A legal challenge has been brought against the Alberta Energy Regulator (AER) by a coalition of landowners and landowners’ rights groups. They argue that the AER is not charging oil and gas companies adequately for the management of orphan wells, which is delaying the cleanup process. Orphan wells are abandoned oil or natural gas wells left behind when an operator goes bankrupt. The cleanup of these wells, known as reclamation, is essential to prevent environmental contamination.
The AER imposes an annual levy on the industry to fund the Orphan Well Association, responsible for managing the well reclamation process. The levy for 2026/2027 was set at $154 million, up from $144 million the previous year. However, the legal challenge asserts that the levy should be higher to ensure timely and sufficient well reclamation.
Represented by the environmental legal charity Ecojustice, the landowners argue that the current levy is inadequate given the increasing number of orphan wells. The Orphan Well Association’s inventory lists over 7,300 wells awaiting decommissioning, with the cleanup cost estimated at $1.66 billion. The challenge emphasizes the urgency of addressing the growing backlog of orphan wells to prevent further environmental harm.
Ecojustice’s clients, including landowner Dwight Popowich, express concerns about the prolonged cleanup timelines for inactive wells on their properties. They stress the environmental risks posed by these abandoned wells, highlighting the urgency of accelerating the reclamation process. The legal challenge seeks a court directive for the AER to reassess the levy amount in line with actual cleanup costs.
Regarding the regulator’s response, the AER refrained from commenting on ongoing legal matters. They emphasized that the $154 million levy endorsed by the Government of Alberta aims to support the Orphan Well Association’s efforts in addressing the increasing number of abandoned oil and gas sites. The AER highlighted the progress made in decommissioning wells and reclaiming sites since 2002, underscoring the importance of ongoing industry support for orphan well cleanup efforts.