Supreme Court to decide on handling of abandoned oil wells

Supreme Court to decide on handling of abandoned oil wells

The Supreme Court of Canada will hear an appeal over a ruling that could allow energy companies to walk away from cleaning up abandoned oil wells

The Supreme Court of Canada says it will hear an appeal from Alberta’s energy regulator over a ruling that could allow energy companies to walk away from cleaning up abandoned oil wells and affect industrial sites across the country.

In May 2016, an Alberta Queen’s Bench judge ruled in favour of the bankruptcy trustee of Redwater Energy Corp., saying proceeds from the sale of assets from bankrupt energy companies should go first to creditors, not to cleaning up the mess from the company’s operations.

Redwater’s trustee and its lender wanted to sell off the company’s remaining producing wells to pay creditors, arguing a bankruptcy trustee is free to pick and choose from among the company’s assets and disclaim unproductive oil and gas wells.

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Disclaimed wells would be abandoned and left to the Orphan Well Association, an industry-funded and government-backed group, to clean up.

In a split decision last April, Alberta’s Appeal Court backed the original judge, saying federal bankruptcy law takes precedence over provincial environmental rules.

As usual, the Supreme Court gave no reasons for agreeing to hear the appeal.

The Canadian Press

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