Supreme Court to rule on whether energy companies can abandon old wells

OTTAWA — The Supreme Court of Canada is set to rule today on whether energy companies can walk away from unprofitable wells on agricultural land without having to clean up behind them.

A 2016 ruling in the Alberta Court of Queen’s Bench allowed a bankrupt energy company to sever its connection with unprofitable and unreclaimed wells when their assets were sold off to creditors.

The Alberta Court of Appeal upheld the ruling.

Since the case came to court, an estimated 1,800 wells representing more than $100 million in liabilities have been abandoned.

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 constitutional challenge to the regulator’s action.

The energy regulator and the Orphan Well Association, an industry-funded group that cleans up wells that have been left unreclaimed, have appealed the ruling to the high court.

A group with the support of thousands of farmers also wants to see the high court reverse the decision.

The Action Surface Rights Association has intervened in the case because it believes rights of landowners have been overlooked in the case.

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