Increase in inactive oil and gas wells could cost Saskatchewan $4B in future cleanup:

[GDR]

Yes oil co. should clean up their mess no question. But when complaining royalties are too low you must also consider the other contribution the oil companies pay. They do contribute jobs, wages and corporate taxes also. In our county more than half of revenues come from oil and gas (in theory to make property taxes lower for the rest of us but more likely means the county just spends more). They get taxed on all their facilities and equipment and everytime they do a rig move they pay a flat fee to the county. Big dollars involved. And yes I realize not all areas have an oil and gas industry to tax, just pointing out its not just royalties they pay.

[Happytrails]

As I posted in an older thread, I still maintain that the bloated cost of reclaiming old "contaminated" sites is mostly unnecessary, and a bigger environmental catastrophe than the original contamination. It mostly consists of dilution of the contaminant over a larger area, or burying it in a landfill. But in the process, massive amounts of additional fossil fuels are burnt to accomplish this, which requires additional wells to be drilled ad infinitum.

I'm in 100% agreement with fellow AlbertaFarmer. In many cases the contaminated soil they are removing would just as well be left where it is. We have 60 feet of clay here and zero chance of leeching to ground water. Give the bugs a hundred years and it will be gone. Also there is no consideration of hazard assessment. The most hazardous well locations are being abandoned because they are the most expensive to make safe.

Wellsite reclamation standards attempt to erase all evidence of human activity on old well sites. That is expensive. I could be satisfied with just making them safe for people and animals. Since the railroads can leave their abandoned rail beds in any condition they want and also keep the land they were given maybe the government could spend some money reclaiming them.

[oneoff]

Some very good points for chuck to consider.

Like are the same complaints forthcoming when the royalty benefits come personally compared to someone else or provincial residents?
Similarly is everyone willing to share the extra road traffic etc.past their residence..or do they shift these nuisance effects onto others.

What is one's present stance on new seismographing. Everyone does realize that they have total control of that one aspect of oil development...or it it just "manna" from heaven that clouds the decision regarding entry.

And finally I well remember a fellow who complained his whole life about his oil being produced in times when it was worth $3 per barrell. Wanted his cake in the past and still regretted that it wasn't all still available.

However he was bang on in his assessment about " might as well get oil used up because it would one day just be not necessary". Got a lot of people now believing that.

[the big wheel]

Yes oil co. should clean up their mess no question. But when complaining royalties are too low you must also consider the other contribution the oil companies pay. They do contribute jobs, wages and corporate taxes also. In our county more than half of revenues come from oil and gas (in theory to make property taxes lower for the rest of us but more likely means the county just spends more). They get taxed on all their facilities and equipment and everytime they do a rig move they pay a flat fee to the county. Big dollars involved. And yes I realize not all areas have an oil and gas industry to tax, just pointing out its not just royalties they pay.

Good points but here is sask the increase in activity could not be handled. Roads destroyed, hospitals schools needed more it was all hip hop hooray look at these guys go!! And then one day the bill came due and now we re getting hammered with tax and infrastructure is not even maintained to where it was before because there is more infrastructure.

It all has to be planned out long term not just to get elected next term

Saskatxhewan has no long term plan other than follow oil prices and support any event that raised the price of oil. Which is good for tax revenue but what has it done to prices of goods for everyone else not in the oil industry?
Major hose job. We re paying for some other people to have higher than they should be jobs?

[chuckChuck]

When oil and salt water spill, the oil may disappear but the salt water contamination will last for a very long time and it will grow no crop. It may never grow another crop.

When leases and roads are made they use compacted clay with gravel on top. Tell me how many bushels you expect to grow with out that clay being removed and the top soil being replaced? Zero!

Even on leases that are well reclaimed you can see the effect of compaction from heavy equipment on the subsoil and top soil for lots of years afterwards.

The land and soil is worth far more than the oil underneath it because it will have to remain productive for thousands of years to produce food.

Yes some farmers enjoy some compensation if the company stays viable enough to continue paying their lease payments. But as we know some of these companies are not viable and they get sold or go into receivership leaving taxpayers and landowners with the cleanup liability which in many cases will exceed the value of all the lease payments they receive over the lifetime of a lease.

For example 30 year lease at $3500 per year equals $105,000. The Saskatchewan Auditor estimated cleanup costs on 24,000 suspended and orphaned wells at $166,000 per well totaling $4 Billion.

Who is going to pay for the cleanup?

[sumdumguy]

A lot of good points Chuck. That all should be considered before signing the lease. $3500 is peanuts for going around the site for 30 years, not to mention restoring it back to original condition in 30 years. When the rights are sold, there should be a legislated limit as to how long an oil company can leave it on your title if they haven’t done anything with the rights.

[chuckChuck]

Thanks Sum I appreciate your support. I know I clash with lots of guys on here, but I also know that many of us would agree on lots of issues as well.

In the old days when farms were smaller, oil surface lease revenues were very significant sources of family income. They are not that significant anymore on a good sized farm unless you have a lot of them. There are some big farms that don't want them at all because the hassle of farming around them with big equipment is more of a pain that it is worth.

[Happytrails]

Chuckchuck "Who is going to pay for the cleanup?" If we insist on a clean up that costs more than the original well the answer is NOBODY. To pretend that we can support 6 billion people on this earth without leaving a trace of our activities is folly. We should address the hazardous situations first and everything else as finances allow. The poor homesteaders left quite a mess behind in this country a hundred years ago. Somehow we coped.

[checking]

cc.
The world doesn't require the extra production from damaged soils caused mainly by field operators that place more importance on their tee off time than keeping packing in stuffing boxes, and flipping valves. This really doesn't need to be an expensive huge issue when you consider that on most quarters there is lots of unproductive land. It may not be nice for the moose, but where do you think the replacement material comes from to fix most so called "unavoidable accidents", or necessary lease roads that become unnecessary later.
Below the root zone, salt does no damage. Track hoes with deep reaches could easily out of sight, out of mind, pill dispose that material, and I would not object to this method on my ground. A hundred feet of blue clay before a sand seam shows up, isn't going to be affected.
Anybody can make things cost more than they should, as proves the $166 K/well theory.