Levy charged to Alberta oil companies too low to cover orphan well costs, says report

The Canadian Press

· Posted: May 27, 2025 2:22 PM EDT | Last Updated: 2 hours ago

A caller study is informing the yearly levy charged to Alberta lipid companies to money the cleanup of orphaned lipid and state wells remains excessively debased to support up with the complaint of surrendering.

The report written by Drew Yewchuk, formerly a unit lawyer with the University of Calgary's Public Interest Law Clinic, says this year's levy complaint combined with debased rates successful erstwhile years is starring to an estimated backing shortfall of $1.2 billion.

The levy funds the Orphan Well Association, a non-profit entity overseen by manufacture and regulator officials and tasked with reclaiming wells that are orphaned erstwhile lipid and state companies spell bankrupt.

The relation says it has much than 3,700 wells connected its books that request to beryllium decommissioned and reclaimed, which could outgo much than $860 million.

Dwight Popowich's alfalfa workplace adjacent Two Hills is among the properties with infrastructure that has yet to beryllium decommissioned.

"We don't cognize if this happening is leaking oregon not," helium said. "We don't cognize if this happening is going to stroke up 1 time arsenic we spell beside it with a tractor and ignite this thing. We don't know. It is sitting determination with cipher looking aft it."

Popowich said helium was told it volition instrumentality 10 to 12 years for crews to statesman cleaning up the good connected his land, owed to the Orphan Well Association's deficiency of funding.

"We cognize the value of lipid and state to this province, but don't instrumentality vantage of us. And that is precisely what is happening," said Popowich.

Yewchuk's study says the $144 cardinal successful levies the Alberta Energy Regulator (AER) precocious approved to beryllium collected this fiscal twelvemonth continues the inclination of underfunding for the Orphan Well Association.

"The AER's accepted attack has been catastrophic failure," said Yewchuk.

"Before mounting the levy each year, the AER should beryllium holding a nationalist hearing. It should instrumentality submissions from the nationalist and those who volition beryllium impacted, including onshore owners and agrarian municipalities, and contented a determination with reasons explaining however the levy was acceptable and however it ensures the sustainability of the orphan fund," helium said.

Since the relation volition besides request to repay much than $300 cardinal successful national and provincial authorities loans implicit the adjacent 10 years, Yewchuk says Alberta's orphan good concern volition lone get further retired of hand.

A spokesperson for the vigor regulator says it hasn't seen the study and was incapable to remark connected it.