Abandoned oil wells have plagued the industry for years, with environmentalists calling for expensive and labour-intensive decommissioning projects to ensure that these old wells do not pose a risk to the environment or local community. However, new research from Energy Futures Lab and the Canada West Foundation suggests these wells could be repurposed to develop the renewable energy sector.
A report published this week highlights the potential for these wells in unlocking new economic opportunities in Alberta. The main barrier to this type of development, according to Energy Futures Lab, are the hurdles put in place by lawmakers and regulators to converting the old wells.
Julie Rohl of the Energy Futures Lab said of the oil companies, landowners, law firms and others who contributed to the report, “There are entrepreneurs that are trying to reuse old oil and gas infrastructure for new purposes … and what they’re finding is that there are a number of roadblocks”. Further, “One of them is just the quagmire of the regulatory environment and how these sites are managed and regulated by a number of different regulatory bodies.”
There are an estimated 2600 orphan oil and gas sites across Alberta, as well as 3400 orphan pipelines that require decommissioning to be made safe. The report suggests there are a further 95,000 inactive wells across the province.
In 2020, the federal government contributed Can$1 billion (US$806 million) to the clean-up of these environmentally-risky sites. However, the report suggests that the alternative development of these wells could present an economic opportunity for Alberta.
The report explains, “Many — although not all — of these sites are good candidates for repurposing for other energy uses, including geothermal, micro-solar, hydrogen, recovery of lithium or other minerals, or carbon capture and storage”.
Regan Boychuk of the Alberta Liabilities Disclosure Project adds of the project, “It’s a transparent attempt to pass this liability to someone else”. This would effectively shift the clean-up burden from the government to private companies, taking away the cost to the taxpayer. This is significant as the estimated cost of decommissioning the wells across Alberta is around Can$260 billion (US$166 billion).
If regulations were eased, many orphan well sites could be developed into solar projects, among other options, thanks to their existing access routes and infrastructure. This would provide economic incentives for landowners to support the development of renewables on these abandoned sites and would create new job opportunities across the region.
Poor coordination between Alberta’s multitude of regulators means many firms do not even attempt a conversion project. One solar company spent five years appealing to regulators to develop a project on an old oil and gas site due to the strict regulations in place.
There are many regulatory challenges for energy companies attempting to repurpose the site. For example, at present, regulators require energy companies to carry out a full clean-up of the site before a new project can take place, including the removal of concrete pads or roads, even if the company requires this infrastructure for the new project.
Changing these regulations to make them more favourable for companies to develop renewable energy projects on these sites would require the Alberta government to pass a bill stating their preference for natural resource development to occur on previously disturbed land.”
Ultimately, it is on lawmakers and regulators to determine whether these sites can be safely repurposed to enhance renewable energy development. However, the report presents a clear opportunity to diversify Alberta’s energy portfolio, as well as potentially saving billions in decommissioning projects, through the redevelopment of abandoned wells for renewable energy projects.
By Felicity Bradstock for Oilprice.com
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