Alberta Regulator Faces Court Challenge Over Orphan Well Cleanup Funding

Two Alberta landowners and two advocacy groups have taken the province's energy regulator to court over how it sets annual levies for oil and gas companies to fund the cleanup of orphan wells. The Orphan Well Association, funded by the industry, has decommissioned around 8,900 wells since 2002, but the estimated cost to remediate the remaining backlog is $1.22 billion USD.

The regulator sets an annual levy on oil and gas companies, which this year landed at approximately $113 million USD. However, the applicants argue that this amount is far too low, representing only about 11% of the total estimated cost to close the existing backlog of abandoned wells.

Landowners claim that the regulator has consistently set levies too low, allowing the cleanup backlog to grow instead of shrinking. They are asking a court to review whether the regulator has met its legal duty to ensure industry, not taxpayers, covers orphan well remediation costs.