Pffffffffffffffffffffffffffft, AER Hopes on a Rope & Farts out Puff Piece Propaganda Directive 67. With brilliant comments by Diana Daunheimer, censored by our media

Alberta to crack down on oil executives that dumped orphan wells on taxpayers, More changes are expected in the coming months as the province is conducting a review of how orphaned oil and gas wells, for which there is no financially solvent owner, are regulated in the province by Geoffrey Morgan, December 6, 2017, Financial Post

CALGARY — Alberta regulators will scrutinize oil and gas executives more closely to try to stop a rising number of energy companies from dumping their environmental clean-up costs on the province and its taxpayers.

The Alberta Energy Regulator announced Wednesday that it would conduct background checks on directors and executives to see if they’ve previously been involved with companies that have unpaid taxes, owe money to regulators or haven’t complied with existing rules. For those directors or executives with questionable backgrounds, the AER may refuse to issue new oil and gas licenses in the province.

Previously, all that was needed to obtain an oil and gas license in Alberta was a $10,000 down payment, an address within the province and a nominal amount of insurance.

However, changes to the rules come after 12 insolvent oil and gas companies handed off responsibility for cleaning up over 1,600 properties to the province over the last year-and-a-half, which saddled a clean-up agency called the Orphan Well Association with over $100 million in new costs.

Albertans could be about to lose billions, while banks reap a windfall

Bankrupt oil companies dump $100 million in clean up costs on Orphan Well Association in under two years

“As it stands now, there is [an intentional] loophole that allows directors and officials from oil and gas companies to use bankruptcy as an excuse to walk away from the wells that they are responsible for cleaning up,” Alberta Energy Minister Marg McCuaig-Boyd said during a news conference. [Why years too late? eg, after Redwater legal precedent set? NDP promised to clean up the corrupt AER in their election platform, have done nothing but lie, decrease royalties, increase subsidies to frac’ers, lie about frac’ing being clean and reducing emissions, and encourage the AER to continue massively deregulate]

She said the changes announced Wednesday are designed to close that loophole and make it more difficult for companies to dump responsibility for their unprofitable properties on the OWA in bankruptcy proceedings.

In certain cases recently, executives and directors from bankrupt oil producers started new companies in an attempt to buy profitable assets out of receivership but leave the unprofitable ones for provincial agencies [AKA, ORDINARY ALBERTANS] to remediate.

“We had seen a couple [??? Hundreds! Done for decades] companies that are doing this,” AER president and CEO Jim Ellis said. “We recognize that there was a gap in the directive and we need to close it. From my perspective, operators shouldn’t profit from bad behaviour.” [Ellis lies, a lot. These are just words, that mean nothing legally]

More changes are expected in the coming months as the province is conducting a review of how orphaned oil and gas wells, for which there is no financially solvent owner, are regulated in the province.

The AER has also taken increasingly assertive actions in recent months in an attempt to prevent companies from walking away from clean-up costs by implementing new rules for buying assets and intervening more frequently in bankruptcy proceedings. Wednesday’s rule change marks another attempt to prevent the situation from worsening.

“Details will matter but this seems like a move in the right direction. Something that, frankly, should have always been in place,” University of Calgary economist Blake Shaffer said of the change, adding that more details are needed. [Just another pollution enabler]

Shaffer recently co-authored a report for the C.D. Howe Institute that estimated cleaning up all the unproductive oil and gas properties in Alberta would cost $8.6 billion. [Just another pollution enabler. The estimate by AER records is more accurately hundreds of billions]

The report noted those cost risks flowing to taxpayers without policy changes, especially given a recent court decision in Alberta that allowed the receiver for Redwater Energy Corp. to disclaim responsibility for its uneconomic oil and gas wells while marketing profitable assets for sale.

That decision confirmed that Canada’s bankruptcy laws supersede Alberta’s environmental rules, which allowed for more companies to disclaim clean-up liabilities in bankruptcy. [While the courts ruled in direct contradiction of that, ruling that Alberta’s AER immunity, eg provincial rules, trump Canada’s highest law in the country – The Charter of Rights and Freedoms]

“If these weak firms go bankrupt, and creditors are still kept whole through the implications of the Redwater case, this sets up a serious moral hazard problem. Increasing the scrutiny on who can hold or acquire licenses helps to mitigate, somewhat, the proliferation of that type of activity,” Shaffer said.

