Alberta’s oil and natural gas firms are set to make a C$2.3 billion ($1.8 billion) start to seal a backlog of 95,524 inactive wells over the next five years under rules enacted Wednesday by the province’s production watchdog agency.

The requirements translate the more stringent environmental legislation into “tools we need to begin to move the needle on liability,” said Alberta Energy Regulator (AER) President Laurie Pushor.

“With these new requirements, we’re pushing industry to clean up their sites sooner and ensuring the cost and responsibility of the cleanup rests on the shoulders of industry — where it should be.”

The Licensee Life-Cycle Management rules enable the AER to identify idle wells that have no prospects of resuming production. They also set...