Depression style make work project in the oil patch

[TOM4CWB]

"Secondly, haul what where? Level it, it will all become a medium to grow something on."

How is it fair to require me to try to grow a crop on a clay/field rock/gravel road with boulders croping up for the next century.

Compensation needs to be paid till the reclamation is done. The Gov/oil folks pulled out multi-millions... my farm got none of it. CPRail got the mineral rights... you can guess how that goes.

[ajl]

Money's gone Tom and it ain't comin back. Depression is here for most of us and it ain't goin away. There will always be a lucky few that escape. Better hope your one of them.

[TOM4CWB]

ajl,

The Gov/oil/CPRail are still pulling out oil and gas... horizontal and fracked gets the hydrocarbons out 50x easier than the old pin point method. And that is fine... someone needs to do the right thing and fix up the problem... while the money is still flowing out of the ground!

[blueversi]

Worked in oilfield reclamation for 10 years, the costs to reclaim are not astronomical for a straight forward reclaim, a lot of varieables though, amount of dirt needed to be moved, rocks to pick, shortage of topsoil etc. merely a drop in the bucket when compared to what goes into the drilling side and pipeline side of things. Add in contamination though and costs go up substantially to either dilute or mix off contaminants or haul to an environmental landfill. There is an orphan well fund setup to cleanup wellsites that were in the hands of now bankrupt companies, from my understanding current oil companies pay a percentage into this fund as well as gov't and it is doled out to clean up these "orphaned" sites.

[oneoff]

First I suggest that everyone get a few of their facts straight before actually misleading others and themselves as to what an "Orphan well fund " in Sask consists of.

Start with the Ministry of Econonmy website (aka old Energy and Mines).. try http://publications.gov.sk.ca/documents/310/84501-llr_summary.pdf to see how little is in the kitty.
Therein you will see that the two producers with supposedly half of Saskatchewan's oil production has exactly zero dollars on deposit for their potential future "orphan well" portfolio.

And look at the rest of the recognizable oil company names and you'll see similar zero dollar entries for almost every one of their oil wells and facilities (which is a separate kettle of fish). The sum total in the fund is not given; but its obviously peanuts. Someone else add it up And I maintain that given continuing depressed oil prices; there will be absolutely no oil industry left in Sask; because of the amounts mandated as due to the government coffers as deposits when net oil revenues over a 3 year period exceed the "base liability" of 55,500 abandonment costs per well.

A fact that has been obvious to anyone who looked at the situation at least 8 months ago.

Now that should be the beginning of the research needed to even express an opinion about the failed nature of all past governments who never recognized (or admitted) that suspending wells was the cheapest way to ignore isolation and cleanup of subsurface iron and spills that would almost never find future productive uses.

And I wager that not one person is going to be able to explain what an LLR is; what the implications of a moving 3 year average of "net income" divided by deemed remdiation of a SE Sask vertical well of some $55,500. With the end result that if that ratio is less than 1.0 then only then is a full remittance of that $55,500 immediately due through a deposit to the fund.

Now today I suffered through radio program and a plea from that service rig company president for a welfare program to fund his (and similar) businesses through slow times (and maybe even an oil company with a similar name that apparently doesn't have one cent on deposit with the orphan well fund.) Of course he maintained that there was no net cost to anyone when you considered that the spin offs and taxes collected would exceed the taxpayer contribution

So there is the formula to making money in government. Why not invest a few trillions in all kinds od projects and all financial problems go away.

What utter nonsense.

Twice it was mentioned greenhouse gas emissions would be solved from these 100 some odd orphan wells ...... (has even one of them now having any such problem?)

And then it sort of slipped out that the vast majority of the wells could indeed belong to companies that are not yet bankrupt.

Orphan wells with no owners are one thing. That issue lies on the doorstep of elected officials who were not smart enough to protect the public purse from those who shirked their total eventual inevitable clean ups and remediation. That doesn't mean that oil company financial interests were not looked after in much of past history.

Those hundreds of wells that are still "assets"" of yet viable companies are another matter. To give that gift of a minimum "$55,500" per suspended well is obscene and not fair to any in the industry who are required to still look after their liabilities as well as be entitled toenjoy any fruits of their business.

Perhaps our elected representative are not only incompetent; but poorly grounded and quite incapable to running a business in any manner except borrowing in the good times without recognizing that things get the toughest during downturns when saddled with debt.

All marks of poor business acumen.

[blueversi]

Good to know Oneoff, all my experience is in Alberta so don't know about Sask. I never ever figured there would be a ton of money in any kitty just going by what I have been told. Have worked on a few orphan well reclaims and once the money budgeted for the year is gone, it's gone and the work stops regardless of whether it is complete or not and have to wait until the next years budget to continue.

[oneoff]

I see that I didn't make it clear that it is not individual wells that enter the government LLR calculation.. Whilst true for any single "one" well oil company; larger companies get to cover the dog and suspended wells with their higher money making producers.

What becomes evident is that it has been cheaper to just drain the tanks; suspend the well and pay the lease compensation.

Thats what has caused the current government dilemma...and the recent brain wave is a knee jerk reaction that shows very little long term deep thought. We'll see which companies get the free gifts.

Sure did take divert attention away from Bill Boyd et al. and tap into begging for federal tax money that will have to be paid back (with interest)sometime in the future.

And global recessions just may make those future payments both painful and difficult

[oneoff]

Could it be that the deposits made to the orphan well fund; and meant to be reserved for down payments to be applied to costs of abandonment of that companies specific wells...will morph into a tax designated for industry wide coverage of actual wells that have no owners.

Thus this brainchild of make work and provide employment in these tough times may be just the first step to transforming "deposits" into non refundable taxes.

At the present time those deposits can be returned when the deemed liability risk is reduced through a couple of various ways.