End of hydrocarbon activities contested | A round for oil and gas companies

Oil and gas companies contesting the end of hydrocarbon exploration and exploitation in Quebec will not have to permanently close, for the moment, wells that have been drilled. The Superior Court of Quebec temporarily suspends nearly 40 articles of the law adopted in 2022 by the Legault government.

Otherwise, the 12 plaintiffs in this case would suffer “serious or irreparable harm”, judges Judge Philippe Cantin, in a decision rendered on January 25. The magistrate explains that he will decide in this way while the case is heard on its merits.

“There is no proof that the plaintiffs’ wells currently present any problem that poses a risk to the environment or the protection of the public,” writes Judge Cantin in his decision.

In force since August 2022, the Law putting an end to the search for hydrocarbons or underground reservoirs, the production of hydrocarbons and the exploitation of brine came to draw a line under this sector in the province, providing in passing compensation to the tune of 100 million for the industry. The plaintiffs — a group that includes Utica Resources — say they hold 101 licenses across Quebec and own 54 wells.

According to the law, license holders had to carry out the “permanent closure” of the drilled pits in addition to carrying out the “restoration of the sites”. Companies have turned to the courts to challenge the law. They requested a suspension of the application of certain provisions by evoking the scenario of “irreparable harm”.

They gave as an example the obligation to permanently close their wells.

“This will cause them considerable costs,” they argue. If they were successful on the merits of the dispute, the plaintiffs would be forced to pay additional sums to re-drill or reopen wells that they would have been forced to close in the absence of a stay. »

The judge notes that the objective of the Legault government’s law was to have all wells closed by 2027. The magistrate concedes that there could be delays if several years pass before a court decision on the bottom, which, in his opinion, should occur in 2027.

“This inconvenience, in the current situation of the wells, is however less than those that the plaintiffs would have to suffer if they had to reopen their wells or drill new ones,” underlines Judge Cantin.

If the plaintiffs were temporarily successful in their case, they are not completely relieved of their obligations. The judge orders them to continue maintaining their well as was done under the Hydrocarbons Act. Inspections will also have to continue.

The law adopted by Quebec in 2022 prompted oil and gas companies to turn to the courts in order to obtain compensation. At the time, Utica Resources notably indicated that, failing to obtain the nullity of the law, it intended to claim compensation of 18 billion.