Keystone Pipeline Spill Response deemed a Success

In early December, a section of the Keystone Pipeline leaked 210,000 gallons of oil near the South Dakota City of Amherst.  Representatives of Trans-Canada Pipeline, the owner of the pipeline, deemed the detection of the leak and prompt spill response as an example of its exemplary contingency measures that are in place to detect and respond to such incidents.

An aerial view shows the darkened ground of an oil spill which shut down the Keystone pipeline between Canada and the United States, located in an agricultural area near Amherst, South Dakota.
REUTERS/Dronebase

When fully complete, the Keystone Pipeline will carry bitumen from the Alberta oil fields to refineries in Texas.  At present, the pipeline runs from Alberta, through North Dakota and South Dakota.

As reported in the Prairie Public News, Julie Fedorchak of the North Dakota Public Service Commission (PSC) stated that the company’s quick response to the incident shows that its response plan worked perfectly.

“The system was shut down within three minutes,” Fedorchak said.  “And importantly, the spill was detected.”

Fedorchak said the spill showed up on its detection equipment, and the people overseeing system noticed it, and.

“They knew it was something off,” Fedorchak said.  “And the quick shutdown prevented what could have been a much more difficult spill.”

But Fedorchak said there are still questions about why the spill happened.

“It’s a new line,” Fedorchak said. “New lines like this shouldn’t be having those kinds of issues.”

Fedorchak said it’s important that the company and federal pipeline regulators do the tests needed on that pipeline, to try to figure out what caused it.

“That’ll be a learning opportunity for the entire industry,” Fedorchak said.

The company believes it may have been caused by an abrasion on the pipeline coating, that happened during construction.

“Perhaps there were some things in the ground that could have caused it,” Fedorchak said. “Or it could have been a problem with the pipeline protection itself. They’re looking at a number of things.”

Clean-up work continues at the spill site.

Growing Interest in Brownfield Redevelopment in Windsor

As reported in the Windsor Star, it has taken almost seven years for a municipal brownfields development incentive program to take hold in the City of Windsor, immediately across the Detroit River from the City of Detroit.

In the last several months, applications to the Brownfield Redevelopment Community Improvement (CIP) Plan have been steadily streaming in — seeking grants to help fund feasibility and soil studies, and then even more money to help pay for the pricey cleanup.

If they become realities, these developments could add up to hundreds of new residences on: the former GM Trim site on Lauzon Road; a collection of former industrial properties between Walkerville and Ford City; and most recently a large property near Tecumseh Road and Howard Avenue that for 50 years was the home of Auto Specialties, a manufacturer of malleable castings and automotive jacks for the auto industry.

Greg Atkinson, a senior planner with the city who co-ordinates the Brownfields CIP program, said it’s “awesome news” that investors are finally taking advantage of this “great incentive package.”  The reason they’re jumping aboard now, he said, is that Windsor’s land prices have risen and residential vacancy rates have declined to the point where developing these cheaper brownfield properties now make financial sense.

“But without the incentives I don’t think they would be redeveloped,” Atkinson said. “With them, they’re pushed into that realm of viability, and that’s what we’re starting to see.”

Almost 140 sites across the city have been identified as brownfield properties, covering 559 acres.

“Historically, there has been little interest in redeveloping brownfield sites due to the uncertainty surrounding the extent of contamination and the potential cost of cleanup,” says a city report that goes to the city’s planning, heritage and economic development standing committee Monday. It says one redeveloped brownfield acre saves 4.5 acres of farmland on a city’s outskirts from being developed, and that for every dollar invested in brownfield redevelopment, $3.80 is invested in the community.

An illustration cut out from an unknown trade publication/manual, circa 1940, shows the Auto Specialties Manufacturing Company (Canada) located near the northeast corner of Tecumseh Road and Howard Avenue. The plant made malleable castings for the automotive industry and also automotive jacks. Photo courtesy of the University of Windsor, Leddy Library. UNIVERSITY OF WINDSOR / WINDSOR STAR

“It’s great to see owners and developers coming forward and saying ‘We’d like to tap into this fund because we’re interested in redeveloping this site,” Mayor Drew Dilkens said of the recent flow of applications. “The more of these 140 properties we can activate, the better it will be for all of us in the City of Windsor because it provides more taxes and lowers everyone’s share.”

