January 2024
The Orphan Fund was established in the 1990s, and since 2002, the Orphan Well Association (OWA) manages the closure of orphaned oil and gas wells, pipelines, and facilities, including the reclamation of associated sites, across Alberta. Every year, the AER issues an orphan fund levy to licensees to ensure that the OWA has an operating budget.
The levy is used in part to pay for project closure costs when an energy company cannot meet its obligations to close its energy project safely and responsibly. Visit the following link for additional information.
Figure 10. Orphan fund levy by year, 2009–2023
The OWA spent $185 million on closure in 2022 and decommissioned 1412 licences and reclaimed 361 licences. To maintain the pace of closure activity, the 2023 orphan fund levy was increased to $135 million from $72 million in 2022.
Figure 11. Annual OWA closure spend & closure activity
As of December 5, 2023, the AER has collected 99% of the total amount invoiced for the 2023 orphan fund levy.
Table 3. Licensee compliance with 2023 orphan fund levy