On November 9, the Supreme Court of Canada (SCC) announced that it would review a judgment of the Alberta Court of Appeal that threatens to eviscerate Alberta’s oil well abandonment and reclamation program. The decision blocks the Alberta Energy Regulator (AER) from ensuring that proceeds from the sale of a bankrupt oil company’s wells are used to satisfy its outstanding environmental obligations. In short, the decision grants lenders the right to separate the wheat from the chaff. The problem is that the chaff is the abandonment and reclamation costs of a bankrupt’s non-producing wells.
How dire is it that key financing for the abandonment and reclamation of wells has been lost? Last month, a C.D. Howe study found that the potential social cost to rectify this problem is predicted to range from $338 million to $8.6 billion. It is still undecided which party or parties will pay, and how much they would pay, but as things stand today, the remaining oil and gas companies operating in Alberta will pay the costs. Failing that, these costs will be paid by Alberta taxpayers.
This presentation will discuss the upcoming case in the Supreme Court of Canada and the challenges facing the Alberta government with this situation.
Dr. Fenner Stewart will be the presenter.
He is an Assistant Professor at the University of Calgary, Faculty of Law. He teaches the Dentons’ North American Energy Law Study Tour, Oil and Gas Law, Business Associations, and the Faculty of Law’s Graduate Seminar in Legal Theory. Before coming to the University of Calgary, Dr. Stewart was an Assistant Professor at Capital University Law School, where he taught business law, corporate finance, comparative corporate law, legal theory, and energy law courses. His research focuses on the intersection of private business law theory and public administrative law to shape business, energy, and natural resource governance.
This event is sponsored by the Alberta Law Foundation.
Murray Fraser Hall, Room MFH 3360