Energy company ordered to abandon hundreds of wells over maintenance issues

This article was written by the Canadian Press and was published in the Globe & Mail on June 11, 2024.

A Calgary energy company has been ordered to abandon close to 2,000 wells, pipeline sections and other facilities over concerns about care and maintenance of the sites.

But questions remain about whether Tallahassee Exploration Inc. 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 operation Monday.

In a release issued Monday, the Alberta Energy Regulator told the company it has 60 days to complete the first stage of cleanup for 817 wells, 964 pipeline segments and 77 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,” Monday’s order says.

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 Tallahassee’s wells at nearly $64-million, not including the pipelines or other facilities.

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.

Tallahassee will remain the owner of those assets although the Orphan Well Association will take control of their care and custody.

Tallahassee has a long history of regulatory and financial problems.

In 2019, the Alberta Energy Regulator rated its liability-to-asset ratio at less than half of what it considered stable.

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.

Author: Ray Nakano

Ray is a retired, third generation Japanese Canadian born and raised in Hamilton, Ontario. He resides in Toronto where he worked for the Ontario Government for 28 years. Ray was ordained by Thich Nhat Hanh in 2011 and practises in the Plum Village tradition, supporting sanghas in their mindfulness practice. Ray is very concerned about our climate crisis. He has been actively involved with the ClimateFast group (https://climatefast.ca) for the past 5 years. He works to bring awareness of our climate crisis to others and motivate them to take action. He has created the myclimatechange.home.blog website, for tracking climate-related news articles, reports, and organizations. He has created mobilizecanada.ca to focus on what you can do to address the climate crisis. He is always looking for opportunities to reach out to communities, politicians, and governments to communicate about our climate crisis and what we need to do. He says: “Our world is in dire straits. We have to bend the curve on our heat-trapping pollutants in the next few years if we hope to avoid the most serious impacts of human-caused global warming. Doing nothing is not an option. We must do everything we can to create a livable future for our children, our grandchildren, and all future generations.”