By 2025, Oil & Gas Well Clean-up Will Cost $1.1B

abandoned oil well

According to the Parliamentary Budget Officer (PBO), by 2025, Canada’s abandoned oil and gas wells would cost $1.1 billion to clean up.

In a report shared on Tuesday by the Parliamentary Budget Officer Yves Giroux, 36% of wells in Alberta and Saskatchewan are active right now, lowest number on records. And around 37% of wells are currently inactive.

The Alberta Energy Regulator and the Saskatchewan Government stated that there are nearly 460,000 wells in Alberta and 140,000 wells in Saskatchewan.

The PBO said that in the last five years, there has been an increase of 35% in abandoned wells in the two provinces. “As the number of orphan wells increase, so does the expected cost for cleaning up environmental liabilities,” Giroux said in a press release.

Abandoned well clean-up on a nationwide basis is expected to cost $361 million as of 2020, as estimated by the PBO. According to the COVID-19 Economic Response, the federal government will provide $1.7 billion over the next five years to help clean up abandoned wells.

More than 8,600 orphaned wells have been found in Alberta in the last decade, a jump of 700 over the last decade. This growth has been attributed to the decline in oil prices since 2014 and the industry’s downturn, by the Public Budget Office (PBO).

Original source material for this article taken from here

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Written by Olivia Woods

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