The most recent application is from THMC Windsor, for a $7,000 grant to pay half the cost of a feasibility study on the viability of redeveloping part of the massive parking lot behind the medical buildings at Howard and Tecumseh into a residential project. Auto Specialties operated on the 12.5-acre site from the 1920s to the 1970s.

The next grant THMC could apply for provides up to $15,000 to cover half the cost of soil and groundwater testing for possible contamination. Then if the owner decides to go ahead with cleanup, the Brownfield Rehabilitation Program compensates for the cleanup costs by effectively freezing taxes where they are (versus what they would rise to when the site’s redeveloped) for the first 10 years. There’s even a big break on development fees.

“It really does cover a lot of costs,” Atkinson said of the program.

Of the 15 applications to the program since 2010, 13 have come in the last 22 months. Grants have totalled $1.9 million, leveraging $16.9 million in private sector investment, according to the city.

The earliest and most prominent success happened at a former gas station property at Dougall Avenue and West Grand Boulevard, which was turned into a small commercial development with the help of $67,000 in city grants. The former Wickes bumper plant — now run as a big UHaul operation, also was rejuvenated thanks to $1.5 million worth of grants. A former gas station at Riverside Drive and Marentette Avenue has been cleaned up and readied for redevelopment. And earlier this year, the Sood family received study grants to redevelop the former Seagrave fire truck plant property on Walker Road into about 12 townhouses and turn 17 acres of largely vacant industrial land south of Edna Street, west of St. Luke Road and north of Richmond Street into between 200 and 250 residential units.

On Monday night, council approved grants totalling $32,000 to help pay for three feasibility and environmental studies costing $97,000 for the 60-acre former GM Trim site. The current owner Farhi Holdings has plans to redevelop the site into a commercial-residential project with about 240 residential units. 

Dilkens said there’s clearly a demand for residential development in the east side of the city where Farhi’s land is located, and replacing the derelict site with a new housing project would benefit the entire area.

But Atkinson cautioned that not all these projects end up being developed. “Sometimes, they’ll determine it’s not feasible, there’s no demand for what they’re thinking of, or they might do the sampling and find out it costs too much to clean up.”

The Walker Power Building in Windsor, Ont., summer 2015

Spill Response Questioned for Pipeline underneath the Great Lakes

As reported in the Maritime Executive, Canadian pipeline operator Enbridge is engaged in a debate with environmental groups over the operation of an underwater pipeline that runs beneath the Straits of Mackinac, the narrow waterway between upper and lower Michigan.

Last month, Enbridge reached an agreement with Michigan state government that allows it to continue operating the line, except during weather conditions that would interfere with a spill response. The agreement defined poor weather as wave heights over eight feet. In return, Enbridge promised to study the possibility of replacing the line – which sits above the surface of the lakebed – with a pipe buried in a tunnel. The firm said that it would also look at measures to reduce the risk of damage to the current pipeline from boat anchors.

Red lines show where Line 5 crosses Straits of Mackinac (Source: Enbridge)

Recently, Michigan’s Pipeline Safety Advisory Board called for the Governor of Michigan to shut down the line until repairs are made to areas where the exterior protective coating is missing, they are not sure if the repair will need more than a swivel flange installment, or more extensive repairs. It also requested that State Government’s deal with Enbridge be revised to allow pipeline operations only when waves are three feet high or under.

Local environmental advocates contend that these measures do not go far enough. These ativists say that the board and the governor did not take into account a prominent feature of wintertime navigation on the Straits of Mackinac: ice. The Coast Guard is the only entity in the region with icebreakers, and its vessels are usually busy ensuring the safety of navigation during the wintertime. In the event of a spill, the service says, the nearest icebreaker could be up to two days away.

In congressional testimony last month, Coast Guard Commandant Adm. Paul Zukunft said bluntly that his service is not prepared to handle the worst-case scenario for pipelines like Line Five. “I will go on the record and say that the Coast Guard is not Semper Paratus [always ready] for a major pipeline oil spill in the Lakes,” he said.

