Oil companies have to pay for environmental cleanup : in the news this week

Details: Published on Monday, 04 February 2019 11:14; Written by editor

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A Supreme Court ruling this week says bankrupt oil companies have to pay for environmental cleanup before paying off debt.

When Alberta-based Redwater Energy Corporation went bankrupt in 2015, the company’s bankruptcy trustee tried to repay its $5-million debt back to its bank, leaving abandoned wells to the Orphan Well Association (OWA), an industry-owned association, to clean up.

When the Alberta Energy Regulator, also an industry-controlled body, said Redwater could not ignore its environmental responsibilities, the company took its case to court, arguing federal bankruptcy laws took precedence over provincial laws.

This week’s Supreme Court ruling in the Redwater case prevents bankrupt or insolvent companies from walking away from environmental obligations.

The top court’s decision is a “big deal,” writes David Climenhaga. Had the court ruled in favour of Redwater, “it would have opened the door to an effective strategy for fossil fuel extraction companies to walk away from the costs of cleaning up after themselves and dump billions of dollars in liabilities into the laps of provincial taxpayers,” he says.

But the ruling doesn’t change the bigger picture. The province still has more than 80,000 inactive oil and gas wells, facilities, and pipelines as well as 1.4 trillion litres in fluid oils and tailings, says an analyst with the Calgary-based Pembina Institute. The total cleanup cost is at least $57 billion, though many contest that figure’s accuracy.

In other environment news this week, read Lois Ross’s column on massive climate demonstrations in Europe, and David Suzuki’s review of Canada’s new food guide, which promotes a diet good for people and the planet.

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