Orphan Well Inventory and Revenue Loss

Res #: 4-22M
Number: 4
Year: 2022
Midterm: Yes
Expired: No
Responses Received: Yes
Departments: Saskatchewan Ministry of Energy and Resources

WHEREAS the Ministry of Energy and Resources does not directly advise any municipality or landowner when wells are deemed “orphan” wells.

WHEREAS municipalities and landowners who have “orphaned wells” with outstanding taxes owing have nowhere to go to collect or recover these taxes or other financial losses.

WHEREAS the Saskatchewan Assessment Management Agency (SAMA) is not provided with a list of the orphaned wells.

BE IT RESOLVED that SARM lobby the Provincial Government to have Saskatchewan Energy and Resources notify landowners, municipalities and the Saskatchewan Assessment Management Agency (SAMA) when wells are placed into orphan well status.

BE IT FURTHER RESOLVED that due to the provincial government’s decision to orphan the well, the use of the current contingency fund, which pays for the clean-up of orphan wells, be also used to cover a landowner’s financial losses and loss of tax revenue by a municipality.

Responses From: Saskatchewan Ministry of Energy and Resources

January 25, 2023

Regarding Resolution 4-22M – Orphan Well Inventory and Revenue Loss, I am told that when the Ministry of Energy and Resources is deeming oil and gas infrastructure as orphaned, ER notifies affected rural municipalities (RMs) directly. After the company is deemed an orphan, this information is posted in the Orphan Well and Facility lists on ER’s website. Given that these efforts may still leave a gap in information of orphaned companies, ER will undertake best efforts to notify affected RMs directly once a company is orphaned. 

With regard to the request that the orphan fund be used to cover the financial losses of landowners and RMs, it is important to note that the orphan fund was created specifically to ensure that the industry’s financial obligations with respect to abandonment and reclamation do not get passed on to tax payers. As such, the legislated purposes for which the fund may be used do not include reimbursement to landowners, RMs, or any other of the numerous creditors that may be owed money by a defunct company. 

The Honourable Jim Reiter – Minister of Energy and Resources, Saskatchewan Ministry of Energy and Resources