Proposal sees abandoned oil wells going solar

The plan started as a small pilot project in Alberta but has caught the attention of the provincial energy regulator

A plan is taking shape to erect small solar installations on the sites of Alberta’s abandoned oil and gas wells.

If successful, it could prove to be a classic case of making a silk purse from a sow’s ear, since myriad oil and gas company bankruptcies have resulted in the abandonment of thousands of wells, inundating the Orphan Well Association that has a mandate to seal the wells and reclaim the sites. Losses in the energy industry have also reduced municipal tax revenue and reduced or eliminated lease payments to landowners.

RenuWell, a project spearheaded by former Taber, Alta., area resident Keith Hirsche, is the entity behind a pilot project within the Municipal District of Taber. Hirsche, who has a background in oil and gas industry research, initially planned to start small but the idea has gained the attention of regulators and interest is building.

“We went to the M.D. of Taber with the idea of getting a development approval for (one) site and what it’s turned into is this policy piece funded by the MCCAC (Municipal Climate Change Action Centre) to kind of set the framework for doing this on a larger scale,” said Hirsche.

Now the Alberta Energy Regulator (AER) is interested in seeing solar installations at 100 to 200 sites per year, he said.

“I think once we get the first ones on the ground, a lot of that kind of prep work for the policy side has already been done and would facilitate that kind of expansion.”

RenuWell has held a number of meetings with landowners about the idea, and has found willing listeners among farmers and ranchers who have oil and gas sites on their land but who no longer receive lease payments from troubled or bankrupt energy companies.

Existing lease sites already have road and electrical access so that investment has already been made. The technical side of putting up small ground-mount solar arrays of 500 to 700 kilowatts is fairly simple, Hirsche said.

“We can basically go in and do a number of these small sites in a very repeatable fashion and we can reach similar costs to what the large scale utility projects can achieve. At least that’s what the business model says.”

Daryl Bennett, a farmer and member of the Action Surface Rights group, is involved in the project and has helped RenuWell in its contacts with landowners.

He lists some of its advantages as:

  • reducing Orphan Well Association inventory
  • reducing industry reclamation costs
  • reducing Surface Rights Board payments on behalf of the province
  • helping stabilize municipal tax revenues
  • reducing landowner electrical costs
  • stabilizing electrical grid
  • reducing need for large transmission lines

“A lot of these farmers want to keep getting the revenue (from lease payments.) We can just come in and put in these small solar panels. It stabilizes the grid. It doesn’t take new farmland out of production. It doesn’t require new transmission lines going across other people’s land. And it does pay some taxes to the county. So it’s a good news story for everybody,” said Bennett.

“It looks like it could easily go ahead and we’re talking hundreds of sites, maybe thousands.”

RenuWell is exploring various ownership options for the sites. Landowners may want to purchase and use the systems for their own power and irrigation needs. Co-operatives among farmers could be formed for larger agricultural electrical needs. Municipal or corporate ownership are two other options.

As well, “there’s a big solar developer that is interested in using us as kind of a new development model, rather than taking land that’s useful for agriculture for that purpose,” Hirsche said.

In a report written for the M.D. of Taber newsletter, RenuWell said its project addresses landowner concerns about large solar installations.

“A common concern was raised about maintaining the agricultural land base in the face of large utility-scale solar projects. This concern has been largely relieved due to our preference to re-use existing leases, which are located in lower productivity areas like pivot corners or tame grassland,” the report stated.

A major hurdle in the early stages was how to manage lease transfer, Hirsche said.

“The AER was really concerned that this would turn into another way of oil companies dumping liabilities, so it was a lot of work to kind of put the safety mechanism around that to reduce that risk.”

Getting a policy in place has smoothed the way for the pilot project and potentially larger solar conversions of sites. Hirsche said construction on the first site is expected to begin in early 2020, with electrical generation starting about three months later.

Ron Huvenaars, a farmer and chair of Action Surface Rights, said the RenuWell proposal is interesting.

“There’s a lot of potential there,” he said. “It seems like it should be a win–win but the first one has to get done. It’s always a little scary when you’re using numbers provided by somebody. … It’s like a lot of things. You’ve got to get the first one done and see how it goes.”

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