A de-commissioned pumpjack is shown at a well head on an oil and gas installation near Cremona, Alta., Saturday, Oct. 29, 2016. THE CANADIAN PRESS/Jeff McIntosh

Bankrupt energy companies can’t abandon old wells, Supreme Court rules

An estimated 1,800 wells representing more than $100 million in liabilities have been abandoned since the case came to court

The Supreme Court of Canada says the trustee for a bankrupt Alberta energy company cannot simply walk away from unprofitable wells on agricultural land without having to clean up.

The high court’s 5-2 ruling overturns an Alberta Court of Appeal ruling that upheld a 2016 decision in the Alberta Court of Queen’s Bench that effectively allowed a bankrupt energy company to sever its connection with unprofitable and unreclaimed wells when the company’s assets were sold off to creditors.

The Supreme Court ruled today that the bankruptcy trustee, Grant Thornton Ltd., cannot walk away from its end-of-life obligations to render abandoned wells environmentally safe.

The ruling turned on the conflict between federal bankruptcy law and provincial jurisdiction over the environment and energy sector.

Alberta’s provincial energy regulator ordered the trustee for Redwater Energy Corporation to comply with end-of-life requirements to render the abandoned properties environmentally safe.

The company’s trustee did not comply, and filed its own counterclaim that included a challenge to the regulator’s action, citing the paramouncy of federal bankruptcy law.

Since the case came to court, an estimated 1,800 wells representing more than $100 million in liabilities have been abandoned.

Alberta’s energy regulator and the Orphan Well Association, an industry-funded group that cleans up wells that have been left unreclaimed, appealed the ruling to the high court.

A group with the support of thousands of farmers also wanted to see the high court reverse the decision.

The Action Surface Rights Association intervened in the case because it believes rights of landowners have been overlooked in the case.

Like us on Facebook and follow us on Twitter.

Just Posted

Kenney talks pipelines with Trudeau after election win, calls it cordial

Almost a year ago Kenney dismissed Trudeau as a dilettante and a lightweight

Sylvan Lake Youth Services receives grant for mental health programming

The Alberta Health Services grant will be put towards running the Community Helpers Project

Sylvan Lake’s Leaders of Tomorrow awards get a new look

The Youth Sparks Awards will feature six award categories on May 31

Novice Sylvan Lake Buccaneers sail to home opener win

The novice Buccaneers played in a triple-header with the bantam and midget Buccaneers on April 12

Former Sylvan Lake resident receives humanitarian award

Humanitarian efforts see Sylvan Lake native recognized for long-term contributions

‘No answers:’ Canadians react to Sri Lanka bombings that killed hundreds

The co-ordinated bomb attacks killed at least 207 people and injured 450 more on Easter Sunday

Person airlifted to hospital after avalanche in Yoho National Park has died

The man was among a party of three involved in an avalanche Saturday afternoon

QUIZ: How much do you know about Easter?

Take this short quiz and put your knowledge to the test

Global Affairs warns Canadians in Sri Lanka there could be more attacks

A series of bomb blasts killed at least 207 people and injured hundreds more

Parents say Austrian climber missing in Banff National Park ‘lived his dream’

David Lama, Hansjorg Auer and American climber Jess Roskelley have been missing since Wednesday

Six months after legalization, high prices and supply issues boost illicit pot market

It has been six months since Canada became the first industrialized country to legalize recreational cannabis

Kirkland Signature veggie burgers recalled due to possible metal fragments

Recalled products came in 1.7 kg packages with a best before date of Apr. 23, 2019

Flooding, climate change force Quebecers to rethink relationship with water

Compensation for victims of recurring floods limit to 50% of a home’s value, or a maximum of $100,000

Storms blast South, where tornadoes threaten several states

9.7 million people in the Carolinas and Virginia at a moderate risk of severe weather

Most Read