Steve Harper moved Justice Niel C Wittmann down from Alberta Court of Appeal to Court of Queen’s Bench in time to cement the set-up of Redwater ripping off Albertans and the environment, and to volunteer to take over and get rid of Ernst. J Wittmann announced his retirement right after Ernst vs AER lost at the Supreme Court.
BOE report published this article first thing this morning, but promptly removed it from publication. I managed to track it down via Google cache. Most interesting to note, that many lawyers, CEOs, bankers, etc, fully expect the SCC to uphold the Redwater ruling, and in the event our top Court overturns the ruling in which the federal BIAct overrides provincial polluter pay regulations, it’s anticipated this will cause disruptions in oil and gas lending.
This article makes it rather clear, that industry and their lenders are quite pleased with the Redwater ruling, and are thankful for a precedent setting ruling enabling them to renounce liabilities and unproductive assets. It seems industry and lenders are also hopeful the ruling is upheld to the detriment of the taxpayers in Alberta, but to the benefit of their businesses. It’s not hard to imagine this was a deliberate legal tactic orchestrated by ATB and Grant Thorton LLP. [And judges at all levels of court, including the Supreme Court of Canada, the chestless sods at the AER and petro-governments across Canada?]
With low commodity prices and billions worth of outstanding environmental obligations, Alberta is between a soft rock and a hard wellsite by James Roseo, December 4, 2017, BOE Report
This is Google’s cache of https://boereport.com/2017/12/04/with-low-commodity-prices-and-billions-worth-of-outstanding-environmental-obligations-alberta-is-between-a-soft-rock-and-a-hard-wellsite/. It is a snapshot of the page as it appeared on 4 Dec 2017 13:00:09 GMT. Then was pulled. Below is the article that was posted yesterday. The headline above is linked to today’s. Comparison between the two articles has not been done to note changes, if any.
Between July 2014 and January 2015, the price of West Texas Intermediate, North American’s crude oil benchmark, declined from roughly $105 to $46. At the time, of course everyone in the energy industry recognized the fallout as simply bad news. Seemingly overnight, entire business plans for the global upstream oil and gas sector and the service industry supporting it turned upside down. And while the immediate effects of such a drastic fall in the price of oil were easy to see coming: layoffs, slashed corporate budgets, and bankruptcies and receiverships, it was the reverberations to be felt in the forthcoming few years that were hardest to predict. As with any industry thrust into a state of flux so quickly, it was safe to assume that yes, there was to be aftermath.
In the years since 2014, perhaps the most glaringly obvious reverberation to rear its ugly head in Alberta has been the seemingly irreconcilable puzzle of addressing environmental liabilities left behind by defunct explorers (of which there have been many [cleverly set up by majors dumping properties across Alberta]). With the court case between the Alberta Energy Regulator and Grant Thornton, the court appointed receiver of Redwater Energy now going to the Supreme Court of Canada, it is clear this issue is a serious point of contention. As a reminder, the case involves setting the precedent for which parties receive priority in bankrupt estates when doling out the cash generated from liquidating assets. While the current precedent is for creditors to receive top billing, the AER wants that changed to address the billions worth of unfunded environmental liabilities routinely neglected and when push comes to shove, left on the hook for the Alberta taxpayer.
Alan Harvie, a Calgary based partner at law firm Norton Rose Fulbright specializes in environmental law. At a recent luncheon hosted by the Petroleum Joint Venture Association, Harvie discussed what the implications of the Redwater case are to the energy industry, and Alberta in general. When I spoke to him afterwards, he came across as confident that the Supreme Court will uphold the decision made by the lower Alberta courts in not changing the status quo. [Ernst completely agrees. Of course federal bankruptcy law trumps provincial. Redwater is a slick set up] Among the other industry people I spoke with, including executives of oil and gas producers, lenders, and investors, they all seemed to agree. Their collective reasoning was that since bankruptcy law lies in federal jurisdiction, it will ultimately trump provincial law. The laws the AER enforces are of course under provincial jurisdiction and so therefore second fiddle, in a sense, to federal law. [Yet, J Wittmann, the Court of Appeal of Alberta, and the Supreme Court of Canada all ruled in direct contradiction of this in Ernst vs AER, ruling that provincial law trumps Canada’s Charter, the top law in the country!]
The question that remains then as that if the Supreme Court does in fact uphold the decision, how will this mess, in both a literal and figurative sense, of unfunded environmental liabilities be cleaned up? And by whom? Again, after questioning the same set of industry people, it quickly became clear that there really is no consensus answer. That in the end, there ultimately will need to be some sort of compromise between the energy industry, and the Alberta government (read the people of Alberta). How that compromise will shake out remains to be seen. I did however hear some colourful ideas on how to solve the problem going forward (as in for every new well to be drilled) and the massive backlog of historical wells awaiting reclamation. [Don’t forget all the frac’d communities, aquifers, farms and families!]
