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Dormant well cleanup program sees 1,100 applications in first day

The province says it has received more than 1,100 applications to clean up more than 2,400 dormant oil and gas wells in northeast B.C.
oilwell

The province says it has received more than 1,100 applications to clean up more than 2,400 dormant oil and gas wells in northeast B.C.

Applications opened to the $100-million Dormant Sites Reclamation Program on Monday, May 25, and more than 80 service companies and contractors applied, the province said Tuesday..

"The applications we have received in a single day propose upwards of $152 million worth of reclamation work, which, if completed, will reclaim over 2,400 inactive wells," Energy Minister Bruce Ralston said in a statement.

"The extraordinary interest in the program is great news as we work to get our economy moving again and help clean up the environment."

The program was announced in April as part of a federal economic recovery plan for the beleaguered oil and gas sector in Western Canada. 

It was work that would have taken place anyway, but on a much longer timescale – over a decade. A little over a year ago, the BC Oil and Gas Commission introduced a new levy on the oil and gas industry to raise $15 million a year for dormant well reclamation. The plan was to reclaim all orphan wells in B.C. over the next 10 years.

The federal funding will accelerate the work, and the province says the cleanup program will create 1,200 jobs. 

The program will target wells that have been inactive for five consecutive years and are unlikely to be returned to service. Companies receiving federal funding pay half the costs for dormant wells.

First Nations, local governments, and landowners will be able to nominate dormant, orphan, and legacy sites for priority cleanup starting June 15. The program is split into two phases of $50 million each, and applications for the second half will open Nov. 1, the province said.

Around 7,685 wells are dormant in B.C., with 357 orphaned, or abandoned. Dormant wells are those owned by companies that are still solvent and in operation. Orphan wells are those that have been abandoned by companies that are no longer solvent.

The program will be delivered alongside a $15-million orphaned site reclamation program, and a $5-million legacy site reclamation programs.

The province says funding will be open to oil and gas field service companies and contractors based in B.C., with registration, office and operations in B.C. 

— with files from Nelson Bennett in Vancouver

Email Managing Editor Matt Preprost at editor@ahnfsj.ca.