By Charles Lefebvre

Orphan Well Association ‘encouraged’ by Supreme Court ruling regarding abandoned wells

Jan 31, 2019 | 3:30 PM

OTTAWA, ONT. — The Orphan Well Association says they’re currently reviewing a recent ruling from the Supreme Court of Canada regarding the cleanup of abandoned wells.

The Supreme Court ruled in a 5-2 decision Thursday that bankrupt energy companies still need to fulfill their environmental obligations and clean up old oil wells before paying back creditors.

“The Orphan Well Association is encouraged by the decision from the Supreme Court of Canada,” the organization said in a statement. “The OWA is currently reviewing the decision to understand the impact it will have on our organization. This decision has potential impacts to not only the OWA but to the regulatory and financial community as well as oil and gas producers and will take time for those involved to determine next steps.”

The decision centred around the case of Redwater, an Alberta company which went bankrupt in 2015. In 2016 the Alberta Court of Queen’s Bench ruled a bankrupt energy company could sever its connection with unprofitable and unreclaimed wells when the assets were sold to creditors. The Supreme Court ruling overturns this decision

Grant Thornton Ltd., the creditors for Redwater, will have to render abandoned wells environmentally safe.

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The Orphan Well Association says as of March 31, 2018, there were 1,778 abandoned wells in the province, according to a release. The organization plans to decommission 700 wells during this fiscal year.