In the early evening of Aug. 26, 2021, an explosion rocked the small town of Wheatley, Ont. Hydrogen sulfide gas had ignited after leaking from a gas well long-buried under a building in the town’s core.
The event saw more than 60 households and 30-odd businesses in the area evacuated. Twenty people were injured. Unfortunately, it was only a symptom of a larger problem.
Ontario is home to tens of thousands of old oil and gas wells. Many were dug before regulations existed for properly plugging and abandoning inactive wells. They can leak gases into the atmosphere including highly flammable and poisonous hydrogen sulfide and planet-warming methane, posing risks to human health and safety and contributing to greenhouse gas pollution.
At least 50,000 oil and gas wells have been drilled in Ontario — with a heavy concentration in the southwest of the province. Map: Ontario Ministry of Natural Resources
Properly remediating these wells is an expensive process, and the Ontario government doesn’t have enough funds to cover the cost.
Moreover, new wells continue to be drilled, and the security deposit required by the Ontario government isn’t near enough to cover the cost of remediation, should it fall to the province. It’s so disproportionate to the cost that one industry consultant suggested the deposit should either be increased or abandoned altogether — to “communicate to the public the reality of the situation.” That advice came to light in a series of documents accessed by The Narwhal through freedom of information legislation.
Here’s what you need to know about Ontario’s old oil and gas well problem, and where new wells and carbon storage fit into the complicated puzzle.
There are tens of thousands of old wells in Ontario and many are still unaccounted for in public records
Southern Ontario was the early epicentre of what became Canada’s national petroleum industry, with commercial drilling for oil and natural gas beginning in the late 1800s.
A geospatial Ontario map shows the sites of oil and gas wells across the southwestern part of the province — from quiet rural areas to the bottom of Lake Erie and even in busy urban centres like downtown Toronto.
According to a report by the journal Geoscience Canada, 10,000 wells are estimated to have been operating in Ontario by the early 1900s — but records only exist for 1,500. By 1970, 50,000 wells had been drilled, but the province only has records for 27,000.
Given these statistics, the Geoscience report authors concluded “there may be tens of thousands of unrecorded or lost wells in southwestern Ontario.”
Capping wells is expensive, and Ontario doesn’t have the funds to do so
Some of Ontario’s old wells were properly plugged once they became inactive, but others were dug before proper plugging standards existed. The inadequate materials used to fill and cap them degrade over time and can allow fluids to surface and leak. The cost to fix this problem is significant.
Landowners and municipalities shoulder the financial responsibility of properly capping orphan wells, which are inactive wells that have no known operator. It’s an enormous bill. The Ministry of Natural Resources maintains an abandoned works program to financially support well-capping, and the program has spent $29.5 million to date to cap 415 wells — at an average cost of $71,084 per well.
In June 2023, an additional $7.5 million was allocated to support municipalities over three years in risk and emergency preparedness related to old wells. The funds are part of a wider $23.6-million provincial strategy to identify and plug old oil and gas wells.
But at an average cost of $71,000 to plug one well, it would cost more than $700 million to plug 10,000 sites, and that’s just a portion of the known wells in the province.
Robert Sharon, director of infrastructure services for the municipality of Leamington, near Wheatley, told The Narwhal, “The funding the [Ministry of Natural Resources] receives to do this work is nowhere near adequate given the magnitude of the problem.”
Operators of active oil and gas wells in Ontario are required by the province to put down security for well remediation, should they declare bankruptcy or walk away for other reasons. But the well security is far less than the actual cost of properly capping a well. Photo: Matt McIntosh
Oil and gas companies’ security deposits do not cover the actual cost of remediation
For new wells being drilled, oil and gas companies pay a security deposit that can be used should remediation fall to the province — because the company has gone into insolvency, or walked away for other reasons. But documents obtained through freedom of information legislation suggest current securities are nowhere near enough to cover capping costs or additional hazards. The government currently requires between $3,000 and $10,000 in security for wells drilled on land, depending on the depth, and $15,000 for underwater wells.
In an October 2023 email to a provincial oil and gas working group, one industry advisor noted, “The public is led to believe the security will look after the wells and site remediation. This is simply not the case. If an operator declares bankruptcy, there is generally not enough security to properly deal with abandonment.”
Days later, the working group discussed a since-passed regulation that has removed exemptions and a cap on cumulative securities for operators with multiple oil and gas wells. Meeting minutes show Ministry of Natural Resources staff expressed the rationale was to “prevent further issues to what we currently have with orphaned wells in the province, [and] to ensure operators have sufficient funds to plug wells.”
An industry advisor suggested the province drop gas well securities entirely, given the actual cost
In communications with the oil and gas working group, the industry advisor suggested that, given the high cost of properly remediating wells, the province should either raise the amount required for security deposits or scrap securities altogether.
They said the latter option would “save administrative costs for the industry and for the regulator and also communicate to the public the reality of the situation.”
“I think that most operators are responsible. Compliance with the regulatory requirements should be adequate to ensure operations are conducted safely and in an environmentally responsible manner. As the security amounts that exist are totally inadequate, these security requirements should be eliminated as they create extra red tape for minimal gains.”
As of Aug. 28, 2025, financial securities had not been raised or eliminated.
Proposed underground carbon storage could increase the risk of gas leaks
The same regulation that removed exemptions and caps on securities for new wells also allowed for testing around carbon storage, which is new to Ontario. The process for carbon storage sees carbon emissions, like those produced when fossil fuels are burned, captured and compressed into liquid form so they can be injected into caverns in the ground, rather than released into the atmosphere. Those caverns often come in the form of depleted oil and gas wells and saline aquifers.
As the government heads back into session in October, second reading will continue on Bill 27, the Resource Management and Safety Act, which would actually allow carbon storage to go forward in Ontario at a commercial scale — meaning greenhouse gas producers can inject and store carbon underground, following guidelines developed by the province.
Critics, including opposition MPs in Ontario, have noted the risk of leaks where carbon is injected, particularly in areas with an abundance of old — and unknown — wells that create pathways to the surface.
— Compiled by Paloma Pacheco
