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Page added on June 7, 2016
Creditors get priority over environment in Redwater Energy insolvency: judge
Alberta Chief Justice Neil Wittmann has ruled to put lenders ahead of clean-up costs when energy companies go bankrupt.
The Redwater Energy case is one that the energy sector, international investors, bankers, lawyers and regulators were all watching closely.
Redwater was a tiny oil and gas company that went into insolvency in the spring of 2015. It owned a stake in 16 producing oil and natural gas wells, as well as nearly 70 more inactive wells. It owed its bank, ATB Financial, a little more than $5 million.
Redwater’s bankruptcy trustee, Grant Thornton, wanted the ability to sell the producing wells in order to pay back debt.
However, the Alberta Energy Regulator (AER) argued that any proceeds from asset sales needed to go first to clean up the mess — namely those 70 non-operational wells, that have not been subject to the costly decommissioning process.
The judge ruled Wednesday that secured creditors, such as banks, have priority over environmental concerns.
“The immediate reaction from the lending community certainly will be a positive because they will have certainty when they lend as to what will be ahead of them and behind them,” said David Bish, a partner and insolvency expert with Torys.
The case was heard over two days in December 2015. The decision took five months, as it’s widely expected to be appealed.
Abandoned wells in Alberta
The provincial government has several lines of defence against paying well clean-up costs. Healthy companies are required to keep enough assets on hand to cover the cost of decommissioning. Even if that contingency fails, industry funds an Orphan Well Association to do the work.
However, the current recession in the oilpatch has meant a quickly mounting caseload for the OWA. This ruling, allowing the separation of producing assets from those that are not economic, threatens to unleash a wave of costs that could overwhelm the OWA’s budget.
The OWA argued in the case that its funding would have to be substantially increased if it had to take on all the bad wells in the province.
AER response
The Alberta Energy Regulator said it is not yet able to comment on the decision. But Bish said the AER could still have some firepower.
The regulator put out a bulletin recently reminding people that it has other ways of going after companies that don’t take care of their environmental obligations. That message was aimed at directors and officers of companies.
“The AER has very expansive powers with respect to steps that it could take against directors and officers and those are unquestionably intimidating,” said Bish.
“So I don’t think that anyone can breathe a sign of relief and feel like — it’s done we don’t need to worry about the AER — they still have teeth.”
18 Comments on "Creditors get priority over environment in Redwater Energy insolvency: judge"
HARM on Tue, 7th Jun 2016 4:44 pm
Is anyone really surprised by this outcome?
It reminds me of the reasons why the environment almost never gets priority in *any* court case or piece of legislation: (a) trees, deer and squirrels don’t write checks (bribes) to politicians and (b) don’t vote.
Ditto for children, which is why public schools –especially in poor neighborhoods– are the way they are. And why all but one Republican governor turned down (quite literally) free Medicaid/ACA federal money to insure their poorest and most vulnerable residents, covering 100% of the cost for the first 3 years, and then 95% of it after that.
String900 on Tue, 7th Jun 2016 5:00 pm
This is OUTRAGEOUS.
String900 on Tue, 7th Jun 2016 5:01 pm
I”m betting a Judge on the Take.
Go Speed Racer on Tue, 7th Jun 2016 7:37 pm
Awesome. The evil rich who poisoned the water get their investment money paid back. The farmer who is drinking benzene and dies, he gets to pay his own funeral bill. And pay to bury his animals too.
Anonymous on Wed, 8th Jun 2016 2:45 am
Canadian judges are a notoriously corrupt lot for the most part, like the larger gov’t system they serve. Like all uS colonies, alberta and its officials, protect shareholder wealth above all and routinely shield the activities of the very wealthy from any kind of scrutiny. Much less ‘justice’.
Apneaman on Wed, 8th Jun 2016 12:10 pm
The big judge, judge Mama, is about to bring down the gavel down on the humans.
‘We’ve never seen anything like this’: Arctic sea ice hit a stunning new low in May
“The 2016 race downward in Arctic sea ice continued in May with a dramatic new record.
Daily extents in May were also two to four weeks ahead of levels seen in 2012, which had the lowest September extent in the satellite record. The monthly average extent for May 2016 is more than one million square kilometers (386,000 square miles) below that observed in May 2012.
In other words, for Arctic sea ice, May 2016 was more like June 2012 — the record-breaking year. Going into the truly warm months of the year, then, the ice is in a uniquely weak state.
“We’ve never seen anything like this before,” said Mark Serreze, who directs the center. “It’s way below the previous record, very far below it, and we’re something like almost a month ahead of where we were in 2012.”
https://www.washingtonpost.com/news/energy-environment/wp/2016/06/07/weve-never-seen-anything-like-this-arctic-sea-ice-hit-a-stunning-new-low-in-may/?postshare=4191465390943341&tid=ss_tw
Apneaman on Wed, 8th Jun 2016 12:14 pm
Long Overlooked Area of Antarctica Sees Major Ice Loss
“Over the past few years, the evidence has piled up that glaciers in parts of Antarctica have been melting and retreating at an increasingly worrying — and potentially unstoppable — pace.
