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An updated look at petroleum well leaks, ineffective policies and the social cost of methane in Canada’s largest oil-producing province

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Listed:
  • Daniel Schiffner

    (University of Alberta)

  • Maik Kecinski

    (University of Delaware)

  • Sandeep Mohapatra

    (University of Alberta)

Abstract

Temporarily plugged or “suspended” wells pose environmental and economic risks due to the large volume of methane gas leaked. In the Canadian Province of Alberta, which, by far, has the largest number of petroleum wells in Canada, there are no regulations stipulating the maximum length of time a well can be left suspended. In recent years, an increasing number of wells have been put into the suspended state by owners. We show using a large data set obtained from the Alberta Energy Regulator that leak spells have increased between 1971 and 2019. For the same time period, the probability of an unresolved leak has also increased, and the amount of methane emitted per leak has substantially gone up. Lastly, we provide simple social-cost-of methane computations indicating that responsible policies can incentivize well owners towards remediation and reclamation and support efforts to fight climate change and improve upon economic expedience.

Suggested Citation

  • Daniel Schiffner & Maik Kecinski & Sandeep Mohapatra, 2021. "An updated look at petroleum well leaks, ineffective policies and the social cost of methane in Canada’s largest oil-producing province," Climatic Change, Springer, vol. 164(3), pages 1-18, February.
    • Handle: RePEc:spr:climat:v:164:y:2021:i:3:d:10.1007_s10584-021-03044-w
    DOI: 10.1007/s10584-021-03044-w
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    References listed on IDEAS

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    1. Benjamin Dachis & Blake Schaffer & Vincent Thivierge, 2017. "All’s Well that Ends Well: Addressing End-of-Life Liabilities for Oil and Gas Wells," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 492, September.
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    5. Lucija Muehlenbachs, 2017. "80,000 Inactive Oil Wells: A Blessing or a Curse?," SPP Briefing Papers, The School of Public Policy, University of Calgary, vol. 10(3), February.
    6. Lucija Muehlenbachs, 2015. "A Dynamic Model Of Cleanup: Estimating Sunk Costs In Oil And Gas Production," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56, pages 155-185, February.
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