Federal Funding to Meet Two Goals

Recently the government of Alberta announced it had returned more than $137 million in oil and gas well cleanup funds to Canada’s federal government. The return of these unused funds, and a smaller amount similarly returned by British Columbia, has raised questions about why the funds were not used. However, while these questions are important, provincial governments dispersed the vast majority of the available funding and made significant headway in plugging orphan and inactive wells despite numerous challenges.

In early 2020 the COVID-19 pandemic gripped the globe and countries around the world essentially ground to a halt. As a result, the price of oil plummeted to negative numbers, prompting the Canadian government to take action. In April 2020, the federal government issued $1.7 billion in funding to plug and remediate orphaned and inactive oil and gas wells in the energy-producing provinces of Alberta, Saskatchewan and British Columbia. In addition to the environmental benefit of cleaning up methane-emitting legacy wells, the funding also served to keep oilfield service workers employed. This ensured that the industry could retain its skilled workforce until prices began to recover.

Alberta received the largest share of this federal funding at $1 billion, with Saskatchewan getting $400 million and $120 million going to British Columbia. Each province quickly set up remediation programs aimed at cleaning up wells, putting oil and gas industry workers back to work, and promoting involvement and support by local and Indigenous communities. Provincial governments agreed to a timeline for the spending, with funds to be allocated by the end of March 2022 and work to be completed by February 2023.

Many Challenges to Overcome

Shortly after funding was allocated the Alberta government faced its first challenge in this endeavor. Given the negative price of oil in early 2020, the funding opportunity proved extremely popular. Provincial officials were overwhelmed by the sheer number of applications and it took longer to get projects approved than expected. However, Alberta was eventually able to approve tens of thousands of projects that would make use of the available funding.

The delays in getting projects started was compounded by the environment itself. Many oil and gas wells in Alberta, Saskatchewan and British Columbia are remote and winter conditions are harsh, with frozen ground and extreme cold making access to well sites and the technical work of plugging and remediating extremely difficult.

Another challenge was a shortage of labor. Despite the aims of keeping the industry workforce afloat, provincial officials and oil and gas companies had trouble hiring, especially in Indigenous areas. Provincial programs aimed to train and hire Indigenous workers to plug wells on Indigenous land, but hiring and training people takes time. The labor shortage was intensified when oil prices finally recovered and the industry resumed normal operations, reducing the number of qualified workers available for employment.

Disappointment Tempered by Success

Despite these challenges, Alberta, Saskatchewan, and British Columbia were largely successful in their efforts to clean up orphan and inactive wells. The Alberta Energy Regulator reported a reduction in inactive wells in the province, going from 91,000 to 83,000 inactive wells. Other provinces also saw reductions, with 2,275 dormant wells being closed in British Columbia

The return of unused funds follows efforts to allow continued use of money for well cleanup projects after the deadline. However, Alberta made use of more than 90 percent of the federal funding and completed many of its goals in the face of overwhelming industry response, harsh conditions, and labor shortages. These unspent funds may represent lost opportunities, but the work made possible by this federal funding led to notable environmental cleanup progress and valuable lessons learned.

Maximizing the Impact of Funding

While federal funding to decommission orphan and inactive wells was impactful, the scale of the problem necessitates more efficient solutions to accelerate plugging and stretch funding.

While cement remains the mainstay for establishing zonal isolation when abandoning wells, surface casing vent flow and gas migration often remain after multiple cement treatments on a certain percentage of difficult to seal wells. Incremental rig time, manpower, and funds are routinely wasted drilling out failed cement plugs and starting from scratch when innovative alternatives exist that can save time and money to expedite abandonment.

BioSqueeze delivers a proven solution to eliminating this unnecessary rework. Our innovative technology utilizes non-pathogenic microbes injected into compromised cement that forms limestone to restore integrity, allowing the well to be permanently decommissioned. BioSqueeze has sealed over 150 wells across the US and Canada and looks forward to working with more orphan well programs to increase the number of wells plugged per year by eliminating time spent drilling out failed cement.