March 10, 2000

Alberta bill will expand scope of orphan well cleanup program

A bill introduced in the Alberta Legislature this week would expand the scope of the Orphan Well Program for oil and gas wells regulated by the Alberta Energy and Utilities Board (EUB) to include related facilities such as pipelines, gas plants, batteries, satellites and compressor stations.

The proposed Energy Statutes Amendment Act would increase the energy industry's responsibility for cleanup and reclamation of their facilities at the end of their service lives, allowing the EUB to hold companies responsible for properly closing and cleaning up these facilities. In cases where no financially viable owner could be found, the costs of abandonment and site reclamation would come out of a dedicated fund set up under the Orphan Well Program. Joanne Rosnau of Alberta's Resource Development department told ELW the act will also give the EUB the legislative tools to better track well owners and to regulate well licence transfers.

The act revises and adds new sections to the existing Oil and Gas Conservation Act and the Pipeline Act. A new section outlining the establishment and administration of the orphan fund is added to the former, with a section covering discontinuation and abandonment of pipelines incorporated into the latter. The orphan fund would continue to be administered by the EUB, which would be responsible for designating orphan wells, well sites, facilities and facility sites as such; for determining that the responsible party no longer exists, cannot be located or does not have the means to pay for cleanup; and for authorizing cleanup and reclamation work to be carried out. This section also authorizes the Board to collect a levy from licensees of wells, facilities and unreclaimed sites. Rosnau noted that there will most likely be some increases in overall funds paid by industry, through new levies on these related facilities, and that these will probably be collected during the licensing application process, as is now done for well applications. Even so, she said, the intent of the legislation has industry support, in recognition of the need to provide for proper management of facilities whose service life concludes.

The new section proposed for the Pipeline Act deals with discontinuation and abandonment of pipelines, authorizing the EUB to order a licensee to do so if it deems such action necessary to protect the environment or the public. It includes provisions for continuing licensee liability for abandoned/discontinued pipelines and for payment by licensees of discontinuation/abandonment costs.

More information is available from Joanne Rosnau at Alberta Resource Development, 780/422-3667.

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