The Alberta Energy Regulator (AER) has commenced an appeal of the May 19, 2016 Alberta Court of Queen’s Bench decision in the matter of Redwater Energy Corp.
The decision allows receivers and trustees to disclaim AER licensed assets as a means of avoiding abandonment and reclamation obligations that normally attach to AER licences. The decision may encourage further receiverships and bankruptcies as a means of avoiding end of life obligations and poses a risk of a significant increase in the number of orphaned AER licensed assets. The AER takes the position that receivers and trustees should not be permitted to avoid end of life obligations in this manner. For that reason, the AER is appealing the decision.
The AER ensures public safety and environmental protection are maintained throughout the lifecycle of energy development. We continue to assert that our requirements must be complied with in order to protect public safety and the environment. This includes ensuring licensees and insolvency professionals remain responsible for complying with AER requirements.
Under the Oil and Gas Conservation Act and Pipeline Act, receivers and trustees are considered licensees and must comply with AER requirements. This includes fulfilling all requirements related emergency and incident response, abandonment and reclamation.
Backgrounder: AER Court of Queen’s Bench Appeal – Protecting Albertans and the Orphan Fund from shouldering the costs of abandonment and reclamation.