Current Problems


Redwater Energy avoids liability for orphaned wells

January 31, 2019

Alberta Energy Regulator (AER) – Supreme Court of Canada decision 2019 SCC 5 ruled in favour of the AER and Orphan Well Association’s (OWA’s) appeal of the Redwater decision. From the May 2016 Redwater decision until January 30, 2019, receivers and trustees involved in 28 insolvencies renounced their interest in more than 10 000 AER-licensed sites (wells, facilities, and pipelines) with deemed liabilities of almost $335 million. In that same period, the OWA’s inventory of wells increased more than 300 per cent from 768 to 3100.

We recognize that funds are limited in many insolvency cases and that there may not be enough to fully address all end-of-life obligations, which reinforces the need for further changes. To address this, we are currently working on an improved liability management framework that we believe will strengthen our existing system.