Years and years of drilling for oil and natural gas in Alberta has resulted in more than just wealth for the province—it’s resulted in thousands of energy sites, no longer in use, dotting the landscape in various states of disrepair.
It’s our job to ensure that companies clean up and close their energy sites so that they pose no threat to the public or the environment.
How an Energy Site Becomes an “Orphan”
Wells, pipelines, and facilities are plugged and decommissioned (“abandoned”) when companies decide to stop using them for oil and gas development. In Alberta, companies are responsible for cleaning up their sites when the sites have reached the end of their productive life and returning the land to a natural state (known as “reclamation”). Doing this job properly is often costly.
If a company goes bankrupt before properly decommissioning its wells, facilities, or pipelines, and reclaiming the associated sites, we take action. We will order anyone who owned a part of the site—known as a “working interest participant”—to carry out this work to properly close the project.
If there is no legally responsible party, we designate the wells, facilities, pipelines, and associated sites as “orphaned.” The Orphan Well Association (OWA)—an industry-funded nonprofit organization established in the 1990s—takes over to decommission these wells, facilities, and pipelines, and reclaim the land. The OWA helps to protect Albertans from footing the bill.
Covering the Costs
We work closely with the OWA to prevent Albertans from having to pay for the costs of closing energy projects. We collect an annual orphan levy from energy companies to fund the OWA’s annual budget. This levy helps to cover the costs of decommissioning wells, facilities, and pipelines, and reclaiming their associated sites.
Holding Companies Accountable
Any company that does not pay the orphan levy is placed on our Debtor Registry. This registry, updated every month, discloses any person or company that owes a debt to the AER.
- Fact sheet: Closure – Abandonment, Reclamation, and Remediation
- Resource story: A Sweet End for Sour Wells
- Resource story: All’s Well that Ends Well