SCC decision could leave taxpayers paying to clean abandoned oil wells

January 30, 2019

Partner David Bish spoke with the CBC in an article on abandoned oil and gas wells across Alberta, and the growing concerns for taxpayers who might have to “pick up the tab” to fund the cleanup.

On January 31, the Supreme Court of Canada will release its decision in Orphan Well Association v. Grant Thornton Limited. In the case, Alberta oil and gas company Redwater Energy went bankrupt in 2015; the controversy is between the main lender, ATB, which wants to sell the company’s productive wells and use the proceeds to pay off debtors, and the Alberta Energy Regulator, which insists the money must be spent on cleaning up the abandoned wells.

David discussed the concern if the SCC decision goes in favour of the insolvency industry.

“Environmental issues are popular in insolvency across the board, not just in oil and gas, but in forestry, in mining, and in manufacturing,” he said.

“It’s presented that people can pollute, they can make a lot of money while they pollute, and when there’s a downturn, they can walk away from those liabilities and not pay.”

We wrote about this case when the Court of Appeal of Alberta released its decision in April 2017. You can read our summary of the case until that point in "Redwater appeal dismissed in favour of creditors."

David, along with the rest of our team, provides more insight on corporate restructuring and advisory on the relevant practice page.

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