May 31st, 2020

Can solar solve abandoned well issues?

By COLLIN GALLANT on February 15, 2020.

NEWS FILE PHOTO

cgallant@medicinehatnews.com@CollinGallant

A southern Alberta group that says mid-sized solar arrays on abandoned well-sites could provide an easier out for struggling gas companies, allay rural landowner concerns, and preserve lease payments is close to finalizing a pilot project.

RenuWell has worked for several years developing a model to assume reclaimed well sites for power production.

It held a final stakeholder feedback session Wednesday in Taber with the group’s head announcing that a potential pilot project and new partnerships could be coming before spring.

“We want to reuse some of that infrastructure to deploy solar energy instead of these large-scale utility fields,” said Keith Hirsche, a former petroleum engineer who has spent four years discussing the idea with landowners, regulators, and energy companies.

Oil companies are responsible for abandon wells and well sites but the large number of mature wells is an increasing source of concern across the province. Spending money to shut down sites in a poor economy is a hurdle for petroleum producers. Landowners as well may want proper environmental work done, but also depend on income from access and lease agreements.

When it’s done, what’s left is essentially a flat two-acre pad that Hirsche said is ready made for a solar array large enough to produce revenue to cover the lease agreement, local taxes and produce a return.

“We’d shorten the reclamation cycle, monitoring vegetation once the well is reclaimed instead of the oil company, and we’d use the roads and electrical infrastructure,” said Hirsche, adding that depending on the deal cut with landowners, power could go to pivots, or feed on to the local power grid.

“This could be very popular in irrigation country,” he said.

A grant decision from the provincial government’s Alberta Municipal Community Generation Challenge is due this spring that could fund a pilot project.

RenuWell is in advanced conversations with the Municipal District of Taber, an unnamed large utility company, job-training providers and rural landowner advocates.

Darryl Bennett is the head of the Action Surface Rights, a group that advocates for ag producers’ rights in disputes over well cleanup.

His group has passed motions to support the project, and this week’s RenuWell meetings were held in conjunction with the Action Surface Rights AGM in Taber.

“From the landowner’s perspective, we can’t really see any negatives,” said Bennett, who said his members are concerned about proper well cleanup, but also the potential loss of income from access agreements that end when wells are closed.

“There are so many of these wells, that even if we did five or 10 per cent that would be enough and we can cherry pick the best sites,” said Bennett.

There are about 90,000 inactive wells currently in the province. Cypress County alone has 20,000 shallow natural gas wells that are increasingly considered not economic to operate in a long-term low-price environment.

If a landowner and well operator agree, RenuWell would take over the sites once the reclamation process is far advanced, installing arrays to earn an income.

They would assume lease payments from that point on, thereby reducing the well-owner’s costs of continuing payments for up to five years while ground monitoring takes place.

As well, the new facility is taxable, and could help avoid a major tax-base shift for rural municipalities that depend heavily on taxing oil and gas infrastructure.

The size of the array is much smaller than the hundreds of acres needed for a utility-scale project that feeds provincial transmission systems. That size is now allowed after the province relaxed small-scale power production regulations two years ago.

Discussions are also underway with the Alberta Orphan Well Association, which handles wells of bankrupt oilpatch companies.

Initially, the group would prefer sites with low agricultural value, such as dry corners of crop land, hayland or pasture. Not only are lease rates lower, but less intrusive.

Many landowners might consider panels appropriate on a barn, shop or irrigation pivot, but less so on a tract of productive land, said Hirsche.

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