Gas drilling rig near Sexmith, Alta. in the Peace River region, home of B.C. and Alberta’s extensive shale gas drilling area. (Wikimedia Commons)

B.C. needs to catch up in restoring old gas wells, auditor says

Taxpayers won’t be stuck with ‘orphaned’ wells, regulator says

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 “trigger” to determine when that should happen, the audit concluded. 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.

“Decommissioning and restoration are the operator’s responsibility, but in cases where sites are ‘orphaned’ by bankrupt or absent operators, the B.C. Oil and Gas Commission becomes responsible for the work,” Bellringer wrote. “The number of orphan sites in B.C. increased from 45 in 2015-16 to 326 in 2018-19.”

Security deposits from drilling companies are put into an “orphan fund” to cover costs, but in 2016-17 the fund was short $16.6 million and the following year it was short $13.1 million.

In its response to the audit, the B.C. Oil and Gas Commission said it is developing a new “comprehensive liability management plan” based on changes to B.C. legislation passed in May 2018. The plan “holds industry accountable, addresses unrestored oil and gas sites and protects the environment and public safety,” the commission says in its response to the audit.

READ MORE: Coastal GasLink setting up B.C. work camps for pipeline

READ MORE: Stone tools at pipeline route ‘not likely’ in original location

“These new tools will address he restoration of orphan sites in a timely manner, while ensuring no direct costs to taxpayers.”

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.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

Just Posted

What does Ladysmith think about the increase in property taxes?

We asked Ladysmith residents how they feel about this year’s tax hike

Old police station development going ahead as “mixed-use” site

Fred Green hosted the second public consultation on what should be done about the decrepit building

LSS students ready to compete at district wide robotics competition

Students will showcase their engineering savvy with VEX robotics

Ladysmith hikes property taxes by 3.4 percent

Council approves 2019 budget that reflects the rising cost of materials and services

B.C. man’s failed bid to bar People’s Party name from byelection ends in $20k order

Federal judge shut down ‘nonsensical’ motion to bar use of party name in Nanaimo-Ladysmith byelection

600 new campsites coming to provincial parks and recreation sites across B.C.

Tourism Minister announced half of the new spots to 13 most popular provincial parks

Raptors beat Bucks 105-99 to move within 1 game of NBA Finals

Leonard scores 35 as Toronto takes 3-2 series lead over Milwaukee

B.C. Supreme Court dismisses review around ferry workers’ right to strike

B.C. Ferry and Marine Workers’ Union collective agreement expires November 2020

Municipalities protest after B.C. declares marijuana crops ‘farm use’

UBCM president seeks answers in letter to John Horgan government

CMHC defends mortgage stress test changes amid calls for loosening rules

Uninsured borrowers must now show they could service their mortgage if rates rose two per cent

B.C. woman left ‘black and blue’ after being pushed off 40-foot cliff at lake

West Shore RCMP looking for witnesses as investigation continues

Thunderstorms to bring heavy rain, risk of flash floods in the southern Interior

Ten to 30 millimetres of rain to fall over the early weekend

Unbe-leaf-able: Agassiz man finds more than 200 four-leaf clovers in a month

Walt Hardinge has found more than 219 four-or-more leaf clovers this spring alone

Crews fight fire with fire to keep blaze from northern Alberta town

The wildfire now covers some 920 square kilometres

Most Read