The Orphan Well Association (OWA) says 982 orphan wells were decommissioned in 2019-2020, a 23-per-cent increase from the previous fiscal year. In addition, the overall inventory of orphan wells to be decommissioned declined from 3,128 to 2,983, despite the addition of 848 wells to the inventory. It’s good news that shows the positive impacts of investments by both industry and government to return wells no longer in use to landowners or nature. The work is also boosting employment in western Canada’s hard-hit oilfield services industry.
During the same period, the number of sites in the OWA reclamation inventory (that is, locations where a well or wells have been decommissioned but the land surface requires treatment) increased 54 per cent to 3,319, up from 2,151 in the previous fiscal year. It can take several years for sites to be ready for a detailed site assessment required for a reclamation certificate application. The OWA expects to see an increase in the reclamation certificates issued in the 2020-2021 fiscal year.
OWA executive director Lars De Pauw attributes the increase in well decommissioning to increased funding from industry and government sources. Growing field activity has other benefits as well, such as improving expertise and training, and putting people back to work in the midst of industry challenges from low commodity prices, lack of market access and the COVID-19 pandemic.
Area-based closure (ABC) is another contributing factor to the increased pace of decommissioning. This is a regional strategy that addresses multiple sites, wells and facilities in a given geographic area instead of moving people and equipment back and forth between distant sites. ABC allows crews to take best advantage of local industry expertise and services.
The average cost of decommissioning a well declined to $29,000 from $34,000, demonstrating the cost benefit of bundling projects within a region to maximize efficiencies.
“With increasing experience, we are getting jobs done better, faster and at lower cost,” De Pauw comments.