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CALGARY ENERGY COMPANY TOLD TO ABANDON HUNDREDS OF WELLS AFTER ONGOING CARE
PROBLEMS

Author of the article:

CP, The Canadian Press

Published Jun 10, 2024  •  Last updated 13 hours ago  •  3 minute read
14 Comments

You can save this article by registering for free here. Or sign-in if you have
an account.

The Alberta Energy Regulator is telling a Calgary energy company to abandon
hundreds of wells, pipeline sections and other facilities over concerns about
care and maintenance of the sites. A de-commissioned pumpjack is shown at a well
head on an oil and gas installation near Cremona, Alta., Saturday, Oct. 29,
2016. Photo by Jeff McIntosh /THE CANADIAN PRESS


ARTICLE CONTENT

A Calgary energy company has been ordered to abandon close to 1,000 wells,
pipelines and other facilities over concerns about care and maintenance of the
sites.



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CALGARY ENERGY COMPANY TOLD TO ABANDON HUNDREDS OF WELLS AFTER ONGOING CARE
PROBLEMS BACK TO VIDEO




But questions remain about whether Tallahassee Exploration will be able to pay
for the multimillion-dollar reclamation plan the provincial regulator has
ordered the company to submit. Phone numbers for the Calgary company’s office
were not in service Monday.

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Article content



In an order issued Monday, the Alberta Energy Regulator told the company it has
60 days to complete the first stage of cleanup for 693 wells, 146 entire
pipelines and 75 facilities.



“Abandonment work, including surface abandonment and removal of cement pads,
debris and produced liquids associated with the wells, must be completed in
accordance with (regulatory) requirements,” the order says.



The company also has 30 days to submit a detailed plan for how it will complete
remediation.



“Tallahassee has not demonstrated it is capable of providing reasonable care and
measures to protect public safety and the environment and is unable to meet its
regulatory and end-of-life obligations,” says the order.



The regulator first issued an order in September for the company to clean up its
sites.



Another order was issued in November, demanding the company provide financial
information and forbidding company officials from being on its site without
approval from the Orphan Well Association.



The association is an industry-funded group that cleans up wells for which no
solvent owner can be found. As of June 1, it had 2,647 sites in its inventory,
which didn’t include Tallahassee assets.

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Article content
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Article content



Tallahassee will remain the owner of those assets although the Orphan Well
Association retains control of their care and custody. Tallahassee remains
responsible for all costs incurred by the association.



Lawyer and regulatory watchdog Drew Yewchuck said about 300 of Tallahassee’s
wells are inactive and are likely to wind up as orphans. The rest could be sold
off to producers comfortable with low-producing assets.



“The (association) will be doing care and maintenance until the bankruptcy
process completes and the wells are either officially transferred to the
(association) or they find some other buyer willing to take them.



“(Tallahassee) can’t close or abandon them. They don’t have the money.”



The Parliamentary Budget Office estimates the average cost of cleaning up a well
at $78,000, although some experts consider that figure low. Still, that figure
would put the cost of remediating all of Tallahassee’s wells at more than $54
million, not including the pipelines or other facilities.



If Tallahassee is unable to meet its requirements, the regulator can pursue
other companies that own shares in the wells.

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Article content



“Where the licensee is no longer able or unwilling to meet their regulatory
requirements, the (regulator) looks to other responsible parties to execute the
remaining closure obligations,” said regulator spokeswoman Coral Hulse in an
email.



The regulator can also issue fines, pursue court action or prevent individuals
in a non-compliant company from owning or operating an energy company in
Alberta.



Tallahassee has a long history of regulatory and financial problems.



In 2019, the Alberta Energy Regulator rated the company’s liability-to-asset
ratio at less than half of what it considered stable. Still, the regulator
approved Tallahassee’s purchase of assets from other troubled energy companies
the following year, even as the Northwest Territories was blocking Tallahassee’s
purchase of wells in its jurisdiction.



Tallahassee failed to pay its regulatory levy and its orphan well levy in 2020,
payments required of all energy operators in Alberta. Also, it did not meet the
mandatory reclamation spending targets the regulator set in 2022.



Earlier this year, British Columbia’s regulator fined the company $40,000 for
improperly managing gas wells, and Alberta fined it for failing to report its
emissions of methane, a potent greenhouse gas.




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