The area-based closure program encourages operators to work together on the closing of oil and gas infrastructure. The voluntary program benefits industry by saving it money—pilot programs have shown cost savings of up to 40 per cent—and benefits operators and Albertans by reducing the liabilities associated with inactive sites.
Operators can participate in the area-based closure program in two ways:
- Those that would like to take advantage of new suspension options under Directive 013: Suspension Requirements for Wells are committing to their assigned “inactive liability reduction target”—the amount they must spend in a calendar year on the closing of inactive sites in order to reduce liability.
- Operators that do not request the new suspension options under Directive 013 can participate in the program without committing to a reduction target.
These new options relax requirements for certain low-risk wells, freeing up money for more efficient and coordinated closure activity through area-based closure.
All participants will submit their closure projects through OneStop. Participants that have committed to a reduction target must report their closure activities and associated spending through OneStop, and annual performance reports will be published to help evaluate the success of the program. Those that have not committed to a reduction target are encouraged to report their area-based closure spending.
Pilot Project: Commingled Abandonment
In April 2019, we introduced a pilot project for the commingled (unsegregated) abandonment of zones that were produced through the same wellbore.
Under Directive 020: Well Abandonment, all completed zones in a well must be segregated at the time of abandonment, even if the production was through a common wellbore.
We developed criteria for this pilot project to allow for certain lower risk zones that were produced together to be abandoned together if it poses no risk to the public or the environment. Throughout the pilot, we will monitor the effectiveness of these criteria in identifying such zones.
To participate in this pilot, companies need to contact the Well Operations team at WellOperations@aer.ca for the application process and will need our approval. Companies will also have to plot their pilot area on the area-based closure map through OneStop.
The area-based closure program was developed by the Alberta Energy Regulator, the Canadian Association of Petroleum Producers, the Explorers and Producers Association of Canada, and the Petroleum Services Association of Canada. An area-based closure steering committee, made up of representatives from the AER and the industry associations, will monitor and recommend enhancements to the program.
If you have any questions about the area-based closure program, please contact the AER at ABC.firstname.lastname@example.org or your industry association.