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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Licensed cannabis store opens in Nanaimo’s north end

Mood Cannabis Company’s Metral Drive location opened Jan. 18

Two women struck by vehicle at Nanaimo intersection

One woman taken to hospital with possible broken bones

Nanaimo school district to explore trustee wage increases, benefits

SD68 staff compile report comparing trustee remuneration with five similar school districts

Cars crash on old Island Highway at Mary Ellen Drive

No injuries reported in accident, which happened at about noon

New B.C. Cannabis Store opens up shop in Parksville

Outlet at Wembley Mall open seven days per week

VIDEO: Mass coronavirus quarantines seen in China won’t happen in Canada, authorities say

‘If a case comes here, and it is probably … it will still be business as normal’

Province’s oldest practising lawyer shares advice at her 100th birthday party

Firefighters bring Constance Isherwood a cake with 100 birthday candles

Vernon woman suing McDonald’s for spilled coffee

Woman seeking nearly $10K, says employee failed to put lid on properly

Diners’ health tax not catching on in B.C., restaurant group says

Small businesses look for options to cover employer health tax

Beefs & Bouquets, Jan. 23

To submit a beef or a bouquet to the Nanaimo News Bulletin, e-mail editor@nanaimobulletin.com

Former Mountie, sports coach convicted of sex abuse in B.C. granted day parole

Alan Davidson was sentenced to almost six years for abusing seven boys in the late 1970s and early 1990s

Maintenance work sees Sunday morning ferry sailing from Nanaimo cancelled

B.C. Ferries says Queen of Cowichan’s scheduled 6:15 a.m. sailing cancelled

B.C. comic wins judgment after club owner slaps cellphone out of his hands

Incident happened last summer when Garrett Clark was performing in Abbotsford

Most Read