February 1, 2019
SUPREME COURT ORPHAN WELL DECISION
WELCOMED BY GREEN PARTY OF ALBERTA
CALGARY – The Green Party of Alberta welcomes the sound decision by the Supreme Court of Canada to uphold the right and duty of provincial regulators to perform environmental cleanup of abandoned and orphaned oil wells with liquidated assets, while refuting the argument that bankruptcy laws make an unassailable protection of creditors right to repayment.
As Chief Justice Richard Wagner wrote, “Bankruptcy is not a licence to ignore rules, and insolvency professionals are bound by and must comply with valid provincial laws during bankruptcy.” Accordingly, the Green Party of Alberta also calls for the provincial government to put in place firm timelines for reclamation.
A May 2016 ruling by the Alberta Court of Queen’s Bench allowed trustees for bankrupt companies free to sell any productive assets for the benefit of the creditors and walk away from the rest, leaving them for the industry-funded Orphan Well Association and the taxpayers to clean up. Now, backed by this fair and clear ruling by the Supreme Court, the environmental obligations of the bankrupt entities will take priority over the claims of creditors.
Low oil prices since 2014 have led to more bankruptcies of companies, resulting in an enormous increase in newly orphaned wells from a manageable 74 in 2012 up to a current total of 3127 newly orphaned wells. Petroleum Services Association of Canada (PSAC) records indicate that as of January 2016, there are 77,658 inactive wellbores in Alberta alone that will need surface location reclamation. With every passing month, the burden on wildlife and on our streams and groundwater has been mounting from these orphan wells.
The Green Party of Alberta sees this as an opportunity to convert orphan wells into geothermal energy production resources, with infrastructure and basic drilling already in place. Such a point of emphasis will inject the province with badly-needed jobs and begin the task of revitalizing communities.
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For more information, please contact:
Leader of the Green Party of Alberta and Nominated Candidate in Calgary-Varsity.