REPORT: 80,000 INACTIVE OIL WELLS: A BLESSING OR A CURSE?

[Oscar]

80,000 INACTIVE OIL WELLS: A BLESSING OR A CURSE?

[ http://www.policyschool.ca/wp-content/u ... achs-1.pdf ]

Lucija Muehlenbachs http://www.policyschool.ca Volume 10 • Issue 3 • February 2017

EXCERPT:

Alberta’s permissive policies have led to a situation where there are now more than 80,000 inactive wells in the province. Some have been inactive for decades. If the possibility existed that they could eventually become economical, those wells might be considered a blessing. However, the simulations that model scenarios where prices are substantially higher or where production technology is significantly improved, clearly show that the vast majority of these wells will never be reactivated, no matter how dramatically conditions improve. . . .

- - -

About the Author
Lucija Muehlenbachs is an assistant professor of economics at the University of Calgary and a visiting fellow at Resources for the Future. Her research focuses on issues in the oil and gas industry. On shale gas she has looked at impacts on property values, surface water quality, fatalities associated with truck traffic and the chemical composition of shale gas waste. Other work includes analyzing inspections of offshore oil and gas facilities in the Gulf of Mexico, the impact of EPA press releases and the impact of low natural gas prices on coal-fired electricity. She graduated from the Agricultural and Resource Economics department at the University of Maryland.