January 2024
The energy industry has been a main driver of Alberta’s economy for many decades. Over time, this has led to an accumulation of infrastructure – wells, facilities and pipelines – on the landscape in various stages of the life cycle – active , inactive, decommissioned and reclaimed.
Ultimately, all infrastructure and energy development sites must be permanently and safely decommissioned, assessed, remediated if necessary, and reclaimed – activities otherwise known as “closure.” The costs and responsibility for closure – known as “liability” – rests with industry.
Liability is associated with all energy infrastructure regardless of where it is in its life cycle; however, close attention is paid to the amount of liability associated with inactive infrastructure as it is no longer generating income for a licensee to pay for its closure.
Historically, closure activity has not kept pace with the growth of inactive infrastructure, even during economically prosperous times. Between 2002 and 2010, there was significant growth in active wells due to drilling activity. As the number of active wells leveled off and began to decline, the number of inactive wells in the province continued to grow at 5% annually from 2000 to 2020.
Figure 1. Number of active and inactive wells, 2000–2022
Figure 2. Number of wells decommissioned, 2000–2022
In the last two years, there has been a reversal of inactive well trends and a notable increase in the number of wells being decommissioned. This is a positive trend – continued effort and focus is essential to maintain this trajectory.
The following graphs identify the life-cycle status of wells from 2000 to 2022 and facilities from 2019 to 2023. (See Bulletin 2023-34 for more information on how we’re improving the quality of facility life-cycle status data.) Tracking these trends over time will help monitor industry progress on liability management.
Figure 3. Number of wells by life-cycle status, 2000–2022
Figure 4. Number of facilities by life-cycle status, 2019–2023
Glossary
Active
This stage refers to a well or facility that is currently in operation and actively producing or processing energy resources. Active wells include oil, gas, injection wells, disposal wells and observation wells. Some active wells are deemed marginal, when they produce ten barrels of oil equivalent per day or less.
Assessed
Environmental Site Assessments are conducted to evaluate the environmental condition of a site in relation to substance releases (contamination) and determine if remediation is required.
Decommissioning
This stage involves the permanent closure of a well or facility. Typically referred to as abandonment in our directives, decommissioning activities involve the safe and permanent closure of the well or facility, including the plugging of wells, the removal of equipment and other measures to ensure the site is safe and environmentally sound.
Remediation
Remediation (decontamination) activities involve reducing, removing, or destroying substances in soil, water, or groundwater through the application of physical, chemical or biological processes.
Reclamation
Once a well or facility has been decommissioned and the site has undergone necessary environmental site assessment and, if necessary, remediation (decontamination) and reclamation activities to meet regulatory standards, it is considered reclaimed. Reclamation aims to restore the land to a state as close as possible to its pre-development condition.
