It’s a wrap: Hockey Fights and Contaminated Sites

Tackling a topic that is of increasing concern to Albertans was on the agenda for an early morning breakfast talk on Tuesday, October 3rd 2017. Government representatives, environmental lawyers, industry professionals, law students and others gathered at the University of Calgary downtown campus to hear local experts discuss contaminated sites and orphaned wells, and the challenges and opportunities they pose for municipalities.

Paul Leong (Senior Technical Advisor, Environmental & Safety Management, The City of Calgary) and Nigel Bankes (Professor, University of Calgary, Chair of Natural Resources Law) were joined by the Honourable Shaye Anderson, Minister of Municipal Affairs at the ELC’s most recent Green Regs ‘n’ Ham.

Jason Unger, Executive Director, set the stage for the discussion with anoverview of the issue of contaminated sites and other underutilized sites across Alberta should be an ongoing concern for not only municipalities but Albertans as a whole.

Paul Leong provided an overview of the process used by the City of Calgary when dealing with proposals to remediate contaminated sites for a higher valued use.

Taking into consideration both human and ecological concerns, the City’s guidelines prescribe a multi-step process that takes into consideration the types of contamination, the type of proposed development, environmental site assessments, the development of a remedial action plan and risk management plan, and review of proposals with the appropriate provincial regulatory authorities. He further noted that environmental standards have evolved over the years and that remediation of brownfield site requires remediation to the standards of the day.

The Alberta Court of Appeal upheld a decision on April 24, 2017 giving secured creditors priority in the case of bankrupt Redwater Energy Corp. The court upheld the ruling in favour of Grant Thornton, Redwater’s trustee in bankruptcy, and its lender, ATB Financial, who wanted to sell off its productive wells to pay secured creditors and leave the unproductive and abandoned wells for the industry-supported Orphan Well Association to remediate.The Alberta Energy Regulator argued funds from the sale of the productive wells must be used to cover cleanup expenses for the unproductive wells. The AER is seeking leave to appeal.

More information:

ABLAW Blog

Osler Review

CBC News

Global News

Professor Nigel Bankes discussed the significant challenges faced by provincial authorities as a result of the recent Orphan Well Association v Grant Thornton Limited decision (often referred to as the “Redwater decision” by the Alberta Court of Appeal. That case has raised significant issues concerning outstanding liabilities of the oil and gas industry and how federal law is undermining provincial management of assets, sparking legal interventions from adjoining BC and Saskatchewan.

Citing the recent CD Howe Institute All’s Well that Ends Well: Addressing End-of-Life Liabilities for Oil and Gas Wells, Bankes notes that what is needed is to bring an intergenerational equity lens to how we develop and regulate industries, including requiring upfront financial security for remediation and reclamation of sites. In essence this requires that the current generation pay the costs of development today to ensure the environmental burdens and liabilities do not impair the quality of life of future generations. Bankes has provided his full comments here.

The ELC recognizes the Brundtland Report’s definition of intergenerational equity as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”. World Commission on Environment and Development (WCED). Our Common Future. Oxford: Oxford University Press, 1987 (the “Brundtland Report”).

From CD Howe Institute Website “First, the authors recommend the province introduce an upfront bonding requirement. However, this bonding requirement should be less than the full expected liability cost. This recognizes that society should accept some risk in exchange for greater economic activity, as well as aligning with the time profile of a well’s net asset value.” Second, once a well enters the inactive phase, the province should require companies to hold insurance to cover the cost of cleaning up the well. In comparison to a strict time limit on inactive wells, an insurance requirement would allow firms to weigh the increased cost of holding unproductive wells against the potential value of returning them to production.”

Shaye Anderson, Minster of Municipal Affairs, was also in attendance and spoke about the Government’s changes to the Municipal Government Act and the new City Charters, with the intention of providing municipalities a bigger role in managing environmental issues in their jurisdictions. His recent visits to many of Alberta’s towns and cities demonstrated to him the need to ensure that there are sufficient and effective tools for municipalities to address issues such as contaminated sites. Anderson spoke about the importance of a healthy environment to a municipality and noted that economic sustainability and environmental sustainability are not exclusive and go hand in hand.Minister Anderson also noted the importance of the Environmental Law Centre as an independent and balanced voice for all Albertans. (We appreciated the shout-out!)

The Environmental Law Centre recognizes several core environmental principles that are required for strong and effective environmental laws, policies and legal processes. These core environmental principles are:
* sustainability,
* precautionary principle,
* pollution prevention,
* polluter pays,
* cumulative impacts,
* intergenerational equity and
* public participation. In addition to these core environmental principles, environmental laws, policies and processes must be:
* constantly improving,
* reflective of and contributing to evidence-based best practices,
* open, transparent and accountable. ELC’s Core Environmental Principles

Luckily there were few punches thrown (Don Cherry would have been disappointed) and in post-game wrap up the speakers welcomed questions from the audience.  No one was sent to the penalty box (which remains to be seen in the ongoing “hockey fight” in Calgary

Management and regulation of contaminated sites and legacy oil and gas sites are a high priority for government, industry, municipalities and many Albertans. The ELC will continue to give 110%, keep our stick on the ice, and our heads up in the neutral zone to ensure decisions result in a clear win for the environment and for Albertans.

SPECIAL THANKS TO

and to Burnett Duckworth Palmer LLP for sponsoring a table for 8 University of Calgary law students to attend.