Enbridge says that Line Five’s dual 20-inch pipelines remain in excellent condition and have never experienced a leak in their 60 years of operation. The line is used to transport natural gas liquids, light crude oil and light synthetic crude, and it supplies most of Michigan’s propane.

“We’re committed to the letter and spirit of this important agreement [with the governor], and to the options outlined in the agreement that move us to a longer-term set of decisions about the future of Line Five,” said Enbridge spokesman Guy Jarvis, speaking to Michigan Public Radio.

 

Nearly $3 million awarded for R&D of Marine Oil Spill Response Technology by Canadian Federal Government

The Canadian federal government recently announced investments of $2.89 million for four projects to enhance marine incident prevention and responsiveness along Canada’s ocean coastlines.

Centre for Cold Ocean Resources Engineering (C-CORE)

Through its Oil Spill Response Science (OSRS) program, the federal government provided $991,500 to C-CORE, a St. John’s-based research and development company, to increase the efficiency of existing mechanical oil recovery systems for heavy oil products in harsh, cold environments.  The government of Newfoundland and Labrador will also provide $428,500 to the project.

“This project leverages C-CORE’s expertise in analytical modelling, computer simulation and large-scale physical tests to assess and optimize technology performance in harsh environments,” Mark MacLeod, C-CORE president and chief executive officer, said in a statement.

Lab-scale test apparatus for oil recovery

The main intermediate outcome of this project consists of an improved oil spill collection and separation system that can be integrated in an efficient response technique including a specially designed vessel.  The system will be based on the established concepts and proven technologies for recovery of heavy oil spills from sea water in cold and ice prone ocean environments.

The long-term outcome of the project will include specialized vessels with the required detection, storage, and spill removal systems, tested and proven in the real life conditions.

Project partners with C-CORE include Elastec, Eastern Canada Response Corporation Ltd. (ECRC), and InnovatechNL.

University of Toronto

A further $400,000 will go to a University of Toronto project that will develop a sorbent-based direct oil collector (called In-Situ Foam Filtration System or ISFFS) for use in oil spills.  This system will be capable of directly reclaiming the dissolved, emulsified, dispersed, and free oil from marine spill sites.  To meet this objective, the development of advanced functional foams (sorbents), implementing a bench-top system, and design and optimization of in-situ filtration process as a proof-of-concept will be undertaken.

The ISFF will directly collect the oil from the spill site by pumping through oil sorbent bed, which serves as the filtration media.  For this type of foam, there is no need for high oil-sorption capacity thus, functionalizing the foam with toxic and expensive elements can be avoided along with minimizing material costs.  Moreover, the in-situ filtration will make the oil sorption process continuous, simplifies oil collection, making oil spill response quicker and more cost effective.

Project partners include Tetra Tech, Polaris Applied Sciences Inc., Dr. Foam Canada, Gracious Living Innovations Inc., and ShawCor Ltd.

University of Alberta’s Advanced Water Research Lab

The OSRS program will be contributing $600,000 towards a $1.65 million project be undertaken at the University of Alberta.  The project involves the development of an on-board membrane based hybrid oil/water separation system.  If successfully developed, the system will significantly increase the capacity of recovery vessels that physically collect oil spilled at sea, thereby reducing the cost and spill response time for cleanup.  The technology can be directly and easily incorporated into existing rapid deployment spill clean-up systems mounted on ships or barges.  It would be ready to commercialize for manufacturers of existing oil spill clean-up tankers, making the research easy to implement for large or small-scale spills and for potential use in future high-risk areas of development.

BC Research Inc.

Finally, the federal OSRS program committed $925,000 to BC Research Inc., a company with a broad experience in chemical product development, to further develop a hybrid spill-treating agent (STA) that will help slow or prevent the spread of an oil slick on water.

If the R&D project is successful, a hybrid STA will be commercially available that can be used to combat marine oil spills at large scale.  The hybrid STA would have both gelling and herding properties, to prevent or slow down the spreading of an oil slick by rendering it into a thickened (gelled) state, as well as to use it as a herding agent, to facilitate either controlled burn or skimming operations.

