Alberta posted a big spike in the number of oil and gas wells abandoned by industry in recent months.
Low commodity prices have resulted in an “unprecedented number of corporate failures,” which has ballooned the inventory of so-called orphaned wells without owners financially capable of cleaning them up, according to an industry association.
The Orphan Well Association (OWA), the group that assumes responsibility for non-producing wells before plugging them and restoring the surface with funds from industry, listed more than 1,100 abandoned wells in June, a 45 per cent increase since March.
Similarly, the association had an inventory of 540 well sites in need of surface restoration, as of March 31. By the end of June, there were 744, a nearly 40 per cent jump.
“Everybody understands that the inventory is going to go up,” said Brad Herald, chairman of OWA, adding the experienced group will be able to handle a big injection of wells in need of cleanup.
“We’ve been in this program for a couple of decades, and we’re not going anywhere,” said Herald, who’s also a vice-president at the Canadian Association of Petroleum Producers.
On average, it costs $60,900 to plug and seal an abandoned drill site.
