B.C. Faces $3-Billion Tab for Inactive Oil and Gas Wells as Fracking Boom Gains Momentum
British Columbia now has more than 10,000 inactive oil and gas wells, and the cost of cleaning them up stands at C$3 billion and rising, according to a new report by the provincial auditor general that also tracked a seven-fold increase in “orphan” wells whose owners are bankrupt, insolvent, or can’t be found.
Of the more than 10,000 sites, the audit of the B.C. Oil and Gas Commission (BCOGC)’s management practices concluded that 7,474 “had yet to be dismantled, filled, or capped for environmental remediation purposes,” CBC reports. “That number had nearly doubled from 3,800 in 2007.”
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The number of orphan wells increased from 45 to 326 between 2015 and 2018.
“Auditor General Carol Bellringer raised concerns that energy companies in B.C. are not required to decommission and restore well sites unless explicitly ordered to do so, and that the province lacks the proper tools to deal with the problem,” CBC states. “The report also found that the fund set up to pay for decommissioning orphan wells in B.C. is short millions of dollars—$16.6 million in 2016 and $13.1 million in 2017.”
The BCOGC agreed with Bellringer’s findings and said it is “working to address all of the matters raised in the report.”
CBC points to orphan wells as “a growing problem for farmers and landowners across western Canada who are left to deal with the problem of unused, non-decommissioned wells sitting on their property.” In B.C., all but one are in the northeast, the majority of them centred around Fort St. John and Dawson Creek. “Farmers in the area are increasingly concerned about the impacts of the oil and gas industry,” the national broadcaster adds, citing the University of the Fraser Valley’s Lenore Newman, a Canada Research Chair in food security who recommended new measures to protect B.C.’s agricultural land in a report last year.
“What happens if the company goes away and doesn’t clean up a 20-acre industrial site that’s in the middle of farmland?” she asked. “We tend to forget how much [agricultural] land is in the north. Which is unfortunate, because as the climate warms, that soil is actually more and more valuable.”
On The Narwhal, reporter Sarah Cox pieces together the story of a “large, leaking fracking pond” about 400 kilometres north of Fort St. John, one of 700 left behind last year when Calgary-based Ranch Energy Corporation went into receivership. “The storage pond is filled with 113,000 cubic metres of sludge and water that may be contaminating soil and groundwater through a documented leak in its outer lining,” Cox writes, citing the BCOGC.
But tracking down the owner was a chore: the Commission issued a control order 20 months ago to Predator Oil BC Ltd., which had sold Ranch the wells. Ranch’s receiver, Ernst & Young, now says the company’s estate can’t afford the clean-up.
The story “highlights some of the mounting financial and environmental problems created by B.C.’s fracking industry,” Cox writes, in the introduction to her longer feature report. [You really want to read it in full—Ed.] “And that’s even before a fracking blitz gets under way in the province’s Peace region, already covered by thousands of wells, to supply gas for the $40-billion LNG Canada project that will ship liquefied natural gas overseas.”
The Narwhal notes that Ranch was one of three B.C. fossils that went bankrupt last year, and 300 to 500 of its wells could still be designated orphans, producing clean-up costs in the range of $40 to $90 million.
“When companies like Ranch become insolvent, the provincial government is left holding much of the substantial clean-up bill for the industry equivalent of a dine and dash,” Cox writes.