Saskatchewan’s oil and gas companies completed 2,030 well abandonments between April 1, 2019 and February 29, 2020, according to an announcement from the Ministry of Energy and Resources. The figure represents an increase of more than 40% from 2018-19 and 240% from 2016-17. An abandoned well is one that has been decommissioned to a safe and environmentally-sound condition.
“This increase in well abandonments demonstrates the commitment by industry and government to manage the entire life-cycle of provincial wells and ensure the safe retirement of unused infrastructure to protect our environment, landowners and the public,” said Energy and Resources Minister Bronwyn Eyre in a statement.
The government credits its revised Directive PNG015: Well Abandonment Requirements for the increase. It says the revised directive provides a more streamlined process and gives the oil and gas industry clear standards to follow.
“These changes have allowed companies to conduct well abandonments in a more efficient and timely manner, which has resulted in this significant increase,” Eyre said.
However, the good news on well abandonment may mask a problem identified by the provincial auditor in her June 7, 2018 report: the growing number of inactive wells in Saskatchewan. The risk posed by inactive wells has made headlines in Alberta, but it may be just as serious a threat to Saskatchewan.
The provincial auditor found that the total number of inactive wells in Saskatchewan had increased by almost 90% between 2005 and 2017. As of February 2018, Saskatchewan had about 30,000 inactive wells that had not been abandoned, a number that is likely to have grown in the subsequent period of continuing low oil and gas prices.
Unlike many state jurisdictions in the United States, Saskatchewan does not require the oil and gas industry to abandon a well after a period of prolonged inactivity.
The oil and gas industry sometimes argues that inactive wells may be returned to productive use, but seldom is that the case. Instead, oil and gas companies sometimes offload inactive wells onto less well-capitalized companies that are less likely to proceed with responsible abandonment (at a cost of roughly $100,000 per well) and are more likely to go bankrupt.