Peace Country explosion raises questions about safety of shut-in wells

Claude Labrecque was watching the morning TV news a few weeks ago when an explosion rocked his trailer. He opened the window and saw burning storage tanks about 500 metres from his home.

No regulations in place to require clean-up, researcher says

The Alberta Energy Regulator is investigating an explosion at this shut-in wellsite near Nampa, south of Peace River. (MD of Smoky River Fire Department)

Claude Labrecque was watching the morning TV news a few weeks ago when an explosion rocked his trailer.

"It was such a strong explosion, I've never felt anything like that.

"The first thing I thought was that someone had opened the door and let off a shotgun in my trailer," said Labrecque, who has been cattle ranching near Nampa, northwest of Edmonton, for 30 years.

Once he figured out where the blast had come from, he opened the window and looked toward the burning storage tanks about 500 metres from his home.

"I could see pieces of steel up in the air, flying towards me. It was about 500 to 600 feet up. I was pretty shook up. I hope I never feel another one like that."

The wellsite on Labrecque's land is leased by Baytex Energy, a Calgary-based oil and gas company.

An explosion like the one Labrecque felt that morning should serve as a wake-up call, according to an independent industry researcher.
Oilpatch researcher Regan Boychuk (Supplied)

"It points to the fact of how important it is to properly regulate the hundreds of thousands of inactive and abandoned wells across Alberta," said Regan Boychuk, who was on a team of experts that advised the Alberta government's royalty review panel.

Boychuk said thousands of old oil and gas wells can be found in every corner of the province, but there are no regulations in place to require anyone to clean them up.

"Albertans should be carefully calibrating how much oil we have left to responsibly produce, and how much it's going to cost to clean up the legacy of a century of oil production in Alberta," said Boychuk, past director of research at the University of Alberta's Parkland Institute. "And we should make sure our regulators have a concrete plan in place to make sure it's all cleaned up."

A well could be shut-in for days, weeks or months, Ryan Bartlett, a spokesman for the Alberta Energy Regulator, said in an emailed statement.

There are no specific requirements for licensees to follow when a well is shut-in, Bartlett said, but "they must continue to follow AER requirements for safe operation of the facility."

According to Alberta's Orphan Well Association, which is funded mostly by industry and the AER, the number of new orphan wells continues to rise.

When a company goes bankrupt or ceases operations and its owners can't be found, the well and its cleanup costs are handed over to the OWA. Oil and gas companies in Alberta pay into a fund that helps pay the cleanup costs, which can run into hundreds of thousands of dollars.

"This year's increase is attributed mainly to an increase in corporate insolvencies, due to the drop in commodity pricing in the latter part of 2014 and in 2015," the association said in its June 2016 annual report.

'I'll always be wondering if there's going to be another explosion'

The number of wells from bankrupt companies has quadrupled in the past two years. It has 768 on the list now to be abandoned and 755 to be reclaimed.

Claude Labrecque only has one lease site on his property. But he estimates there are 50 to 60 storage tanks in the area, and said he expects there will be more in future.

Labrecque wasn't injured in the recent explosion, and there was no damage to his trailer. The blast was felt by residents who live up to three kilometres away.

"I'll always be wondering if there's going to be another explosion," said Labrecque, who has no intention of moving away.

Labrecque said Baytex Energy is compensating him for cleaning up his 30 acres of oats that were damaged by chunks of burned insulation from the explosion.

Bartlett said Baytex is conducting a detailed investigation into the cause of the explosion, and is required to submit its report to the AER by Thursday.

Andrew Loosley, director of stakeholder and community relations for Baytex Energy, said the site had been shut-in since January and the well had been "valved-off."