Alberta’s energy regulator said Calgary-based Pieridae Energy’s attempted purchase of the southern Alberta assets from Shell Canada goes against the intent of environmental laws, in a May 14, 2020 story. (Photo by THE CANADIAN PRESS)

Alberta Energy Regulator blocks sale of Shell assets over clean-up concerns

Extent of the contamination unknown

CALGARY — Alberta’s energy regulator has cited clean-up concerns in blocking the sale of sour gas wells, pipelines and other facilities from an energy giant to a much smaller company.

In a decision released Thursday, the regulator said Calgary-based Pieridae Energy’s attempted purchase of the southern Alberta assets from Shell Canada goes against the intent of environmental laws.

The issue was seen as a test case of the regulator’s determination to avoid clean-up costs for energy facilities falling to the taxpayer.

In its written decision, the Alberta Energy Regulator said it wasn’t happy with how the deal would have split the liability for cleaning up the sites, especially at a pair of gas processing plants. The terms of the sale would have had Shell responsible for existing contamination and Pieridae on the hook for future problems.

“The scope and extent of the contamination at the site is not well known and is not well described in the applications,” the decision said. ”To date, the contamination at the sites has not been fully understood.”

Without knowing that, the regulator said, it would be impossible to know which company would have been responsible for what.

The decision also said the company that made the mess should clean it up.

“Shell is the polluter,” said the decision. “The … applications appear to request that the AER, by way of approval, override or at least significantly dilute Shell’s obligations.

“The AER is of the view that it cannot, by way of approval, carve up and redistribute fundamental regulatory obligations in a manner that is contrary to or inconsistent with (the law).”

The two companies agreed to the deal last summer. It involves 284 wells, 66 facilities and 82 pipelines in the southern Alberta foothills.

It came shortly after the regulator had promised a closer eye on such licence transfers to ensure purchasers are able to cover reclamation costs. At the time, Pieridae’s market value was less than the price of the Shell assets and its stock value was less than a dollar.

The number of energy facilities left unreclaimed by struggling producers has boomed in recent years. As of May 14, Alberta alone had more than 10,000 unreclaimed wells, pipelines, facilities and sites.

In April, the federal government pledged $1.7 billion for such so-called orphan wells in Saskatchewan, Alberta and British Columbia, although they are supposed to be reclaimed by an industry-funded group.

The energy regulator said the two companies were free to restructure their deal and try again to get the licence transfers approved.

This report by The Canadian Press was first published May 14, 2020.

oil and gas

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Town of Stettler sports fields close for improvements

The Turf Revitalization Plan has been expedited from the initial five-year strategy

UPDATE: Heartland Youth Centre has named the winners in this year’s fundraising raffle

Nan Gardner has won the grand prize of the 2020 GMC Terrain

Still no confirmed active COVID-19 cases in Red Deer, central zone

There are 15 new confirmed cases were in Alberta, the province said Thursday

It’s back to business at Stettler’s Superfluity

This year also marks organization’s 40th anniversary

Alberta RCMP remind citizens to create a nightly #9PMRoutine

‘We are using #9PMRoutine because of its popularity across the globe.’

Alberta Opposition calls on government to consult on provincial parks

Alberta Opposition calls on government to consult on provincial parks

Alberta overhauls real estate regulator in wake of prior dysfunctional board

Alberta overhauls real estate regulator in wake of prior dysfunctional board

Alberta registrar reverses rejection, man gets to have FREE AB licence plate

Alberta registrar reverses rejection, man gets to have FREE AB licence plate

Alberta imposing steep penalties but no charges on first-time impaired drivers

Alberta imposing steep penalties but no charges on first-time impaired drivers

No separate lockup for man beaten after arrest with police vehicle: Nunavut RCMP

No separate lockup for man beaten after arrest with police vehicle: Nunavut RCMP

Limit gun capacity to five bullets, victims group urges Trudeau government

Limit gun capacity to five bullets, victims group urges Trudeau government

RCMP say gunman behind mass killing in Nova Scotia was ‘injustice collector’

RCMP say gunman behind mass killing in Nova Scotia was ‘injustice collector’

Women’s group angered by ‘intoxication’ ruling but concern called overblown

Women’s group angered by ‘intoxication’ ruling but concern called overblown

Most Read