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w w w . C A N A D I A N L a w y e r m a g . c o m J A N U A R Y 2 0 1 8 11 M ost people in the oil business call them "orphan wells." Simply put, when a well stops producing, it should be sealed, normally with concrete. Down- hole sealing reduces the chances of oil or gas or other contaminants leaking into the below ground aquifer or the atmosphere. Sealing can be time-con- suming and expensive, which means troubled oil companies tend to aban- don — or "orphan" — such wells. In spite of the rather sympathetic name, oil companies, drillers, landown- ers, environmentalists and the provin- cial governments continue to vigor- ously scrap over who is responsible for cleaning them up. Now, after years of legal wrangling and a split decision in the Alberta Court of Appeal last May, the Supreme Court of Canada is being asked to sort out the whole oily mess — or at least a significant portion of it. The case is Orphan Well Association v. Grant Thornton Limited (Redwater). The Supreme Court could hear the matter in late winter or early spring. Among those seeking intervener status are the Canadian Association of Petro- leum Producers, several Surface Rights Associations and possibly the govern- ments of Saskatchewan and British Columbia. The essential question is: If a well is abandoned by a bankrupt company, are any portion of the remaining assets of the bankrupt company required to go to well cleanup or does it all go to creditors? Grant Thornton Ltd., the receivers managing the windup of the bankrupt driller, Redwater Energy Corp., argues that the bankrupt drilling company can properly abandon or "disclaim" an orphan well, essentially removing a liability from its books. The Orphan Well Association, the party opposing Grant Thornton at the Supreme Court, is a non-profit organi- zation funded by the oil and gas indus- try and overseen by Alberta's Energy Regulator. AER's president, Jim Ellis, says that energy industry funding is important because that means "energy companies — not Albertans — pay for final closure of energy facilities." And, in Ellis' view, the fund is designed "to address true orphans" not as a place for bankrupt companies to unload liabili- ties they "no longer want to deal with." Whether AER is adequately funded is an ongoing controversy. Subsurface mineral rights generally SCC TO DECIDE WHO GETS STUCK WITH WESTERN WELL CLEANUPS \ AT L A N T I C \ C E N T R A L \ P R A I R I E S \ W E S T REGIONAL WRAP-UP Continued on page 12 m|bঞ;7;vb]m 1;rঞom-Ѵ1om|;m| uo71ঞb||ooѴv m_;u;-11;vv THE MORE. THE BETTER. Because you rely on Lexis Advance Quicklaw every day, we continue to invest in more content, more value and a better experience. lexisnexis.ca/advance-update Lexis Advance ® Quicklaw ® delivers legal insight Stay tuned for more in 2018! New in 2017: • Advanced Search Forms for precision searching • Key content at your fingertips with Explore Content • International Content • Legal news powered by The Lawyer's Daily™ ntitled-3 1 2017-12-20 11:41 AM

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