The Alberta Energy Regulator (AER) ordered troubled Calgary oil and gas producer Lexin Resources to suspend operations last week, leaving hundreds of well sites, pipelines, and other facilities in limbo.
The AER’s largest-ever suspension also raised questions about the care of thousands of other fossil sites across the province, prompting the Pembina Institute to call for a new industry-supported fund to tackle the job.
Lexin turned over responsibility for 1,380 well sites, 201 pipeline licences, and 81 other facilities, including a sour gas plant in southern Alberta, to the province’s Orphan Well Association, CBC News reports.
The regulator “said Lexin failed to comply with orders to address hydrocarbon spills at its sour gas facility, to close and abandon wells, or to pay its administration fees or its security deposit for well reclamation.”
The industry-funded Orphan Well Association is responsible for cleaning up abandoned wells in Alberta. Even after doubling its budget to $30 million last year, it managed to plug only 185 wells.
At that rate, the Association will be caught up in about a millennium. The Lexin legacy adds to a backlog of more than 190,000 oil and gas wells that are “for all intents and purposes abandoned” in Alberta, according to the Pembina Institute. Nearly a third represent a medium or high risk, the think tank adds, “and have the most potential adverse effects, including contamination of surface and groundwater systems, effects on air quality through uncontrolled emissions, and impacts on wildlife and human health.”
Pembina is urging the province to establish “a permanent reclamation fund to cover the cost of abandoned wells when individual companies cannot or will not,” with “considerably larger scope and funding than the current Orphan Well Fund.”