The case of Redwater, which went bankrupt in 2015 and abandoned 70 inactive oil wells, is before the Supreme Court of Canada. Judges will have to decide what is important in this type of case: the creditors’ rights or environmental concerns.
When Redwater Energy went bankrupt in 2015, it left 16 active oil and gas wells, 70 inactive wells and $5 million of debt to ATB Financial.
His bankruptcy syndicate then wanted to sell the active wells to pay the creditors, but the Alberta Energy Regulatory Agency (AER) had asked that the money be used to clean the orphan wells.
The case went to a judge of the Court of Queen’s Bench, who decided that the repayment of the creditor bank would be done before the clean up of the abandoned wells.
This judgment has been appealed, and arguments will be heard Thursday at the Supreme Court of Canada.
More and more orphan wells
The call has been supported by Alberta, British Columbia, Saskatchewan and the Alberta Farmers’ Advocate’s Office, who are concerned that the ruling will create a legal precedent. This would allow companies that go bankrupt to simply abandon the wells without worrying about the consequences for the environment.
Since the 2016 ruling, the Alberta Energy Regulatory Agency has estimated that the quantity of abandoned wells has increased very rapidly.
One thousand eight hundred sites that had a license from the AER were dropped, resulting in debts of more than $ 110 million, according to the agency. In parallel, the number of wells identified by the Orphan Wells Association has increased from 1,200 to more than 3,700.
Cara Tobin, a spokeswoman for the association, said in a statement that “the Redwater decision has an impact on Alberta’s constitutional right to manage its own resources,” posing a “significant and unacceptable risk to Albertans.” “.
Premier Rachel Notley said on Monday that this is a critical issue and that the province “must be able to ensure that Albertans are protected when these wells are no longer used.”
A group representing thousands of farmers in Alberta, the Action Surface Rights Association, will be heard by the Supreme Court.
For its director, Daryl Bennett, who is also a farmer in the Taber area, the issue of abandoned wells is not only a legal dispute, but a reality that residents of the region face every day.
“I do not think elected officials or judges want a system where polluters can simply leave and leave the problem to taxpayers,” he says.
Normally, the law follows the polluter-pays principle. But [the cause] Redwater reversed that.
Daryl Bennett, a farmer from the Taber area
Even though the Orphan Wells Association is responsible for cleaning wells that have been abandoned by companies, it can not meet the demand, according to Daryl Bennett. A situation that creates long delays before farmers can reuse their land.
Daryl Bennett hopes the 2016 ruling will be overturned by the Supreme Court.