There has been a great deal of anxiety pending a Supreme Court decision on the issue of if energy companies, in Federal bankruptcy proceedings, can get around the Provincial laws obligating them to meet the environmental remediation or reclamation responsibilities of their well abandoned sites.
Here is a link to the Supreme Court briefing note on this very important decision for Alberta energy industry and environmental obligations to Albertans as owners of the resources.
If these legal duties of energy companies, for environmental obligations, could be avoided by merely going bankrupt, then Albertan taxpayers could be left with the job of fixing and cleaning up tens-of-thousands of well sites. This is because industry payments into meeting these requirements and lax reinforcement of well-site abandonment policies are woefully inadequate, and have been for years.
With the current Alberta economic situation we can expect some vocal backlash to this decision from some conventional energy companies. But where were they in the days of$100+ and why didn’t the put more funds in reserve to meet these obligations? As for those who have use spare cash to buyback shares instead of reserving funds for these environmental obligations, why would Albertan’s, as the resource owners have any sympathy?
We are still facing a crisis in the oil patch because past governments lack of diligence in requiring sufficient security before any company transfer of environmental obligations in energy lease and asset sales plus. There is woefully inadequate industry funding regime for orphan well demands too.
Albertans need to start acting like resource owners. That means follow this issue carefully and closely in the media and what various political parties are saying about it and what policy positions they are taking to resolve the matters. This is a billion-dollar boondoggle potentially left to future generations unless responsible political and industry leaders start taking it more seriously. That will only happen if fixing this mess becomes an election issue.