Every company that explores for and develops Canada’s oil and natural gas resources is financially responsible for safely managing wells and associated facilities. This includes all stages of a well’s life cycle: exploration, development and operation, abandonment and reclamation.
Life Cycle of a Well
What is the Average Life Span of a Well?
The average life span of an oil or natural gas well is 20 to 30 years. However, new technologies are being developed to find new ways to extend the life span.
The life span of a well is based on the active years the well is in production. ‘Active’ is one of the six main life cycle classifications of a well.
There are six main classification within the life cycle of an oil or natural gas well. A well may be Active, Inactive, Suspended, Abandoned, Orphaned or Reclaimed. The life cycle of any well begins with an active classification and ends after reclamation.
An oil or natural gas well is considered active when it is producing oil or natural gas.
The well is inactive when it has not produced oil or natural gas in 12 months. This is usually a temporary situation – production can be expected to re-start.
A suspended well is not producing and has been safely secured, but may produce in the future although putting the well back into production takes some effort to reverse the measures taken to secure the well.
An abandoned well is permanently shut down, plugged, wellhead removed, and considered safe and secure by regulators. Upon well abandonment, the site is remediated and reclaimed. Companies assess the presence of soil contamination, produce a report detailing how contamination will be mitigated, and confirm the site has been remediated in accordance with provincial requirements.
Inactive, suspended and abandoned wells are managed by the well owner (licensee), who is responsible for abandonment and reclamation costs. An orphan well has no identifiable owner and has been suspended for some time. In Alberta, orphan wells are managed by the Orphan Well Association.
When an oil or natural gas well is no longer productive, the operating company is required to remove equipment and reclaim the site. A well site is reclamation certified after it is remediated and reclaimed to current regulatory standards.
Orphan Well Association
In Alberta, to protect against licensees unable to cover the costs of abandonment and reclamation, the Alberta Energy Regulator (AER) collects an annual levy from all active oil and natural gas producers and remits the funds to the Orphan Well Association (OWA). The Orphan Well Levy is 100% funded by industry. The OWA, on behalf of industry, conducts testing to determine the work needed to abandon the well, then oversees the required work to safely abandon wells so the land can be reclaimed