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Landowners can nominate wells for closure under new program

Alberta Energy Regulator added nomination component to program designed to reduce old well inventory

A new initiative allowing landowners to nominate inactive or abandoned oil and gas wells for cleanup could help direct focus to higher-risk sites, says a rural municipal leader.

Beginning this month, the Alberta Energy Regulator (AER) has opened the door for property owners, First Nations and Métis leaders, municipalities, government ministers and those licensed to use a piece of land to nominate wells that have been inactive or abandoned for at least five years.

If the nomination is accepted by the AER the company in charge of the well site must develop a closure plan. However, there is no guarantee a nomination will be accepted and the AER says closure could take up to 15 years depending on the complexity of the site.

Rural Municipalities of Alberta president Paul McLauchlin believes the program has the potential to shine a light on the well sites that are the cause of most concern to landowners.

One of the criticisms the RMA had of the federal government’s $1 billion well cleanup program rolled out in 2020, partly as a job creator during the pandemic and the oil industry crash was that the money was often not spent on the most high-risk wells. Industry cleanup programs were often more focused on being cost-effective and efficient and directed their efforts to certain areas, rather than singling out specific high-risk targets.

“(The nomination program) gives a little more input from the landowner and from the municipal standpoint. It makes for a better system and I am definitely in favour of that approach of hitting the high-priority sites,” said McLauchlin on Friday.

McLauchlin sees it as a good way to improve the Inventory Reduction Program, which is aimed at boosting the number of closures done, reducing liability and returning more land to its former state.

Closure nominations are part of the program, along with closure quotas that specify a minimum amount companies must spend on oil and gas closure work each year. About $700 million is slated to be spent this year.

McLauchlin said he has already heard some interest expressed in the new program from some of the 69 counties and municipal districts represented by his organization. According to AER’s website, Camrose, Minburn and Wetaskiwin Counties and the Municipal District of Taber have already nominated well sites.

Polluter Pay Federation vice-chair Mark Dorin calls the nomination program a “nothing burger.”

Like so many AER initiatives it looks good on paper but he doubts it will have much impact because the regulator has a history of not enforcing its own rules and exercising its own authority, said Dorin.

Under the nomination program, there is no obligation on the part of AER to accept the nomination, he added. Even if they do, and a company agrees to closure, AER does not have to impose a timeline for the work to be done.

“They might impose a timeline, but they don’t have to. And we’ve never dealt with one of these (nomination programs) before so we don’t know what they will do.

“We don’t know if the closure program will ever result in a closure, and we wouldn’t know for years. In my personal opinion, the UCP wants landowners to think they’re doing something for them.”

Dorin said when he first heard about the nomination program, he saw potential to improve the existing system, but there has been no regulatory follow-up.

“The Legislature is saying let’s bring in something new so landowners can nominate these sites. One might reasonably expect the regulator to make some rules that have a little bit of teeth to them —but they don’t.”

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Paul Cowley

About the Author: Paul Cowley

Paul grew up in Brampton, Ont. and began his journalism career in 1990 at the Alaska Highway News in Fort. St. John, B.C.
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