TABER, Alta. — Abandoned oil and gas well sites, which once produced one kind of energy, could feasibly be converted into producing a different kind of energy: solar.
Keith Hirsche, the force behind a company called Renuwell, has been investigating the possibilities via a pilot project within the Municipal District of Taber. He provided an update on findings Feb. 12 and said a final report will be ready at the end of March.
The problem of abandoned well sites has expanded across the province as low oil and gas prices forced many smaller companies out of business. Those leased sites have access roads and electricity already in place, so Hirsche reasoned that establishing small solar installations would provide renewable energy as well as lease payments to farmers and ranchers on whose land they sit.
In many cases private landowners are no longer receiving lease payments for the sites because of energy company bankruptcies and a backlog of files at the Surface Rights Board, which handles landowner appeals for compensation. Municipalities across the province are also owed an estimated $173 million in property taxes from oil and gas companies.
Solar installations could also reduce electricity, distribution and transmission costs for irrigated agriculture.
Hirsche, who has an extensive background in the oil and gas industry, has family ties in the Taber area and found the MD of Taber amenable to exploring his idea. The municipality obtained a grant for the pilot project.
Hirsche’s assessment of the inactive well sites in the MD identified 954 leases near roads and three-phase power lines that were not near water or in the middle of irrigated fields. Putting small solar arrays on all or some of those sites would provide lease payments to farmers and ranchers and also save the oil industry millions per year by removing their requirement to make lease payments during a reclamation transition period, Hirsche said.
If only 25 percent of the suitable sites in the MD were converted to solar, he estimated $25 million in savings to the oil and gas industry. The 467 megawatts of electricity those sites could produce, which is enough to power more than 100,000 homes, would provide about $52 million in electricity sales.
Province-wide, if solar projects were installed on only 10 percent of inactive leases, Hirsche estimated they could produce more than eight million megawatt hours of electricity annually and an estimated $650 million in revenue.
By using existing sites, there would be no need to use viable agricultural land or native grassland for large-scale solar projects, he added.
As an example, a recently announced solar project near Vulcan, Alta., Canada’s largest, required the purchase of 4,700 acres, about 2,000 of which will be covered with solar panels. It is expected to produce 400 megawatts.
MD of Taber Reeve Merrill Harris said the municipality is encouraged by Hirsche’s findings.
“It’s one way of converting old oil abandoned facilities into something useful again. It helps with the clean up of those wells. It doesn’t really relieve the oil companies of their responsibility, but it puts the land to a different use for a time period and maybe at the end of that 20 or 30 year period, they’ll figure out a better way of cleaning up the well site that’s been abandoned,” he said.
“For (oil and gas well sites) that have been abandoned, landowners that aren’t getting compensated, hopefully with this new project they’ll be getting some surface rental back, and on the municipal side, some taxation, I guess.”
Revenue from oil and gas production makes up almost 11 percent of Alberta’s provincial budget, and the province is still about 80 percent dependent on fossil fuels for electricity.
As part of the pilot project, Hirsche said he discussed the possibilities with landowners, oil and gas organizations, the renewable energy sector, the Orphan Well Association and the Alberta Utilities Commission. He said he found major interest and few naysayers.
Regulations related to conversion of leases and grid connection were among the hurdles, and there were many queries about the business case, he said.
“Overall from our stakeholder consultation, I can say we’ve had very strong support from all the landowners, the landowner groups that we’ve met with. I think we can become a leader in this whole field if we do this right.”