Oil and gas infrastructure in a rural area of Alberta.
Explainer

Alberta Energy Regulator pegs oil and gas clean-up bill at $38 billion

The regulator’s latest report says outstanding oil and gas liabilities continue to climb, despite over $1 billion in clean-up spending last year

By Drew Anderson

Drew Anderson has reported on climate and the environment, with a particular focus on oil and gas and electricity in Alberta, for The Narwhal since 2021. He is based in Calgary.

Nov. 10, 2026 4 min. read

The estimated cost to clean up conventional oil and gas sites in Alberta has increased by $1 billion and persistent long-term issues remain, according to the latest official figures. But there are some positive signs when it comes to the number of old wells sitting idle across the province.

In total, according to the latest report from the Alberta Energy Regulator, an estimated $38 billion would be needed to properly seal and reclaim the province’s oil and gas infrastructure outside of the oilsands, up from $37 billion the year before. Critics such as lawyer and researcher Drew Yewchuk say that figure is likely lower than the actual cost, and the regulator itself stresses precise figures are hard to pin down.

Summary

  • The Alberta Energy Regulator published its annual liability report on Nov. 9, showing an estimated $38-billion price tag to clean up conventional oil and gas sites in the province.
  • The percentage of wells that are inactive — not producing, but also not yet properly sealed — has decreased, but 77,932 wells are still sitting idle.
  • Estimates of the cost to clean up the oilsands have ranged from $58 billion to $130 billion.

The cost of cleaning up the oilsands is estimated at an additional $58 billion by the regulator. Internal documents from 2018, however, showed those estimates could be as high as $130 billion. 

According to the regulator, spending on cleanup exceeded $1 billion in 2025, including spending from companies and from the industry-funded Orphan Well Association, which deals with sites with no solvent owner. 

The annual report, dense with figures, shows a bit of push and pull in terms of progress. It can be difficult to digest, so let’s break down the good, the bad and the grey in this year’s findings.

Most companies are paying, but not all

Alberta requires oil and gas companies to pay an amount set by the regulator to decommission, remediate and reclaim their energy infrastructure when it’s no longer active, known as mandatory closure spending.

The regulator says 389 active companies have met those mandatory spending targets, or have paid deposits in lieu. While that is 80 per cent of all active companies, it also means there are 96 active companies that are delinquent, 17 of which have failed to meet their obligations for three years in a row.

Three pumpjacks in a rural Alberta field.
Oil and gas companies in Alberta are required to make regular payments toward the eventual cleanup of their facilities. The energy regulator’s latest report says about 80 per cent of active companies are in compliance. Photo: Todd Korol / The Narwhal

Oil and gas companies are also required to pay an annual amount to the Orphan Well Association. The regulator sets a total amount to fund the association, then divvies it up between companies. 

The latest report doesn’t include a breakdown of which companies have failed to pay that levy. But comparing data from a separate report shows there are 35 active companies that have failed to both meet their clean-up obligations and to pay the orphan levy.

Number of inactive wells is down, but some older ones are lingering

Despite that delinquency, there is some good news in the report. 

The percentage of wells that are inactive — not producing, but also not yet properly sealed — has decreased to 16 per cent. But that still means 77,932 wells were sitting idle on the landscape in 2025. On Nov. 9, the inactive well list maintained by the regulator showed 77,092 wells. 

And even with the decline, the number of old wells that continue to sit inactive is increasing as a share of the total. Older wells can sometimes be more difficult and costly to clean, and can come with associated pollution from years of neglect.

Almost half of all inactive wells are more than 10 years old, some of which have been sitting for more than 20 years.

Most Alberta oil and gas companies are in decent financial shape — but certainly not all 

According to the regulator, the vast majority of the $38 billion in estimated liability — 82 per cent — is held by licencees in “low financial distress.” Financial distress is calculated using multiple criteria, including debt levels and payments relative to operations, net profits over three years and the ratio of assets to liabilities.

Currently, more than $1.7 billion of liabilities are in the hands of companies with high financial distress, which does not take into account licences still held by insolvent companies, while a further $5 billion is with those in medium financial distress. 

Those figures, however, can shift through transfers of licences for oil and gas infrastructure from one company to another.

Recent reporting by The Narwhal looking at the transfer of assets to MAGA Energy has revealed apparent gaps in the regulator’s licence-transfer process, and how assets can end up in the hands of companies unable to fulfill their regulatory obligations.