Expanded powers for Alberta orphan well group could allow it to operate pipelines, produce oil
Expanded roles will help reduce the number of orphaned wells in Alberta, government says
The Orphan Well Association will be able to produce oil from ownerless wells and operate pipelines, should new legislation pass.
The United Conservative Party government tabled legislation Tuesday afternoon that would expand the powers of the Orphan Well Association (OWA) — an industry-funded, non-profit organization that cleans up wells abandoned by broke companies.
The tweaks are urgently needed to keep well remediation work continuing as oil prices tank worldwide and the COVID-19 pandemic pummels the economy, government house leader Jason Nixon said Tuesday morning in Edmonton.
"We've been clear we see that as a way forward for job creation in the coming months," Nixon said at a press conference.
Bill 12, the Liabilities Management Statutes Amendment Act, would amend two pieces of provincial legislation: the Oil and Gas Conservation Act and the Pipeline Act.
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Expanding the roles and responsibilities of the OWA and the Alberta Energy Regulator will help reduce the number of orphaned wells in Alberta, keep and create jobs and accelerate the cleanup of sites that bankrupt oil companies have deserted, according to the government.
With the pandemic prompting the Alberta government to restrict gatherings to 15 people or less to prevent spread of disease, Nixon said work should still be able to proceed safely on some oil and gas cleanup projects.
If approved by the legislature, the changes would allow the OWA to produce oil from abandoned, viable well while attempting to find a buyer. The OWA could also bring in other companies to run the wells.
The OWA could also operate pipelines, should legislators approve the bill.
The OWA would be able to use an orphan fund not just for cleanup, but to cover the cost of managing operation of oil wells and associated infrastructure.
Changes would also allow OWA to go to court to apply for an insolvency professional to take responsibility for abandoned wells.
Opposition questions bill necessity
NDP leader Rachel Notley said Tuesday the changes could be a major shift in mandate for the OWA. She questioned whether such a significant change was urgently needed, as the government claims.
The legislation could transition OWA to becoming a government oil-and-gas operator rather than an organization that exists to reduce environmental liabilities and enable cleanup, she said.
Notley said such a change should happen in consultation with landowners who grapple with the problem of abandoned wells on their properties.
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Earlier this month, the government extended a $100-million loan to the OWA to accelerate well reclamation work. The organization estimated the loan will allow them to decommission 1,000 wells, start assessment of 1,000 more sites and create 500 jobs.
As of last week, the OWA had recorded more than 2,700 abandoned wells and 4,100 abandoned pipeline segments across Alberta.