While researching for another news story, I encountered a page on the provincial government’s website called “Economic Highlights for the Week of January 25, 2021”.
The page contained various economic indicators, and I clicked on a couple of them to get more information. While looking at the data for drilled wells, I noticed a decrease in the number of oil, gas, and bitumen wells drilled over the last year or so.
So I decided to compile data from January 2000 to November 2020 and see what it can tell us.
First, here are the exploratory wells. These are wells drilled to explore the feasibility of extracting fossil fuels.
And here are development wells. These are productions wells, drilled to do the actual extracting.
Here we can see that the number of total wells drilled was not only lower over the last year, but it’s been trending down for about 15 years, for both exploratory wells and extraction (development) wells.
In fact, exploratory wells have gone from a high of nearly 600 in March 2006 to not having been above 100 in over a decade. Extraction wells went from over 1,800 in July 2005 to an average of only 350 new wells per month during the 3 years leading up to the pandemic.
And this wasn’t just an NDP problem.
The number of new wells had been dropping for roughly a decade before the NDP took power. And although they shot back up during the last half of the NDP’s term, they plateaued, passing 500 development wells only 5 times during those last 2 years and never past 50 exploratory wells.
Nothing really changed to increase those numbers during the year and a half that the UCP have been in power, despite promises for jobs, economy, and pipelines. None of the pro-oil-and-gas initiatives and policies the current government implemented has resulted in higher numbers of wells drilled than what was seen during the NDP administration.
But how do things look when we break it down by commodity type?
The province categorizes wells into 4 commodities: bitumen, gas, oil, and “other”. Here’s how drilling performed for each commodity over the last 20 years:
What we see here is a definite change in well drilling over the last 20 years. Unfortunately, natural gas in both charts kind of makes it difficult to see the changes in all the other types of wells drilled.
So let’s look at the various commodity types separately.
First, bitumen. Actually, as far as extraction wells go, there doesn’t seem to be a whole lot here. There was a downturn during the 2015–2016 recession, but it more or less recovered. Other than that and the huge drop during the pandemic, the number of extraction wells has remained fairly constant over the last 20 years.
For exploratory wells, most of the activity was concentrated in the first half of the reporting period, with only 7 wells being drilled since January 2011, and no new exploratory bitumen wells have been drilled under the UCP.
Gas, on the other hand, is another story.
The consolidated chart we saw earlier gave us a glimpse into this, but here we see it more clearly. There has been significantly less well drilling activity for gas in the last half of this reporting period than in the first half.
Alberta went from a maximum of 1,456 extraction wells drilled in July 2005, and a minimum of 12 drilled just this past June. The average in the first 10 years of this reporting period was 604 extraction gas wells drilled every month. In the last 10 years, the average was 83.
Exploratory wells don’t really tell a better story. Exploratory drilling for gas wells hit a high of 508 in March 2006. And for 5 months last year, it hit zero wells drilled.
In the first decade, there were 177 wells drilled per month, on average, yet only 12 a month in the second decade. Which isn’t that surprising, given that there have been 68 months since 2010 when the number of exploratory wells drilled was 10 or fewer. In comparison, there were 88 months before 2010 when the number of wells drilled was 100 or more.
Drilling of extraction wells for conventional oil more or less mirrors the data for the drilling for bitumen. Pretty stable for the first decade, slight rise for about 5 years, a drop for a year or so during the recession, then a rise again, and finally the pandemic drop.
However, exploratory wells for oil don’t mirror those of bitumen at all, other than that the busiest activity was frontloaded in this reporting period. Even then, that activity was much larger than bitumen saw.
Unlike gas, oil exploratory drilling saw its peak during 2006, then it slowly tapered off for about a decade during the PC and NDP administrations, before starting to rise in late 2016/early 2017.
And even with the increase in exploratory drilling activity toward the end of the last decade, it’s still at about half the levels as those seen in the first 6 years.
Interestingly, extraction wells under the “other” category performed relatively well, as far as digging is concerned, during the 2015–2016 recession. And while digging was down over the last 5 years of the reporting period, it’s still higher than it was at the beginning of the reporting period, unlike drilling for the previously mentioned categories.
Exploratory drilling for “other” wells, however, tells another story, with only 1 or 2 over the last 5 years, and most months seeing no drilling at all.