The AER has appealed that decision all the way to the Supreme Court of Canada, which will hear arguments on the case in February.

In response to the decision, McCuaig-Boyd is also urging Ottawa to tweak existing bankruptcy laws to ensure that environmental obligations are not neglected until after debt holders are repaid. “If we don’t take action, the inventory at the OWA will likely keep growing,” she said. [Asking years too late]

Oil and gas industry leaders welcomed the additional scrutiny on directors. [Saturday Night Live? The Colbert Report?] Canadian Association of Petroleum Producers vice-president Brad Herald said at a news conference alongside Ellis and McCuaig-Boyd. “It’s time to put an end to companies that can walk away from oil and natural gas infrastructure without following through on their commitments to clean up sites,” he said. [Emphasis added]

Comment by Diana Daunheimer

Not sure why my previous comment was removed, but there is a listing of all the oprhaned assets on the OWA website.

On the AER website, you can find the listing of inactive wells, over 84,000 under Directive 13.

As well, you can see all the AER letters for violations of section 106 of the OGCA, where they name directors, as well as all the Inactive well non-compliances (about 30,000) and the numerous failures of care and custody of wells sites and facilites, this is found on the Compliance and Enforcement Dashboard. 4 hrs

Energy regulator vows to weed out bad operators before they start drilling by The Canadian Press, December 6, 2017, The Calgary Herald

EDMONTON — Alberta’s energy regulator is making changes that it hopes will keep bad operators out of the oilpatch.

Jim Ellis of the Alberta Energy Regulator says his agency will start asking tougher questions of companies applying for a licence to operate.

He says the regulator will look at the past performance of companies and directors before deciding to allow them to drill.

The regulator will look at such things as bill payment and past regulatory compliance.

Ellis says it’s an attempt to deal with the ballooning number of operators who have walked away from unprofitable wells during bankruptcy proceedings.

He says the problem is rooted in federal legislation and a three-year downturn in the industry, but this is one tool the regulator will use to try to control it. [Emphasis added]

Diana Daunheimer’s Comments: not showing on some media reporting of the AER’s latest propaganda, or on others where it was showing, it is now not. It is not known if Fascist Facebook or the media outlets are censoring Ms. Daunheimer’s brilliant, and much more honest comments than AER’s:

You know it’s just shit, when CAPP is part of it.
I’ve just read Directive 67, it’s a 7 page joke.

The AER “may” do this or they “may” not, arbitrary nonsense. Every detail of this Directive is nothing more than due diligence of a prudent regulator, measures which should have been in place, decades ago, to prevent the absolute shit show the AER has enabled and overlooked.

Until REDA is changed expect more of the same. When the AER is legally immune from any and all of their regulatory actions or inactions, and operate with no public interest or public health mandate, owe no duty of care to the public, are not agents of the Crown, and not beholden to the Public Service Act, Directive 67 is just token talking points and photo ops, with CAPP no less, the largest lobby organization in Canada.

Years ago, one of the many dozens of AER employees I’ve dealt with said the corporation takes most of their applications on “faith”. They rubber stamp them, as fast as they come in. In fact, the AER has committed to industry faster approvals on all applications.

Will that change? Will the AER actually review applications for veracity, completeness and adherence to regulations?

Heaven knows, they dropped the ball spectacularly in the approvals and applications around our home.

http://aer.ca/documents/directives/Directive067.pdf

14 hrs

By all means Mr. Ellis start with High Ground Energy, that ran the former Angle Energy, which deliberately poisoned our family with sour gas emissions and lied about it for years, installed insufficient surface casings, operated incinerators non-compliantly, vented without license, had unreported and untested vent flows and venting, kept well sites in disgusting conditions, falsified public notices, operated well sites over licensed H2S concentrations, had a well site fire, left contaminated waste in unlined sumps for 5 months, land-sprayed more contaminated waste on agricultural land and so on and so forth, then had a fire sale, as soon as we filed our legal action against them. Heather Christie Burns, Gregg Fishbuch et al, went right on with $600,000 severance pays to start a new company.

