New Plan Includes First Timelines in Western Canada for Oil and Gas Well Cleanup

New Plan Includes First Timelines in Western Canada for Oil and Gas Well Cleanup

The BC Oil and Gas Commission (Commission) has introduced a new regulation, making B.C. the first province in western Canada to impose in law timelines for the restoration of oil and gas wells. The Dormancy Regulation is included in the Commission’s new Comprehensive Liability Management Plan (CLMP) which ensures 100 per cent of the cost of reclaiming oil and gas sites continues to be paid for by industry. The changes are a result of legislation brought in by the provincial government in spring 2018, giving the Commission the tools needed to enhance management of inactive and orphan sites.

The CLMP ensures no direct cost to B.C. residents, protects public safety and safeguards the environment. It achieves this through three primary components:

Liability management

The Commission is enhancing stringent checks of each company’s financial health and history with the continued goal to mitigate liability risk and minimize pressure on the Orphan Site Reclamation Fund (OSRF). Every transaction is evaluated to make sure companies have the means to manage assets through to closure.

Improving the rate of inactive site restoration

The Dormancy Regulation speeds up the rate at which inactive sites are returned to their pre- activity state. The regulation gives each dormant well site a prescribed cleanup timeline and imposes requirements for decommissioning, site assessment, remediation, reclamation/restoration, notification and reporting.

Addressing orphan sites

A new liability levy to fund orphan site restoration is being phased in over three years. The levy replaces a previous fixed tax on marketable gas and petroleum (see IB 2019-01 Change to Orphan Liability Levy). Of approximately 25,000 oil and gas wells in B.C., about one per cent are orphans which are restored through the industry-funded OSRF, while about 99 per cent of wells are under the care and control of viable operators who continue to be responsible for site cleanup.

The new regulation increases opportunities for Indigenous communities and land owners to identify high priority sites for reclamation. The CLMP enhances opportunities to collaborate with Indigenous communities and examine the role of traditional knowledge in restoration priorities.

An integral part of the CLMP includes rigorous compliance and enforcement checks, proactive monitoring and inspection, and investigation and enforcement of alleged non-compliance.

A list of B.C. dormant sites is available on our Dormant Sites web page.