province, she said the funding is in line with the association’s advocated approach to cleaning up the well sites “during this unprecedented downturn.”

“This will also help to retain key skills and expertise for Canada’s responsible energy development and stewardship of the land.”

Interim B.C. Green Leader Adam Olsen says the money spent to clean up inactive wells is welcome, but the companies should be held responsible.

“We should have never allowed a situation where companies were able to profit off the extraction of a public resource only to walk away from the mess they created in the process, leaving taxpayers to clean up after them,” he said in a news release.