{"id":60135,"date":"2023-07-11T11:55:22","date_gmt":"2023-07-11T18:55:22","guid":{"rendered":"https:\/\/energi.media\/?p=60135"},"modified":"2023-07-11T11:55:22","modified_gmt":"2023-07-11T18:55:22","slug":"unethical-oil-part-2-albertas-orphan-well-crisis","status":"publish","type":"post","link":"https:\/\/energi.media\/unethical-oil\/unethical-oil-part-2-albertas-orphan-well-crisis\/","title":{"rendered":"Unethical Oil Part 2: Alberta’s orphan well crisis"},"content":{"rendered":"

Unethical Oil Part 1: Alberta’s Secret Shame<\/a><\/p>\n

Alberta, industry are gambling that energy transition disruption happens closer to 2050 than 2030, with plenty of time to clean up hundreds of thousands of wells. What if they’re wrong?<\/h2>\n

Dwight Popowich wants to sell his farm and retire. Unfortunately, an orphaned gas well on his property is thwarting that plan. No buyer wants to\u00a0 risk the unknown costs of reclaiming the site, especially if soil is contaminated, and no bank will finance a sale without reclamation. Thousands of farmers and ranchers across the province face similar situations. Landowners aren\u2019t the only victims.\u00a0<\/span><\/p>\n

Taxpayers are up next. Premier Danielle Smith has already proposed that Alberta pay $6 billion of the estimated $100 billion to $130 billion bill to clean up industry\u2019s conventional oil and gas environmental liabilities. The \u201cmoral hazard\u201d – if the government pays once, it will be pressured to pay again and again – of her RStar program represents a serious financial risk for Albertans. And there will be plenty of pressure from the industry, which has seen bankruptcies soar since the price bust of 2014.<\/span><\/p>\n

Alberta producers are under intense pressure: capital is scarce and costly; international and Canadian climate policies require significant investments to reduce greenhouse gas emissions; and the rapid electrification of transportation is already cutting demand for oil. Peak oil demand is less than a decade away, according to the International Energy Agency. The energy transition is disrupting the global energy system far more intensely than we imagined even a few years ago.<\/p>\n

\"\"Alberta’s response to the energy transition’s existential threat is tepid, at best. The reason is rooted in an outdated view of how energy transitions work.<\/p>\n

Alberta politicians, business leaders, and CEOs think of energy as a commodity (coal, oil, gas) that grows linearly, small incremental steps over a long time. But energy as a technology (wind, solar, batteries, EVs, etc.) is rooted in electronics and grows exponentially, with hockey-stick adoption curves. This is the fundamental difference between the energy transitions of today and yesterday.<\/p>\n

As long-time electronics executive Mike Andrade explains (see below), linear growth thinkers believe they have decades before fossil fuels are threatened while exponential growth thinkers argue that peak demand is imminent, with decline beginning by decade-end.<\/p>\n