The way the system works now involves companies being required to post a security bond upfront to the AER that is held for future liabilities. But in many cases, the security deposit is never fully posted or if it does, is grossly inadequate. That said however, there is indeed billions of dollars worth of security deposits currently sitting in a bank account, doing nothing more. One environmental consultant suggested to me that the security money be made into an endowment fund. If prudently invested, the interest and or dividend payments being thrown of the endowment’s principal could go towards paying to clean up wells in the Orphan Well Association’s inventory. [Pfffffffffffffffft. Anyone who thinks oil and gas companies are going to clean up their pollution and messes intentionally left behind in Canada needs a brain transplant. Alberta is leading the corrupt, greedy, irresponsible way]
Or perhaps, as one retired investment banker suggested, the province should create with the backing of say through the Alberta Investment Management Company (AIMCO), a mandated low cost reclamation operator to go about reclaiming disclaimed wells. Doing so would enable the currently fragmented reclamation service industry to achieve economy of scale, while also keeping the business’ return on capital sufficient enough to win business but also return money back to its provincial backer.
While both the above solutions seem at first glance tenable, when I mentioned these ideas to industry people like Alan Harvie, he for example didn’t seem to think they were realistic. [Of course not! The intention is to dump the clean up and costs on ordinary struggling Canadian families (federal tax dollars are already being taken to cover polluters), while the billion dollar profit takers retire in Victoria BC] Instead, Harvie mentioned to me an idea whereby companies could instead of watching their security deposit sit in a bank, actually use the money to clean up their wellsites. [Ha, that’ll never happen. Canada has become too petro dirty] Seems simple enough. Another more realistic solution came from an executive convinced that it being the end result. He thinks the Alberta government will simply look to increase the Orphan Well Association’s budget by raising the annual levy well license holders are meant to pay to it (as to who actually pays the levy is another story). In other words, just one more incremental tax to be added onto Alberta’s oil and gas producers. But therein lies the deepest point of contention underscoring the quagmire Alberta finds itself in: how on one hand can the province create an environment whereby the all-important energy industry can flourish while on the other hand balance that economic activity with costly environmental stewardship? [Those ugly words tell us everything we need to know. CAPP is already whining up a storm, companies wanting to pay less and less and less. Environmental stewardship need not be costly, if managed appropriately, always in a timely manner — before companies bankrupt and run. Greed and regulator sloth and corruption made it costly.]
To get to the bottom of that, Albertans will have to wait at the very least until the Supreme Court makes their decision. And who knows, maybe the Court will overturn the ruling. [If the court does, they’ll have to overturn their own ruling in Ernst vs AER too] If it does, many people feel that will be end of bank lending to Alberta’s oil and has industry. [Would be fantastic, if that happened. It would lead to humans getting off oil and gas, fast]
So…then what? Flux, meet chaos. [Emphasis added]
[Refer also to:
In AER vs Redwater, CAPP (Canada’s large oil and gas lobby group, the Canadian Association of Petroleum Producers) sent correspondence to the Court supporting AER. The Court included it in the docket for AER‘s appeal.
In Ernst vs AER, citizens and citizen groups sent correspondence to the Court supporting Ernst and water. The Supreme Court did not include any in the docket for Ernst’s appeal.
2017 04 28: Complaint against the lying AER & Alberta govt by Stewart Shields. Comment by Diana Daunheimer: “Grant Thorton LLP triple dipping, with the help of the AER?” AER vs Redwater: AER seeks leave to appeal to the Supreme Court of Canada
2017 04 24: AER’s $300 Billion Ponzi Scheme Closer to Fruition? Alberta Court of Appeal favours creditors over the environment, upholds Redwater decision. Did AER set this up to create horrific legal precedent to let companies hang their toxic pollution and massive damages on the public via the impotent Orphan Well Program?
2017 01 20: Redeye Vancouver Radio interviews Jessica Ernst on her loss at Supreme Court of Canada and her continuing lawsuit against Encana & Alberta Environment (Alberta Court of Queen’s Bench Chief Justice Neil Wittmann ruled Ernst can sue the “legally immune” water regulator but not the “legally immune” energy regulator, AER)
2016 04 13: AER Redwater Appeal: Will the courts protect the rich, make ordinary Canadians pay for industry’s abandoned oilfield messes? Alberta Court of Appeal to decide who will pay for Redwater’s abandoned wells after bankruptcy (using the law to intentionally avoid responsibility after years of profit-taking?)
2016 05 26: “Where does the buck stop?” AER to appeal ruling on oil, gas cleanup obligations. Chief Justice Wittmann found Alberta’s oil and gas licencing regime to be unconstitutional relating to money, but not in Ernst’s “valid” constitutional claim against AER relating to drinking water contamination by oil and gas
2016 06 28: AER calls itself a regulator? A law enforcer? Legally immune, grossly over paid, law-violating scaredy-cat more like it. AER backtracks again, to keep angry oil patch execs and banks happy.
MUST READ! ESPECIALLY THE CROSS REFERENCES BY ERNST 2016 08 21: BARRISTERS’ BRIEFS Aspiring to Highest Standards of Civility: Excerpt from speech on importance of civility and truth in legal profession by Alberta Court of Queen’s Bench Chief Justice Neil C. Wittmann
2016 09 22: Is AER vs Redwater worsening cleanup of abandoned oil and gas wells in Alberta, BC and Sasktchewan? Did AER file the lawsuit intentionally to set legal precedent and dump clean up costs on taxpayers to enhance profits for oil and gas companies?
2016 11 15: Really? “Tougher Alberta rules convince oil & gas producers to accelerate well cleanups.” What good does “accelerating” zero do? Why not just clean up now and quit the pathetic whining? Why then did the oilpatch dump their unpaid bills on farmers? The worst is yet to come.