The ABC’s of Well Reclamation in Alberta
In 2018 the Area Based Closure (ABC) 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. This program was designed to help Operators more efficiently and economically deal with well closure activities.
Wells are commonly made inactive when oil and gas prices are low or their productivity declines. Inactive wells require inspections and reporting according to Directive 013: Suspension Requirements for Wells. Often Operators would chase the annual requirements to remain compliant – potentially across the province and this common practice would divert capacity and resources from well decommissioning and reclamation activities.
In order to minimize mobilization costs, the ABC program created incentives for Operators to voluntarily opt into the program. These incentives focus on two things:
- The relaxation of various Directive 013 requirements for medium-risk wells.
- The deferral of abandonment orders for expiring mineral leases on Crown land for a maximum of three years. These incentives allow Operators to focus spending and resources on closure activities according to geographic proximity rather than suspension activities for geographically scattered wells.
Once an operator opts into the ABC program, they must do a few things:
- Commit a site closure program equal to or greater than this dollar value (value of inactive liability X 4.33%) and upload this into OneStop (activities and cost estimate).
- Take the licensees inactive liability total and multiply it by 4.33% (this percent will increase each year to catch up to average percentage of wells that become inactive annually, which was indicated by the AER to be around 6-7%).
- This program has shown to save Operators up to 40% on closure activities and has allowed them to make closure activities a priority.
A significant benefit of this program is that Operators can go into the ABC mapping tool and focus well closure activities on areas where other Operators are planning work. This simplifies resource sharing; allowing all service providers to be more efficiently utilized. Also, infrastructure can be removed simultaneously rather than mobilizing reclamation and remediation equipment multiple times and more significantly impacting the environment. For sites that are difficult to access, this is essential. The ABC program has allowed Operators to collaborate and help each other, which is mutually beneficial for all.
AiM is a strong proponent of this program and we are experienced with designing annual reclamation and remediation plans to remain compliant with the program. Reach out to Janine, Manager of AiM’s Reclamation Dept to discuss how she can assist your organization with an ABC application.
Janine Wildschut, Ph.D., P.Biol
Manager Remediation + Reclamation