If you recall, when we met in Red Deer, at an AER function at Tiffany’s Steak House, you shook my hand and that of our children, and promised you’d assist us, but never did 13 hrs · Edited [Emphasis added]

After Ms Daunheimer contacted the media, asking why her comment was removed, she reposted as a new comment Dec 7, 2017. It will be interesting to see how long the Herald allows it to remain in public view: 

Diana Daunheimer

You know it’s just crap, when CAPP is part of it.
I’ve just read Directive 67, it’s a 7 page joke.
The AER “may” do this or they “may” not, arbitrary nonsense.
Every detail of this Directive is nothing more than due diligence of a prudent regulator, measures which should have been in place, decades ago, to prevent the absolute mess the AER has enabled and overlooked.

Until REDA is changed expect more of the same. When the AER is legally immune from any and all of their regulatory actions or inactions, and operate with no public interest or public health mandate, owe no duty of care to the public, are not agents of the Crown, and not beholden to the Public Service Act, Directive 67 is just token talking points and photo ops.

22 mins 

Diana Daunheimer

By all means Mr. Ellis start with High Ground Energy, that ran the former Angle Energy, which deliberatley poisoned our family with sour gas emissions and lied about it for years, installed insufficient surface casings, operated incinerators non-compliantly, vented without license, had unreported and untested vent flows and venting, kept well sites in disgusting conditions, falsified public notices, operated well sites over licensed H2S concentrations, had a well site fire, left contaminated waste in unlined sumps for 5 months, landsprayed more contaminated waste on agricultural land and so on and so forth.

If you recall, when we met in Red Deer, at an AER function at Tiffany’s Steak House, you shook my hand and that of our children, and promised you’d assist us, but never did.

22 mins

4 Comments Uncensored:

Julie Ali · University of Alberta
Yeah right. With the Redwater decision that the Supreme Court will confirm, we will have both bad and good operators run out on their liabilities without any sort of problems. The banks and the businesses will do fine. The taxpayers will be left with the environmental liabilities with the full agreement of the AER, the folks at CAPP who are the puppet masters of the politicians and the political parties themselves that are captive to the industry. The set up is neat and is maintained by the fiction generated by both the AER and the government of Alberta. At least be truthful here. Tell us that there is no way we can hold the energy regulator which is the front office of big oil accountable and that the AER doesn’t care if their business partners default on their orphan well obligations, the lake district tailings pond solution or really anything else. As usual, banks will get their due and the ones paying for the environmental problems will be citizens. But there you go. All the political parties are captive and we’re forced to listen to #AERSPIN. [Emphasis added]

William Macdonald
The suspended well problem is a Goverment problem caused by years of poor policy. Regulating a ban on surface rental reduction, coupled with removing the Landowner from the reclamation process are the two main drivers behind the number of suspended wells. It takes a responsible operators 10 years to get a reclamation certificate, through an arcane process devised by “environmentalists”. More money is spent on evaluating the clean up, than the capital required to remediate the clean up. The Goverment directed “orphan well fund” spends 300% more than industry average to abandon a well. Assuring more Government involvement in this issue, is a joke.

Bill Adams · Edmonton, Alberta
thanks for all the useless knowledge and we will take it your for taxpayers continueing to spend on this then?

U E Cory Lanterman
New small companies will be kept out which are usually Albertan’s and local jobs will be affected. Hmmm. The whole system is in need of repair and non profits run by huge corporations for clean up should be outlawed. Courts should enforce business laws and the laws should be updated to reflect industry needs.