Now, new research shows that glaciers in a region of West Antarctica that has received relatively little attention to date have lost a considerable amount of ice. And that ice melt and retreat has been going on for decades, longer than previously thought.”
http://www.climatecentral.org/news/overlooked-area-antarctica-major-ice-loss-20408
Apneaman on Wed, 8th Jun 2016 12:16 pm
Four people remain missing and three people are known to be dead, as the massive storm cell that devastated parts of the east coast causes record flooding in Tasmania.
“Conditions in Tasmania are said to be worse than the state’s deadliest floods on record, in 1929, with flood warnings still in place for several rivers.”
http://www.abc.net.au/news/2016-06-06/wild-weather-devastates-east-coast-three-dead-four-missing/7483380
Apneaman on Wed, 8th Jun 2016 12:31 pm
Photos: Paris Flooding Subsides, but Damage Will Be Costly
http://www.wsj.com/articles/photos-france-and-germany-hit-by-floods-1464877724
Apneaman on Wed, 8th Jun 2016 12:36 pm
Rockman and his oily masters do not want the good folks of Texass seeing the price that’s paid.
Flood-related oil spill photographs shouldn’t be hidden
Photos of flood-related oil spills were on state-run website
Removed by DPS for “privacy concerns”
If not for El Paso Times story, process to see them would be cumbersome
“An El Paso Times story last month revealed the existence of numerous aerial photos of flood-related oil spills on a state-run website. The response from the state of Texas was predictable, yet still disappointing:
State officials ordered the photos removed from a website operated by the University of Texas at Austin.
The photos, which weren’t generally known to the public until the Times’ story, showed potential environmental damage caused by flooding in oil-drilling areas, including fracking sites.
The photos provided useful information, particularly to people who live in or near the affected watersheds. But a state official said the photos were meant to be used by emergency management personnel in real-time settings.”
http://www.star-telegram.com/opinion/opn-columns-blogs/other-voices/article81221647.html
Stuifzand on Wed, 8th Jun 2016 12:51 pm
The Great Paris Flood of 1910:
https://en.wikipedia.org/wiki/1910_Great_Flood_of_Paris
“The 1910 Great Flood of Paris (French: Crue de la Seine de 1910) was a catastrophe in which the Seine River, carrying winter rains from its tributaries, flooded Paris agglomeration, France. The Seine water level rose eight meters above the ordinary level.”
Apneaman on Wed, 8th Jun 2016 12:54 pm
It’s a cancer industry feedback loop. LMAO
Flooding shuts Magellan Houston products line
http://www.argusmedia.com/news/article/?id=1251455
Apneaman on Wed, 8th Jun 2016 12:55 pm
Stuifzand, do you have a point?
Stuifzand on Wed, 8th Jun 2016 1:01 pm
“Stuifzand, do you have a point?”
No, do you?
I noticed that this thread began to develop in a Floods-in-Paris thread and I decided to make my little contribution.
Apneaman on Wed, 8th Jun 2016 1:18 pm
Stuifzand, you seem to be willfully ignorant of the words “record” and “historic” in the many flood stories that have been happening all over the planet – same for fires, storms, drought, melting ice and pn and on. You know as was predicted decades ago and is now coming true? Holy fuck the Texas floods in May are record breaking – they beat the record breaking Texas floods from the month before. You’re none to bright at spotting the patterns are you? Here is another pattern, I only post weather/disaster reports that are record breakers or near record breakers and I never lack for material. In fact, I have more as AGW pushes the world into catastrophic climate change.
LOUVRE TO REOPEN AFTER HISTORIC PARIS FLOODS
“The government has said the flooding in the Paris region is the worst since 1982, and in other areas of France the Seine surpassed a 1910 record.”
http://www.newsweek.com/louvre-reopening-paris-floods-seine-467592
Stuifzand on Wed, 8th Jun 2016 1:33 pm
“Stuifzand, you seem to be willfully ignorant of the words “record” and “historic” in the many flood stories that have been happening all over the planet”
I am deeply sorry if I have offended you by posting a fact, I shouldn’t have done that, not without warning. Again, my apologies.
Interesting is that if I sum up the data concerning Parisian Floods, leaning on information as provided by you, we arrive at:
Year—–Medal
1982—–Gold
2016—–Silver
1910—–Bronze
Since you are the self-described Pattern Guy here and I am merely a receptive student, I can’t wait to become more enlightened about the Pattern, as discerned by you, in the data as presented in my little table?
That climate change is receding since 1982?
I am all ears.
Stuifzand on Wed, 8th Jun 2016 2:13 pm
Brand new article on my favorite enemy media outlet, der Spiegel:
http://www.spiegel.de/wissenschaft/natur/unwetter-die-bizarre-sehnsucht-nach-klimawandel-a-1096368.html
“Rain and the climate bluff”
“Everything is climate change”
Gist of the article: climate change has become the catch word for every weather phenomenon and particularly the large amount of recent rains. On social media everybody is talking about climate change (lol)
But if you look at the data you see that there is no spectacular change in the intensity of heavy rainfall. The number of days (in Germany) with rainfall over 20 mm hasn’t increased since 1951.
Perhaps this is different for other countries, if so, please present data from official weather-institutions, not your a**.
simonr on Thu, 9th Jun 2016 4:46 am
Hi Stuifzand
The problem with these stats is the magic number 20mm
To be meaningful we would need to know the results at 25mm 30mm 35mm etc.
Thanks
Simon