Wednesday, May 16, 2018

Listen The Alberta Energy Regulator (AER) is not backing down from its fight regarding abandoned oil wells by energy companies that have filed for bankruptcy. They appeared before the Supreme Court of Canada on Thursday to dispute a ruling by Alberta courts.--Such bullshit



Troubling that the AER is presenting itself as working in the public interest when it is responsible for the underfunding of the orphan well program not to mention the slow pace of remediation in Alberta. No doubt there will be great fanfare as the SCC confirms the lower court order that the bankrupt company does not have to pay for the liabilities but the reality is this set up was designed to ensure the taxpayers are on the hook in my opinion. Bankruptcy law is set by the federal government and the SCC ruling to confirm the Redwater decision raises the interesting question of what the federal government will do about this mess.
The AER in any case is sitting pretty. It goes through this pretense of fighting for the public interest in this theatre of a lawsuit to confirm the immunity of the oil and gas sector from it's liabilities when the companies go bankrupt. This means that it is completely legal for an oil company to work in Alberta and make profits, then declare bankruptcy without any problems leaving the liabilities up to taxpayers.
Nice.
Only wish ordinary citizens had such rich options.
The AER is disputing an Alberta Court of Queen's Bench ruling from 2016. They say the ruling on sales assets during bankruptcy allow oil companies to get out of their…
GLOBALNEWS.CA|BY 630 CHED



https://globalnews.ca/news/4033013/redwater-ruling-before-supreme-court/

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February 18, 2018 3:25 pm

Alberta Energy Regulator argues Redwater ruling before the Supreme Court


Alberta's energy regulator continues to fight an Alberta Queen's Bench ruling regarding orphaned oil wells.
Alberta's energy regulator continues to fight an Alberta Queen's Bench ruling regarding orphaned oil wells.
AP Photo/Charlie Riedel
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The Alberta Energy Regulator (AER) is not backing down from its fight regarding abandoned oil wells by energy companies that have filed for bankruptcy. They appeared before the Supreme Court of Canada on Thursday to dispute a ruling by Alberta courts.
It began in May of 2016, when the Alberta Queen’s Bench ruled in favour of the bankruptcy trustee representing Redwater Energy Corp. Under the ruling, profits from the sale of assets would go first to creditors — not towards cleaning up operation sites.

Abandoned oil wells would be left to be cleaned up by the industry-funded, government-backed Orphan Well Association.
AER spokesperson Ryan Bartlett told the Alberta Morning News the decision undermines Alberta legislation and the provincial regulator.
“The receivers and trustees who manage company bankruptcy can avoid complying with provincial legislation and avoid our environmental and public safety obligations in order to maximize profit for secured creditors,” he said. “So as you can imagine, the AER took issue with this.”
Bartlett believes the ruling sets a precedent that will essentially allow companies to shirk responsibilities that come with a license to operate in Alberta’s energy sector.
Those include following all provincial legislation related to environmental preservation and public safety when mining for oil and gas, and complying with the AER’s liability management system.
“The Alberta Court’s decision poses a significant unacceptable risk to Albertans,” Bartlett said. “We believe that managing and regulating a province’s energy resources is the full responsibility of each province’s government.
“This decision impacts Alberta’s constitutional right to manage its own resources.”
The AER argues that allowing energy-based businesses to put profit over clean-up undermines their ability to regulate in the sector.
The liability management system operates by comparing a company’s assets to liability. If the ratio gets low enough, the company is obligated to take action to improve that ratio in order to keep operating under their license.
They can do this by reducing liability through closing sites and return the former oil wells to their natural state. Companies can also increase assets by purchasing new work sites with high levels of productivity. Finally, the business may post security with the AER with cash or a letter of credit.
“Our system was built under the premise that licenses are provided for energy development on the premise that companies will be held accountable to clean up their mess,” Bartlett said. “Our provincial legislation demands that accountability, and our liability management approach is founded on it.
“Our liability management system was created to balance multiple interests — that being environmental protection, public safety, landowner interests, but also investment royalties, jobs and market volatility.”
Bartlett added that no matter what the Supreme Court rules, the AER is committed to working with Albertans — including Indigenous communities, the energy industry and the provincial government to ensure public safety and environmental protection in the energy resource sector.

© 2018 Global News, a division of Corus Entertainment Inc.

Julie Ali · 

This article appears to be full of irony.

The AER is the front office of the oil and gas industry.
It is my understanding that the AER determines how much industry pays for the orphan well fund. It appears to have taken into account the problem of what would happen if a company goes bankrupt and no other company is willing to take on the liabilities of the exiting company. This despite the Auditor General of Alberta pointing this problem out to the AER and government in 2015.

https://www.oag.ab.ca/.../OAG%20Report%20July%202015.pdf 

In the event that a mine operator cannot fulfill its reclamation obligations, and no other private operator assumes the liability, the province may have to pay a potentially substantial cost for this work to be completed. Thus, a robust and responsive system to calculate and collect security from mine operators is essential.
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Government and political parties determine the regulations about bankruptcy.
So if the government has made the rules that ensure that the oil companies can walk away from their obligations as verified by the Redwater decision I fail to see how the Supreme Court of Canada fight is anything but bogus.

Basically, political parties who made the legislation did not account for this scenario. This requires amendment by the federal government which may or may not happen based on the SCC decision. If the Liberals do modify the bankruptcy legislation so that the oil companies don't walk away from their obligations they will be demonized by all.

Both the government of Alberta and the AER were fully aware of the risks in the system since the Auditor General of Alberta has kindly pointed out these risks but both entities ignored the risks because I guess in Alberta, political parties and the AER don't like to bother the oil industry with problems that taxpayers end up paying for.

Despite the 2015 audit the AER is now going around fighting for the taxpayers in this drama that makes me feel that Synergy Spin is not limited to Synergy groups but is also manufactured by the AER and the media.

How can the AER pretend to be working in the public interest when it has failed (in my opinion) to do anything about the underfunding of the orphan well program alone? This program recently required taxpayers to provide an interest free loan to them of $235 million plus the $30 million "gift" to ensure it was interest free. Nice.

How the AER has the gall to peddle this load of bullshit to go to media to present themselves as fighting for Albertans is beyond me. The reality is that ordinary citizens such as Jessica Ernst have been failed by the energy regulator in its various iterations. Jessica has spent a decade in court doing the work that the AER and the government of Alberta has failed to do.

http://www.ernstversusencana.ca/
On April 27, 2011 lawyers representing Jessica Ernst, a 54-year-old oil patch consultant, released a 73-page statement of claim that alleges that EnCana broke multiple provincial laws and regulations and contaminated a shallow aquifer used by a rural community with natural gas and toxic industry-related chemicals.

The claim methodically reports how Alberta’s two key groundwater regulators, Alberta Environment and the ERCB, “failed to follow the investigation and enforcement processes that they had established and publicized.”

The ERCB recently gave EnCana permission to drill and fracture more CBM wells above the base of groundwater protection near the affected water wells mentioned in this claim.

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The irony of the AER going to the SCC to fight for us when it fails to fight for us every day might be amusing if it were not so sad.
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Mike Kruper · 

Cleanup first.....third world rules in Alberta! Corruption.
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