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Old 10-30-2020, 12:47 PM
ehrgeiz ehrgeiz is offline
 
Join Date: Sep 2011
Location: Edmonton
Posts: 311
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Quote:
Originally Posted by Fisherdan View Post
Inactive wells, pipelines, etc are liabilities because they require dollars spent for reclamation. In order to begin a new well, the company is legally required to clean it once it’s finished. These companies are not cleaning up after themselves, and subsequent governments have never forced the issue. So the liabilities keep growing and growing… To the point where these companies will not be able to do it without a massive Government (taxpayer) subsidy.

I agree, from a business point of view it is smart. From an ethical point of view, however, it’s awful. These companies are paying out big dividends to wealthy investors… and waiting for regular joe blow taxpayers to foot the bill for cleaning up their mess. And meanwhile, the environment takes another hit.

I’m not against oil and gas... or resource development in general. I just wish that they would simply clean up after themselves, and do the job right.
To speak to pipelines directly, they're not really an environmental liability. When a pipeline is changed to an abandoned status it needs to be purged of all substance, cut and capped. Generally the pipes are left inert in the ground and never bother anyone. Operators or the AER still have to address them for 1st calls and are also responsible if they're ever exposed due to erosion. When that happens they usually just remove that section entirely. Some older lines had asbestos and could arguably present an environmental hazard, but these are few and really not an issue if left undisturbed in the ground. Lastly, if the land is going to see some form of high density development the abandoned lines are often removed during the earthwork development process and present minimal impact to a developer when you're already moon-scaping the parcel to regrade it from scratch.

Honestly, from my experience the biggest nuisance of abandoned legacy pipeline is often inconvenience to the farmers in cultivated fields due to subsidence resulting from historically poor soil handling processes. That's about it.

From the well perspective we would agree that more can be done through the GOA and the AER to incentivize abandonment and reclamation, particularly when the commodity is up and revenue is good. A careful balance is needed though as new development helps fund annual reclamation programs.

From a forward looking perspective, a cause of this 8 decade issue has already been partially solved. Historically vertical wells required significantly more infrastructure and leases. Technology has advanced directional drilling allowing 4, 8 and beyond wells from a single large lease. This optimization helps ensure we have less infrastructure to reclaim and more revenue associated with a single site to allocate for future abandonment and reclamation.

Sorry, just realized we're on quite a tangent from the original thread...
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