The BC government will plow $120 million in federal funding into a program to accelerate the reclamation of thousands of dormant and orphan oil and gas wells in B.C.
B.C. already has a dormant and orphan well reclamation plan. But the federal government announced in April that it will fund well reclamation in B.C. to the tune of $120 million.
The money is already in hand, said Bruce Ralston, minister of Energy, Mines and Petroleum Resources.
"The program, over two years, will be able to clean up 2,000 wells, which is a pretty big number," Ralston said.
The accelerated program will create 1,200 jobs over the next two years, the B.C. government said Wednesday. Only B.C. contractors will be eligible for funding.
There are more than 7,000 dormant wells in B.C., 357 of which are orphan wells -- i.e. wells that have been abandoned by companies that went bankrupt, leaving taxpayers on the hook for their remediation.
"This is an environmental stain on British Columbia," Premier John Horgan said in a press conference Wednesday. "It's been reported on by the auditor general, repeatedly calling on British Columbia and the industry to clean up its act.
"The funding that's announced today will help us decommission, reclaim or restore more than 2,000 orphaned or inactive wells."
Companies that own existing dormant wells but had not planned to reclaim them anytime soon may be prompted to accelerate their reclamation, since the new federal funding will cover half the cost. Without the federal funding, they would have been responsible for the full cost of reclamation themselves.
In addition to well reclamation, there is $5 million in federal funding for other related habitat restoration. Ralston explained that over a period of decades, oil and gas exploration companies cut hundreds of seismic lines -- corridors in which trees were cleared.
These corridors can act like highways for wolves preying on caribou. Part of the work that will take place is closing those corridors through tree planting.
"The idea is to revegetate those so that they disappear," Ralston said. "So that will also enhance caribou populations as well."
Horgan said communities in northeastern B.C. will have input on which wells or regions should get first priority.
A little over a year ago, the BC Oil and Gas Commission introduced a new levy on the oil and gas industry to raise $15 million a year for dormant well reclamation. The plan was to reclaim all orphan wells in B.C. over the next 10 years.
That will be accelerated with the federal funding. The bulk of the $120 million in federal funding will be used to accelerate the reclamation process, with $100 million earmarked for dormant wells owned by companies that are still solvent.
Another $15 million will go to orphan wells. Those are wells that were owned by companies that are insolvent.
When an oil or gas well runs dry, it typically is decommissioned. This involves filling the well bore with cement, cutting off the steel well bore a few feet below ground, and then covering it up.
Full reclamation is more extensive. It requires removing all infrastructure that may have been left behind, including piping and wellheads. Soil sampling must be done, and any contaminated soils must be removed and replaced with clean soil.
Finally, the area is replanted with trees. In some cases, access roads must also be decommissioned and restored to a natural state.