Current oil recovery rates for spills on water are estimated to be in the range of 10-20%.  With current STAs, there are few options to prevent or slow down weathering processes, including spreading and dispersion. Delaying the spreading and weathering process would potentially facilitate cleanup and improve the degree/rate of oil removed.

Project partners include NORAM Engineers and Constructors and the University of British Columbia.

Volunteers cleaning Ambleside Beach in West Vancouver, 1973. (Source: John Denniston)

Canadian Government to spend $80 million to Study Oil Spills

Building on the announcements of $3 million in funding for R&D on oil spill response technology, the federal government recently announced it is spending $80-million on oil spill research on preventing spills as well as their effect on the marine environment.

There will be $45.5-million set up for a research program that will foster collaboration among researchers in Canada and around the world, with $10-million a year to bring scientists together to study how oil spills behave, how to clean and contain them and how to minimize environmental damage. 

The Centre for Offshore Oil, Gas and Energy Research in Halifax will also get some of the $16.8-million in funding for new scientists and specialized equipment.  It will support oil spill research to better understand how oil degrades in different conditions.

Another $17.7-million will be used to fund research and development of enhanced ocean computer models of winds, waves and currents to allow responders to better track spills.

The funds are part of the $1.5-billion Oceans Protection Plan, which is aimed at developing a marine safety system.

 

U.S. EPA Targets Superfund Sites for Immediate Clean-up

The United States Environmental Protection Agency (U.S. EPA) recently released a list of Superfund Sites targeted for immediate, intense action, as of December 8th 2017. The list is a response to July’s Superfund Task Force Recommendations. The U.S. EPA considers the sites listed to benefit from Administrator Scott Pruitt’s direct engagement, requiring timely resolve of specific issues to streamline cleanup and redevelopment and protect human health and the environment.

3D Image of NAPL contamination at the B.F. GOODRICH facility in Calvert City, KY

The list, spanning all ten EPA regions across the United States, with accompanying plans, issues, and categorizations associated with each site, can be found here.

As reported in the Washington Post, the push is part of Administrator Scott Pruitt’s promise to prioritize the decades-old cleanup program, even as the Trump administration shrinks the size and reach of the EPA. The 21 sites highlighted by the agency span the country, from a former tannery site in New Hampshire to a contaminated landfill from the World War II-era Manhattan Project in St. Louis to an abandoned copper mine in Nevada.

“By elevating these sites, we are sending a message that EPA is, in fact, restoring its Superfund program to its rightful place at the center of the agency’s mission,” Pruitt said in a statement. “Getting toxic land sites cleaned up and revitalized is of the utmost importance to the communities across the country that are affected by these sites.”

The U.S. EPA said that it developed the list using sites “where opportunities exist to act quickly and comprehensively.” Notably, the agency also acknowledged that “there is no commitment of additional funding associated with a site’s inclusion on the list.”

Char Technologies Ltd. Announces Acquisition of the Altech Group

CHAR Technologies Ltd. (“CHAR”) (YES:TSXV) recently announced that it has closed the acquisition of  the Altech Group (“Altech”), which is comprised of  Altech Environmental Consulting Ltd. and Altech Technologies Systems Inc.  Altech provides solutions to environmental engineering challenges.  Founded in 1986, Altech has 12 employees and a diverse and stable client base.  CHAR acquired all issued equity in both Altech Environmental Consulting Ltd., and Altech Technology Systems Inc.  Altech shareholders received 4,523,810 in common shares of CHAR as well as $150,000 in cash.

Bill White, Chairman of CHAR stated that, “The acquisition of the Altech Group adds over 30 years of experience in environmental technologies and professional engineering consulting” and that “Altech provides CHAR with a growth catalyst to move much of our engineering design in-house, while at the same time allows us to greatly expand our technology solutions offering for industrial clean air and clean water.”

CHAR brings the shareholders of Altech a succession plan and an opportunity to realize value at an optimal time.  According to Alexander Keen, Founder and CEO of Altech, “CHAR brings an exciting future for Altech. Our joint efforts going forward will bring tremendous opportunities”.

