Collapsed Alberta energy company leaves behind 401 'orphan' wells in B.C., more than doubling total

The collapse of an Alberta energy company has left B.C. with hundreds more oil and gas wells to clean up, more than doubling the total number across the province.

The financial troubles of Calgary-based Ranch Energy mean 401 of its oil and gas wells and three of its energy facilities in northeastern B.C. have now been deemed "orphan" sites, bringing the total in the province to 770, according to the B.C. Oil and Gas Commission, the provincial regulator.

Just five years ago, that number was 45.

Gas and oil wells and facilities are deemed to be "orphaned" when energy companies go bankrupt or abandon the site without shutting down or completing reclamation work and then cannot be located by authorities. 

Almost 200 of Ranch Energy's newly abandoned wells are on farmland or private property. Most property owners in B.C. do not own the rights to petroleum or natural gas under the surface of their land. 

Cleaning up these sites could take up to 10 years, the B.C. Oil and Gas Commission told CBC News, though some may be restored "much sooner," it said.

The regulator said cleaning up all 404 sites will cost around $40 million.

Energy companies are required to do such cleanup work, but in cases such as bankruptcy an industry fund is supposed to pay for cleanup costs. The Office of the B.C. Auditor General said last year that the fund is millions of dollars short of what it needs.

In April, the federal government announced $1.7 billion of support to help clean up orphan oil and gas wells in B.C., Alberta, and Saskatchewan. 

The B.C. Oil and Gas Commission says Ranch Energy went into receivership in 2018, but it wasn't until last week that an Alberta court approved the sale of the company's assets.

That's when the provincial regulator formally designated Ranch's B.C. sites as orphans, according to a written statement.

Most of the recently orphaned sites are former gas wells that operated within 50 kilometres of Fort St John, B.C.

'Festering sore'

Two of Ranch Energy's orphan wells are on Arthur Hadland's farm in Baldonnel, near Fort St. John.

He doesn't think oil and gas companies should be allowed to operate if they can't afford to clean up after themselves.

"I'm pretty disillusioned," said Hadland, who grows grass seed and malt barley on his 1,400-acre farm. "It was obvious years ago that there was going to have to be reclamation of these sites and [regulators] just let the industry get away with murder."

Hadland said his family, which has farmed in the area since 1928, never wanted drilling on their land in the first place. He says drilling began on their land in 1956.

Hadland said he got a call from the B.C. Oil and Gas Commission this week telling him the two wells on his land had just been designated orphans and would be cleaned up.

He shared the news over the phone with his 99-year-old father, who lives in a care home. 

"This thing stuck in [his] craw all his life. It has always been a festering sore," said Hadland, who was once a local politician.

Most B.C. landowners don't own subsurface rights to petroleum or natural gas under their property. The provincial government can issue rights to resource companies to explore or drill on private property, and a provincial surface rights board can order landowners to give energy companies access.

"The industry has full powers of exploration to run over the interests of the individual," Hadland said.

He now hopes crews will be dispatched to clean up what Ranch Energy has left behind on about eight acres of his land. 

"I think we're on the way of getting it resolved, having that put to rest," he said.