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Thursday, 01 March 2018 11:29

Redwater Battle continued in front of the Supreme Court

Written by  Demi Knight
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Redwater Battle continued in front of the Supreme Court Photo contributed

The legal battle of who should take ownership of abandoned wells on properties left by bankrupt oil companies across the province intensified as it landed in front of the Supreme Court.


On Feb. 15, the appeal for what’s now known as the ‘Redwater’ decision was heard by the nation's highest court and is now under consideration by justices as industry professionals, land-owners and environmentalists anticipate the final verdict.
“The decision affects not just Alberta’s oil and gas industry and our ability to enforce our rules. This decision impacts all industries and regulators in all provinces,” said Jim Ellis, Alberta Energy Regulator president and CEO in a statement on the appeal.
“It’s a disturbing picture: oil and gas companies 'incentive-ized' to walk away from thousands of wells, leaving behind the mess; receivers of bankrupt companies selling off the good assets and casting aside the bad ones; Albertans and Canadians being forced to bear the multimillion dollar costs of cleaning it all up.”
The Alberta Energy Regulator who was initially granted this appeal by the courts were also joined by members of the National Farmers Union and the Action Surface Rights Association who were also granted the right to intervene during this appeal, as the case of the controversial ‘Redwater’ decision was heard.
“We are very concerned about the implications of this case, because as farmers, we cannot refuse access to an oil company if it decides it wants to drill for the minerals that lie below our land,” said Doug Scott, NFU Regional Coordinator for Alberta. “If the banks and finance companies get their way, the oil companies will be able to just walk away from the messes they make and we will be left with contaminated soil, weeds, spilled fluids, and unproductive, permanently damaged soil.”
The Redwater decision which has split environmentalists and industry professionals on opposite sides of the fence since its enactment, was a ruling that took effect back in May 2016.
This decision was one that ultimately allowed for bankrupt oil and gas companies to leave wells on leased lands should they not have the financial means to reclaim them — which also meant that any profits from the sale of assets of these bankrupt companies would first go to creditors and not towards cleaning up the operation sites where these wells sit unclaimed.
Many argue conflicts with environmental rules currently in place.
This is becoming an increasing problem for farmers and landowners across the province who have had no choice but to deal with the ramifications of abandoned wells being left on their properties that can now cause potentially hazardous situations of their own.
“A lot of these wells have not been left in good shape and that’s really causing problems for the landowners,” says Daryl Bennett, Board Member of the Action Surface Rights Group, on why so many attended the appeal mid February. “Farmers have to continue to farm around these wells even though they could be potentially unstable, contaminating surrounding lands and crop and giving off sour gas, and there is no respect being given to the landowners in this case.”
After two lower-court rulings have sided with the initial ‘Redwater’ decision being made in 2016, the Supreme Court is now faced with the seemingly large task of making a final decision on whether these bankruptcy laws are too conflicting with the environmental rules in place within Alberta.
With many environmentalists also showing frustration at the decision to leave these wells unclaimed, the appeal that recently took place was attended by many who hoped to have their voices heard on the issue at hand.
“Instead of letting resource companies extract all they can, and then walking away if and when the costs rise above the returns, companies carrying out non-farming activities on farmland should be required to put up a bond to cover remediation costs as a condition of their leases,” says Jan Slomp, National Farmers Union’s first Vice President. “This should be a legal requirement in every province so the landowner is not left with polluted soil and clean-up expenses.”
However, representatives from insolvency professionals and banks with stakes in the decision were also in attendance at the appeal who believed that repealing the decision already made could lead to worse situations involving abandoned wells across Alberta.
With large arguments for and against the appeal, the case as a whole has attracted the attention of thousands of people inside and out of the province and as the tension builds the Supreme Court hopes to have a final decision on the matter by this summer.

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