Bill Adams · Edmonton, Alberta
yes lets depend on the courts cauze that solve problems so quickly after THAT HAVE HAPPENNED! HA

Julie Ali · University of Alberta
Courts are enforcing bankruptcy payments. The Redwater Case illustrates that the industry is off the hook.

http://www.mountainviewgazette.ca/…/Redwater-ruling…

[Ms Ali quotes Diana Daunheimer in Mountain View Gazette:] “Redwater ruling allows receivers to “cherry pick”

Justice Wittmann used the federal Bankruptcy and Insolvency Act law to override provincial regulations to rule that money from the sale of Redwater’s assets should go to the company’s creditors rather than be used to pay for the reclamation of non-producing wells. Wittmann, in fact, set precedent on cherry picking the good wells and tossing the bad ones to the orphanage of public funding.”

Anthony Tost · SAIT
So you’ve allowed bad operators

[Refer also to:

2017 06 12: It pays well to lie & deregulate: AER CEO Jim Ellis pay & benefits: $737,060 in 2016, $621,680.71 in 2015

2016 07 26: Redwater ruling allows receivers to “cherry pick” by Diana Daunheimer, Mountain View Gazette

Re: “Stop taking land agents at their word,” July 5, 2016 commentary by Frank Dabbs.

Once again, you have brought misleading and completely erroneous information to our community on the oil and gas sector, specifically the Redwater ruling, the role of surface land agents and the rights of landowners and lease agreement holders.

As per the Redwater ruling, you wrote: “Justice Wittmann said in effect that a receiver cannot cherry pick the good wells in a bankrupt company’s portfolio of assets but must deal with the bad wells too.”

The opposite would be true of this ruling. Justice Wittmann used the federal Bankruptcy and Insolvency Act law to override provincial regulations to rule that money from the sale of Redwater’s assets should go to the company’s creditors rather than be used to pay for the reclamation of non-producing wells. Wittmann, in fact, set precedent on cherry picking the good wells and tossing the bad ones to the orphanage of public funding.

There are dozens of assessments on this ruling and perhaps you should read some of them. You then claim the AER “piled on by doubling something called the liability management ratio (LMR) for the companies it regulates – in other words it raised the threshold of fiscal strength to pay well abandonment costs.”

The LMR was raised from 1.0 to 2.0, but only for when a company wants to sell or buy assets and is merely a token insurance policy to ensure companies have two times the assets as they do liabilities. Not a penny is actually directed towards paying future abandonment costs. To further, in response to many “angry calls” by companies, the AER has recently stated they will review each asset sale on a case- by-case basis going forward. Additionally, the AER is appealing the Redwater ruling.

Then your narrative switches gears to somehow claim that “surface landowners can reduce the orphaning of wells.”

May I ask how? How can a landowner prevent a formation from declining, or stop a company becoming insolvent? Surface landowners have no say in how a well site is operated, deemed inactive, suspended, or abandoned. They actually have no say in how a well site is reclaimed or remediated either.

Surface landowners also have no right to deny access to a company well site for which they have a lease agreement, nor can they enforce such a provision, as you suggest. Have you forgotten about the ultimate legislation in Alberta? Right of entry.

Landowners have no rights, with or without a lease agreement. Even in the presence of a lease agreement, in the event of a breach of contract, under REDA, the AER will not intervene, and the matter must go before the courts. And the Surface Rights Board is not the place to get your past due lease payments sorted out. Do review the Lemke decision.

Additionally, one cannot lay blame on the land agent. Although many have unsavoury tactics and poor ethics, they are merely contracted by, and a salesperson for, the company. The lease agreements and promises they bring to the tables of residents and farmers across Alberta are the legal obligation of the company, simple as that.

Finally, you do not need an early warning system for well orphaning in Alberta. They all will be orphaned one day, joining the some 140,000-plus already awaiting abandonment. Some wells will be neglected far sooner than others, such as fracked gas and oil wells in high decline areas, such as the Harmattan basin of our community. If a land agent is telling you that they will get rich and have a producing well for decades, that is rubbish. Numerous well sites only drilled in 2010 onwards are already suspended in our township for lack of production. The landowner is then left with a terrible liability that may never get remediated or resolved. The recent Redwater ruling has only furthered the burden on the public and surface landowners.

I would expect that you will take the responsible measure to gather the accurate regulatory and legal information relating to the issues you have commented upon, then find the time to correct your narrative, so the people of our community are provided with facts, not fiction. [Emphasis added]

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