The cost of cleaning up abandoned oil wells across Alberta may be upwards of 3 times more than initially thought. A new report from Alberta Liabilities Disclosure Project says the price to clean up the nearly 300,000 active and inactive sites around Alberta could sit as high as $70 billion.
“The Alberta Energy Regulator hasn’t come clean on how much it will actually cost to deal with this mess, but our new data raises the floor of the debate. We need the government to tell Albertans the truth, so we can make a plan to deal with this ticking time bomb,” says lead researcher Regan Boychuk.
The report claims to use AER internal documents and methodologies to determine the exact price on each well in the province. President of the Grande Prairie Petroleum Association, Rob Petrone says those in the industry has been well aware of the growing concern for years, and remain on top of the situation as best they can.
“It’s something that has developed over a long period of time and it’s going to take time to get the capital to go and abandon these wells and facilities as we need to.”
However, Petrone believes the prices could be inflated on the part of the disclosure project, as organizations are creating new efficient ways to shut down end-of-cycle wells.
“The abandonment costs are starting to come down, and have come down significantly from last year. Again, we just keep working with new technology and capital that’s available to abandon these wells and get them off the books. It’s a multi-year project no doubt about it.”
The Alberta Energy Regulator believes the cost of completing currently abandoned wells will cost around $18.5 billion.