Transformation of Well Sites for Renewable Energy
Transformation of Well Sites for Renewable Energy
Old Oil and gas drilling sites have tremendous potential to be transformed into renewable energy power
Introduction
- There are hundreds and thousands of dormant oil and gas wells across Canada – mainly across the western provinces.
- These sites left un-remediated can pose significant health environmental, and financial risks.
- When an oil or natural gas well is no longer productive, the operating company is required to remove equipment and reclaim the site to current regulatory standards.
- However, inactive, suspended, and abandoned wells with no identifiable owner – whether due to negligence, reasons of financial insolvency, or lack of proper support – become “orphaned.”
- Rather than remediating the land which can be very expensive, renewable energy can be installed in place of old orphaned well sites.
Canada has numerous inactive oil and gas wells, with the majority located in the western provinces. Alberta and Saskatchewan – the two largest energy-producing provinces – are home to the vast majority – 91 percent – of Canada’s onshore oil and gas wells. Of the Prairie provinces’ 600,000 wells, only 35 percent of the wells in Alberta and 39 percent in Saskatchewan were actively producing according to a report by Canada’s Parliamentary Budget Officer (PBO) in 2022.
This means more than half the prairie provinces’ wells no longer produce oil and gas, but have yet to be cleaned up. And the pace of abandonment is accelerating. The number of inactive wells increased by more than 50 percent between 2015 and 2020. Over half have been inactive for more than a decade and even relatively new wells, once closed, have less than a one-in-five chance of being reactivated. More and more are simply deserted. Over the last six years (since 2021), the number of orphan wells has quintupled, the report says.
Since 2010, the number of wells left untouched has skyrocketed, costing billions in clean-ups, Canada’s Parliamentary Budget Officer estimates the clean-up cost for those wells will reach C$1.1 billion by 2025. These sites have been de-commissioned and now sit idle waiting to be reclaimed or in other instances, such as when an oil company files for bankruptcy, they are left abandoned and orphaned. Many companies have stopped paying rent to landowners, and most always, the public picks up the tab. Rural Municipalities Alberta says the amount of outstanding property taxes from the oil patch has tripled since 2019 to $245 million.
As the number of unplugged, abandoned, and orphaned wells rises, so do the opportunity costs, environmental costs, and the likelihood that governments will need to spend increasing amounts of money to fund their cleanup, says Vanessa Corkal, a policy analyst with the International Institute for Sustainable Development (IISD).
The financial burden is not the only concern. These wells can also present risks to the environment and safety, as they have the potential to release methane and other harmful substances into the air and groundwater. The energy regulator in Alberta has reported that around 10% of inactive wells and 7% of abandoned wells are found to be leaking. Farmers and ranchers have expressed their dissatisfaction with the inadequate weed control that contaminates their crops and pastures. Failure to remediate these well sites could lead to severe health and environmental risks.
The Renewable Energy Solution
A large subset of the millions of abandoned, dry, or unproductive wells in North America, could be leveraged for the production of energy through renewable energy assets. More often than not, these orphaned sites have the existing infrastructure to implement renewable energy plants. These sites are typically already well equipped with access to electrical supply and existing roads within proximity to nearby power lines which can be interconnected with the electric grid. Since renewable energy is also being installed, there is no need for ground reclamation work which can be very expensive and time-consuming, thereby reducing the development costs and timelines for renewable energy project developers. Additionally, the redevelopment of abandoned sites minimizes land-use conflicts and risks to stakeholders.
Retrofitting the unused wells to harness and deploy renewable energy offers an economical approach for governments to turn this type of “liability” into an asset. By reusing this type of infrastructure it may be possible to ease some of the financial burden imposed on taxpayers.
There is a strong case for repurposing orphaned well sites as renewable energy production sites, says Julia Rohl. One of the easiest examples is how an old site could be used for solar projects, as it may already have the road access, the lease, a graveled site and the nearby power lines to tie into.
Solar panels can be installed around the wellhead and connected to the power grid, providing clean energy to local communities and in some instances a line of income for agricultural land owners.
In the provincial strategies to clean up orphan and inactive wells, many citizens have advocated for using funds to examine the potential for other energy uses such as solar, geothermal, or hydrogen production. In some cases, wind turbines can also be installed on the land around the orphaned wells, taking advantage of the existing infrastructure to connect to the power grid.
Repurposing orphaned wells for renewable energy production can provide a number of benefits, including reducing greenhouse gas emissions, stimulating local job growth, and reducing the environmental and safety risks associated with abandoned wells. However, it’s important to ensure that the wells are properly decommissioned and that any potential risks associated with their previous use are addressed before any renewable energy projects are undertaken.
According to The Nature Conservancy’s director of nature and economy programs, Eriks Brolis, “The world is moving toward a low-carbon future. Solar energy is an important opportunity for historically coal-producing regions to continue serving as domestic energy powerhouses. Policies that incentivize the development of robust clean energy supply chains in these communities will help ensure the maximum benefit to people and nature.”
