Legal conflict over deserted oil wells firm for Supreme Court
Canada’s tip justice has concluded to examination a statute that could concede appetite companies that have left broke to travel divided from cleaning adult deserted oil wells.
The Alberta Energy Regulator, and a Orphan Well Association rigourously practical to a tip justice in Jul for leave to interest what’s famous as the Redwater decision.
The Supreme Court pronounced Thursday it has postulated a focus for leave to appeal.
Regulators are endangered that if a Redwater ruling stands, meaningless oil and gas wells will be deserted opposite a range as struggling oil operators fold.
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“For a past dual years, we have worked really tough during all levels of justice to safeguard a consequences of a Redwater decisions are entirely understood,” AER boss and CEO Jim Ellis pronounced in a statement.
“The preference allows creditors to advantage during a responsibility of a sourroundings and obliged companies by needing receivers to equivocate regulatory mandate that were put in place to strengthen a open and environment,” Ellis said.
“It allows owners of industrial comforts to travel divided from their environmental responsibilities.”
The conflict began when Calgary-based Redwater Energy Corp. went broke final year, triggering a quarrel between the AER and a provincially-owned ATB over a remains.
Does a lender get paid behind first? Or should deduction from any item sales go to purify adult a mess — namely those 70 non-operational wells that would differently be deserted —  the association leaves behind?
In May 2016, an Alberta Queen’s Bench decider ruled in foster of a failure keeper of Redwater. The justice ruled a sale of resources from broke appetite companies should go initial to creditors, not to cleaning adult a disaster from a company’s operations.
The Redwater Energy Corp. keeper and a lender, ATB Financial, wanted to sell off a company’s remaining producing wells to compensate creditors. They argued a failure keeper is giveaway to collect and select from among a company’s resources and “disclaim” — legally abandon — sterile oil and gas wells.
Those wells would be left to a Orphan Well Association, an industry-funded and government-backed group, to purify up.
But in a 2-1 preference expelled in April, a Alberta Court of Appeal corroborated a strange judge, observant sovereign failure law takes dominance over provincial environmental rules.
‘That impact can't be undone’
While Redwater was a comparatively tiny actor in Alberta’s appetite industry, a court battle has inclusive implications.
British Columbia and Saskatchewan both participated in a appeal in support of a AER since a box could act as a fashion in other provinces.
Since a Redwater preference came down, about 1,600 AER-licensed sites have been disclaimed by receivers, with estimated liabilities of some-more than $100 million.
“That impact can't be undone,” pronounced Ellis. “But we are looking brazen to presenting a arguments and are confident we might remonstrate a Supreme Court to retreat a reduce courts’ decisions.”
Article source: http://www.cbc.ca/news/canada/edmonton/abandoned-oil-wells-redwater-decision-supreme-court-appeal-1.4394768?cmp=rss