Profiting from the dead.  This may be the one time it can be a good thing.    
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   CBC News · Posted: Oct 18, 2019   
      
   The only growing business in the oilpatch: dead wells   
      
   In the middle of a farmer's field, the rumble of machinery can be heard half a   
   kilometre away.   
      
   There aren't any tractors or combines in sight. Instead a collection of cement   
   and water trucks and other equipment surround a large service rig.   
      
   The crew would much rather be busy drilling new oil and gas wells, but with   
   the oilpatch stuck in a seemingly endless downward spiral, the rig hands are   
   just happy to get a cheque.   
      
   Much of the work is like this: decommissioning old wells.   
      
   "The last three months have been pretty good. Things are picking up a little   
   bit," said Jonathan Hofer, a 26-year-old who began working on the rigs when he   
   was 15.   
      
   "When I first started working on the rigs, you were busy all the time. Now, if   
   you get two weeks in a month or sometimes one week, you do pretty good," he   
   said.   
      
   Cleaning up old wells is the only growing business right now in the oilpatch   
   in Western Canada. Still, the rise in business is somewhat limited and is just   
   enough to help keep some small oilfield service companies in business.   
      
   Without it, many more of the firms would go belly up.   
      
   "I joke the only thing worse than being in the service rig business is being   
   in the drilling rig business right now," said Scott Darling, president of   
   Performance Energy Services.  About 70 of the 100 people employed at the   
   business are focused on    
   decommissioning old wells.   
      
   "We can move our service rigs to do abandonments, so it's very lucky that way.   
   It's tougher on the margins, people don't want to spend money on the dead   
   horses, but it helps us get through these tough times," he said.   
      
   The growth potential for decommissioning wells is substantial considering   
   there are about 93,000 inactive wells in Alberta and 139,000 across Western   
   Canada. Some of those wells may once again produce oil and gas if commodity   
   prices improve, although    
   most sit idle until they're eventually cleaned up.   
      
   "There are a few more people getting into it," Darling said of the   
   decommissioning sector.   
      
   "It is a bit bittersweet. This is the end of the life for these wells and it's   
   not big enough of a business to sustain the whole energy services sector.   
   There's still a lot of people out of work."   
      
   One telling statistic reflecting the state of the oilpatch in Western Canada   
   — this year more old wells will be decommissioned than new wells will be   
   drilled.   
      
   As of Oct. 9, there have been 3,666 wells abandoned this year, according to   
   the Alberta Energy Regulator. Meanwhile, the Petroleum Services Association of   
   Canada (PSAC) projects about 2,425 wells to be drilled in the province.   
      
   By comparison, 5,777 total wells were drilled in Alberta in 2009.   
      
   The growth in decommissioning is in part fuelled by an increase in funding by   
   the Orphan Well Association (OWA). The group is tasked with cleaning up old   
   wells, pipelines and facilities that can't be sold when an energy producer   
   goes bankrupt. The    
   Alberta government loaned the OWA $235 million. The money began flowing at the   
   start of 2018 and will continue into 2020.   
      
   The industry-funded OWA said the financial boost from the government loan has   
   made a "substantial" difference as nearly 800 wells were cleaned up this past   
   year, a figure which has increased steadily from 50 wells in 2014.   
      
   A Supreme Court of Canada ruling has also added a degree of urgency.   
      
   Banks are hesitant to loan money or extend credit following the court's   
   decision to prioritize environmental cleanup over the interests of lenders and   
   other secured creditors. That's why some oil and gas companies don't want to   
   have a hefty amount of    
   abandonment liabilities on their books.   
      
   Some oil and gas wells are much easier to decommission than others, depending   
   on the geology and how long ago they were drilled. For those reasons, the cost   
   to an oil and gas producer can vary between $100,000 and $500,000.   
      
   The eventual price tag isn't always known until the decommissioning work   
   begins. That's why some oil and gas companies can be wary of cleaning up   
   wells, especially considering the financial struggles of the industry.   
      
   Oil and gas producers are also sometimes required to do further remediation   
   work after a well is decommissioned to ensure the land is properly remediated.   
      
   No wonder some companies have lacked motivation in the past to clean up old   
   wells, pipelines and other infrastructure, said David Yager, an oilpatch   
   consultant and policy analyst.   
      
   "What's it going to cost? I don't know. When are we going to get a reclamation   
   certificate? I don't know. That's pretty hard to get spending approval for an   
   unknown amount of money for an unknown period of time," he said.   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)