The new joint enterprise plans to commercialize a new cleantech solid fuel branded “CleanFyre”.  This product is a GHG neutral coal replacement, generically referred to as biocoal.  CleanFyre will allow large industrial customers the ability to greatly reduce their GHG emissions without significant capital expenditures.  According to Andrew White, CEO of CHAR, “CleanFyre will leverage both Altech’s experience and expertise, and CHAR’s platform pyrolysis technology, the same technology used to create SulfaCHAR, to create a solution with strong market pull and significant growth opportunity.”

About CHAR

CHAR is in the business of producing a proprietary activated charcoal like material (“SulfaCHAR”), which can be used to removed hydrogen sulfide from various gas streams (focusing on methane-rich and odorous air).  The SulfaCHAR, once used for the gas cleaning application, has further use as a sulfur-enriched biochar for agricultural purposes (saleable soil amendment product).

About Altech Group

Altech is a full-service engineering and consulting firm providing energy, environmental, and health and safety services to clients.  Altech specializes in corporate management systems, energy and environmental audits and assessments, contaminated site investigation and remediation, health & safety management, training, and industrial hygiene.  Established in 1986, Altechemploys multi-disciplinary professionals including energy and environmental engineers, scientists, hydrogeologists, geologists, and technicians committed to providing our clients the highest quality service and integrated solutions for business and the environment.

Market Report on the Emergency Spill Response Industry

360 Market Updates recently issued an Emergency Spill Response Market Research Report that highlights key dynamics of North America Emergency Spill Response Market sector.  The Research Report passes on an initial survey of the emergency spill response market including its definition, applications and innovation.  Additionally, the report explores the major market players in detail.  The Research Report provides a detailed overview and discussion the status of the players involved in emergency spill response.  It is also a valuable source of information on trends in the industry including projected growth.

Key questions answered in the Emergency Spill Response Market report include the following:

  • What will the market growth rate of Emergency Spill Response market in 2022?
  • What are the key factors driving the North America Emergency Spill Response market?
  • What are sales, revenue, and price analysis of top manufacturers of Emergency Spill Response market?
  • Who are the distributors, traders and dealers of Emergency Spill Response market?
  • Who are the key vendors in Geographical market space?
  • What are the Emergency Spill Response market opportunities and threats faced by the vendors in the North America Emergency Spill Response market?
  • What are sales, revenue, and price analysis by types, application and regions of Emergency Spill Response market?
  • What are the market opportunities and risks?

There are 15 Chapters to deeply display the North America Emergency Spill Response market.

Chapter 1, to describe Emergency Spill Response Introduction, product type and application, market overview, market analysis by countries, market opportunities, market risk, market driving force;

Chapter 2, to analyze the manufacturers of Emergency Spill Response, with profile, main business, news, sales, price, revenue and market share in 2016 and 2017;

Chapter 3, to display the competitive situation among the top manufacturers, with profile, main business, news, sales, price, revenue and market share in 2016 and 2017;

Chapter 4, to show the North America market by countries, covering United States, Canada and Mexico, with sales, revenue and market share of Emergency Spill Response, for each country, from 2012 to 2017;

Chapter 5 and 6, to show the market by type and application, with sales, price, revenue, market share and growth rate by type, application, from 2012 to 2017;

Chapter 7, 8 and 9, to analyze the segment market in United States, Canada and Mexico, by manufacturers, type and application, with sales, price, revenue and market share by manufacturers, types and applications;

Chapter 10, Emergency Spill Response market forecast, by countries, type and application, with sales, price and revenue, from 2017 to 2022;

Chapter 11, to analyze the manufacturing cost, key raw materials and manufacturing process etc.

Chapter 12, to analyze the industrial chain, sourcing strategy and downstream end users (buyers);

Chapter 13, to describe sales channel, distributors, traders, dealers etc.

