With Alberta’s economy still sputtering and not expected to rebound until 2023, the knowledge that we are sitting on an enormous economic opportunity is music to the ears of most Albertans. The fact that this opportunity not only addresses current financial and environmental issues but also helps diversify the energy sector is a veritable symphony.
According to a recent report by Energy Futures Lab and the Canada West Foundation, repurposing some of the inactive and orphaned wells in the province could yield substantial benefits in this regard.
Currently, there are about 95,000 inactive and orphaned wells across Alberta, and recent attention has been focused on cleaning them up. In fact, just last year the federal government committed $1 billion to the province in a bid to create jobs and support environmental targets in this area.
We now know, however, that there is more that can be done with this dormant infrastructure. Many of these sites could be repurposed by energy entrepreneurs for alternative energy uses, including geothermal, micro-solar, hydrogen, recovery of lithium or other minerals, or carbon capture and storage. Alberta is well-positioned to benefit from such development.
For example, developing geothermal energy could help put geologists, reservoir engineers, drillers, and other oil patch workers back to work by sharing and expanding oil- and gas-related resources. Repurposing these inactive sites and returning them to productive use also furthers the goals of environmentalists, Indigenous groups, and taxpayers, while eliminating a portion of the difficult (and expensive) problem of aging oil and gas infrastructure. It really is a win-win.
However, for years, energy entrepreneurs have been unable to capitalize on this opportunity to create jobs and help diversify the energy sector. Inflexible regulations that do not allow for site repurposing and a lack of clarity and collaboration among regulators are to blame.
As noted in the aforementioned report, it took over five years for the RenuWell Project to navigate the regulatory hurdles involved in repurposing legacy oil and gas infrastructure for community solar power. This project invests in new lower-carbon technologies for exploration, cleaner extraction, and reduced long-term environmental impacts.
Another project, Alberta No. 1, attempted to repurpose existing infrastructure to generate geothermal energy. Instead, their economic and timeline advantages evaporated, and the murkiness of the regulatory waters has left the project in limbo. Ironically, if they had decided to break new ground rather than minimizing environmental disturbance and repurposing, they would be in a better position today.
As such stories illustrate, Albertans continue to miss out on economic and environmental improvement opportunities. All the while, the sites sit effectively abandoned and untouched.
The Alberta Energy Regulator has already committed to reducing red tape in regulatory processes, so they are well-positioned to seriously consider the recommendations put forward in the report. But while Alberta Energy Minister Sonya Savage has acknowledged that the government is working on a number of these priorities, firm leadership will be required.
Sitting on these abandoned and orphaned wells instead of repurposing them is a forgone opportunity and a shameful waste. To develop alternative energy sources and help foster economic recovery in Alberta, the barriers that have prevented energy entrepreneurs from taking advantage of relevant expertise and assets from the oil and gas industry need to be removed.
And for a provincial government committed to cutting red tape, here is a prime example of where we can reduce costs, speed up approvals, and make life easier for hard-working Albertans and their businesses.
Krystle Wittevrongel is a Public Policy Analyst at the Montreal Economic Institute (MEI).
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