The shale gas boom in northeastern B.C. has left a backlog of thousands of inactive wells that need to be filled in and have their sites restored, B.C. Auditor General Carol Bellringer says in a new report.
Legislation was passed last year to require gas drillers to decommission wells, but the rules lacked a 鈥渢rigger鈥� to determine when that should happen, . By 2018, that left a backlog of more than 7,000 well sites that were inactive but not sealed with concrete and cleaned up.
Bellringer also found that security deposits from drilling companies did not cover growing restoration costs as horizontal hydraulic fracturing led to rapid growth in gas development.
鈥淒ecommissioning and restoration are the operator鈥檚 responsibility, but in cases where sites are 鈥榦rphaned鈥� by bankrupt or absent operators, the B.C. Oil and Gas Commission becomes responsible for the work,鈥� Bellringer wrote. 鈥淭he number of orphan sites in B.C. increased from 45 in 2015-16 to 326 in 2018-19.鈥�
Security deposits from drilling companies are put into an 鈥渙rphan fund鈥� to cover costs, but in 2016-17 the fund was short $16.6 million and the following year it was short $13.1 million.
Number of inactive gas wells has nearly doubled in recent years, but says it now has tools to get industry caught up without cost to taxpayers
鈥� Tom Fletcher (@tomfletcherbc)
In its response to the audit, the B.C. Oil and Gas Commission said it is developing a new 鈥渃omprehensive liability management plan鈥� based on changes to B.C. legislation passed in May 2018. The plan 鈥渉olds industry accountable, addresses unrestored oil and gas sites and protects the environment and public safety,鈥� the commission says in its response to the audit.
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鈥淭hese new tools will address he restoration of orphan sites in a timely manner, while ensuring no direct costs to taxpayers.鈥�
The commission has implemented a policy to restore orphan wells within 10 years of designation, and has agreed with all 11 recommendations in the audit. They include allocating $14 million for the orphan fund for the current year.
tfletcher@blackpress.ca
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