Chapter 14 and 15, to describe Emergency Spill Response Research Findings and Conclusion, Appendix, methodology and data source

According to an earlier study by Markets and Markets research firm, the emergency spill response market is estimated to be worth USD 33.68 Billion by 2022.   Markets and Markets research firm hold the view that the emergency spill response market is driven by the increasing international trade and transportation and initiatives taken by government agencies of various countries globally to protect the environment from the adverse effects of pollution by enacting various environmental protection and restoration policies and legislations. In the future, government initiatives to strengthen the response to oil spills on the sea would provide opportunities to the players operating in this market.

Spencer EM Consulting forms Strategic Alliance with Flood Barrier America

Spencer Emergency Management Consulting is recently announced it has formed a strategic alliance with Flood Barrier America, Inc..  Combining experts in flood risk assessment with a suite of world class flood response capabilities in order to provide total solution to clients.

Spencer Emergency Management Consulting is focused on the strategic integration of emergency management concepts towards an outcome of resilience within a community, business or government.

Flood Barrier America, Inc. (FBA) provides high quality and practical flood resilience products, services and solutions. FBA does research and collaborates with affiliates and partners that protect against the growing global problem of flooding.

Flood Barrier provided by FBA

 

 

Canada: Courts Struggle to Mix Bankruptcy and Environmental Law – SCC To Hear Redwater Appeal

Article by John GeorgakopoulosGiselle Davidian and Serin Remedios

Willms & Shier Environmental Lawyers LLP

The Supreme Court of Canada (SCC) granted leave to hear the appeal of Orphan Well Association v Grant Thornton Limited.1 The SCC will reconsider whether trustees and receivers in bankruptcy must remediate wells in priority to the claims of secured creditors.

In April 2017, the Alberta Court of Appeal released its decision in Redwater.2 The Court found that the Government of Alberta’s environmental orders for oil well remediation did not have priority over secured creditors in bankruptcy proceedings.

In upholding the lower court’s decision, set out in our previous update, the Court of Appeal added to the “untidy intersection” between bankruptcy proceedings and provincial environmental law. Both Courts concluded that receivers and trustees were permitted to renounce an insolvent debtor’s interest in its licensed assets while selling valuable licensed assets to maximize recovery for secured creditors.

The decision, as it stands, allows receivers and trustees in bankruptcy to disclaim unprofitable assets and not be required to fulfill certain environmental obligations associated with those disclaimed assets.

Recap

The case revolves around the assets of a junior, insolvent oil and gas producer, Redwater Energy Corporation (Redwater).

Orphan Oil Well

When Redwater’s primary secured creditor began enforcement proceedings under the Bankruptcy and Insolvency Act (BIA), Grant Thornton Limited (GTL) was appointed as receiver and trustee.3 Several of Redwater’s oil wells had costs of remediation exceeding the value of the wells. GTL took control of only 20 of 127 Redwater’s assets and disclaimed the oil wells that had onerous environmental abandonment costs.

Alberta oil and gas legislation requires licensees, including trustees, to comply with “end-of-life” rules for oil wells. Where no one is financially capable of remediating and abandoning a well, the well is designated an “orphan well” under Alberta’s Oil and Gas Conservation Act (OGCA).4/em>

The Alberta Energy Regulator (AER) ordered GTL to remediate the disclaimed oil wells before distributing funds to creditors. When GTL indicated that it did not intend to remediate the wells, AER and the Orphan Well Association (OWA) brought applications asking the court to void GTL’s disclaimer of the non-producing wells and order GTL to comply with AER’s orders. AER argued that Redwater’s insolvency and bankruptcy did not affect Redwater’s environmental obligations and that GTL was legally required to discharge those obligations before paying Redwater’s creditors.

GTL brought a cross-application challenging the constitutionality of AER’s stance on GTL’s environmental obligations and seeking approval of the sale of Redwater’s valuable wells.

At issue was whether AER’s orders were provable claims in bankruptcy and therefore subject to bankruptcy proceedings. If AER’s orders were subject to bankruptcy proceedings, other creditor’s claims would take priority. The practical outcome being that the corporation would likely have no means of satisfying its environmental obligations after settling its obligations to other creditors. The cost of remediating the orphan wells would then fall on the Government of Alberta.

As we previously reported, Alberta Court of Queen’s Bench concluded that the applicable sections of the OGCA and Pipeline Act (PA) frustrate the federal purpose of the BIA of managing the winding up of insolvent corporations and settling the priority of claims against them. Based on the doctrine of paramountcy, the OGCA and PA were inoperable to the extent that they conflicted with section 14.06 of the BIA. This section of the BIA exempts a receiver or trustee from personal liability, allowing a trustee and receiver to disclaim assets, and prescribes the priority of environmental remediation costs.

OWRA and AER appealed the decision.

Court of Appeal Decision

The Court of Appeal upheld the lower court decision. The key issue on appeal was the priority and treatment of environmental claims in bankruptcy, and whether environmental claims were provable claims under section 14.06 of the BIA.

Priority and Treatment of Environmental Claims in Bankruptcy

The Court found that the BIA was amended in 1997 to specifically address environmental claims. The BIA now incorporates environmental claims into the general bankruptcy process, rather than exempting them. Following the test set out in Newfoundland and Labrador v AbitibiBowater Inc., the Alberta Court of Appeal found that AER’s orders were subject to bankruptcy proceedings.5 By refusing to permit the transfer of Redwater’s valuable assets unless funds were set aside for remediation, AER reduced the environmental obligations to “sufficiently certain” monetary claims. Accordingly, AER cannot indirectly interfere with the value of assets in a bankruptcy by placing financial preconditions on the transfer of AER licences.

Constitutional Law Issue

The Court of Appeal held that there was an operational conflict between federal and provincial regimes. The Court found that the provincial regulatory scheme frustrated the purposes of the BIA, which include determining the priority of claims against insolvent corporations. The practical outcome being that GTL did not have to comply with AER’s remediation obligations prior to settling claims of secured creditors.

Nortel and Northstar

The dissenting opinion briefly considered the two leading cases in Ontario on environmental claims in bankruptcy and insolvency: Nortel Networks Corporation (Re) and Northstar Aerospace Inc. (Re).6 In Nortel, the Court found that some of the Ministry of the Environment’s (MOE, as it then was) orders had priority over creditor claims, but in Northstar, the Court found that the MOE’s orders did not have priority.

Implications

The practical implications of Redwater may be far reaching not only for the worlds of bankruptcy & insolvency and oil & gas, but also for the world of director and officer liability.

Will we see more Alberta provincial environmental orders aimed at former directors and officers? In Northstar, after the Court found the MOE’s orders did not have super priority in insolvency proceedings, the MOE issued a remediation order personally against the former directors and officers.7

We will look to the SCC to provide clarity on this important, albeit untidy, area of law.

Footnotes

1 2017 ABCA 124 [Redwater].

2 Ibid.

3 RSC 1985, c B-3 [BIA].

4 Redwater at para 21; Oil and Gas Conservation Act RSA 2000, c O-6, s 70 [OGCA].

5 2012 SCC 67.

6 Nortel Networks Corporation (Re), 2013 ONCA 599 [Nortel]; Northstar Aerospace Inc. (Re), 2013 ONCA 600 [Northstar].

7 Northstar Aerospace, Inc. (Re), 2012 ONSC 4423. Subsequently, on November 14, 2012, the MOE issued a Director’s Order against the former directors and officers personally.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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About the authors

John Georgakopoulos resolves complex environmental legal issues for clients, uniquely drawing on his technical knowledge as a former senior environmental scientist with the Ontario Ministry of the Environment and Climate Change. John is called to the bars of Ontario and Alberta.

Giselle Davidian is an associate lawyer practicing in the areas of environmental law, environmental litigation, energy and natural resource law and Aboriginal law.  Giselle draws upon her technical knowledge as a former environmental scientist at a consulting engineering firm to help clients meet their goals.  Giselle is fluent in French and Armenian and has a working knowledge of Italian.  Giselle is called to the bar of Ontario.

Serin Remedios is an associate lawyer practicing environmental litigation as well as environmental, Aboriginal, northern and energy law.  Serin’s past experience in environmental science helps her understand clients’ problems and assist them in meeting their goals.  Serin is called to the bar in Ontario.

This article was first published in the Willms & Shier Environmental Lawyers LLP website.