The Alberta Energy Regulator oversees energy development in the provinvce. This body ensures companies follow the rules for energy development projects, so that Albertans can count on safe and responsible energy development.
This article covers what the Alberta Energy Regulator does, its rights and duties, and how its actions can impact energy companies. For topics not discussed here, you may consult with an energy lawyer.
Who regulates the energy sector in Alberta?
The regulation of Alberta's energy industry involves several bodies, including the Alberta Utilities Commission (AUC) and the Alberta Energy Regulator (AER). While the AUC regulates electricity and gas rates, the AER regulates the development of oil, gas, and coal.
These two operate alongside federal regulators, including the Canada Energy Regulator (CER) and the Environment and Climate Change Canada (ECCC). Although their roles may seem to overlap, they still have distinct responsibilities for different aspects of an energy development project.
What is the Alberta Energy Regulator?
Established in 2013 under the Responsible Energy Development Act (REDA), the AER is the main regulator for the development of energy resources in the province. These include energy development projects and activities for upstream oil, gas, oil sands, and coal. The AER's oversight covers projects from initial application through decommissioning and reclamation.
Watch this video to learn more about the AER:
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What does the Alberta Energy Regulator do?
As Alberta's lead agency for energy development projects, the AER serves these functions as specified by the law:
- administering provincial laws: aside from the REDA, the AER administers the Public Lands Act, the Environmental Protection and Enhancement Act, and the Water Act and Mines and Minerals Act
- as an independent body: the REDA defines the AER's corporate, operational, and governance responsibilities, allowing it to operate separately from the government
- as a quasi-judicial agency: under the REDA, the AER has adjudicative functions throughout the life of an energy development project, (e.g., conducting hearings for applications and resolving disputes)
- regulating energy infrastructure: the AER regulates the infrastructure that produces, mines, processes, and transports energy resources, from the plant to the market (e.g., pipelines, processing plants)
- take legal action: the AER can take legal action against energy companies, as in the case of Orphan Well Association v. Grant Thornton Ltd., 2019 SCC 5, which clarified clean-up responsibilities for bankrupt companies
Watch this video to learn about how the Alberta Energy Regulator oversees pipelines within the province:
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Sectors regulated by the AER
The REDA and other Alberta laws specify the resources or energy development projects that the AER can regulate, such as:
- coal
- bitumen
- geothermal energy
- natural gas
- oil
- oil sands
- rock- and brine-hosted minerals
AER's regulatory powers include the infrastructure that these resources or projects have built or are using, until they're decommissioned, and the land is eventually restored.
Sectors outside AER jurisdiction
Certain resources, projects, or aspects of energy development fall outside the Alberta Energy Regulator's scope and are governed by other energy regulators. These resources or projects include:
- gasoline or other refined petroleum products
- oil and gas pipelines that cross provincial or international borders
- generation or distribution of electricity and renewable energies
- the price of natural gas
- gas utility pipelines
Regulation activities of the AER
The AER conducts several regulatory activities and mandates from the REDA and other laws. Here are some of the ways that the Alberta Energy Regulator governs the energy projects in the province:
- processing of applications: the AER processes and reviews applications for new energy development projects, including requests to access a parcel of land, to drill a well, or to build a pipeline
- inspections and audits: the AER monitors facilities involved in energy development projects (e.g., energy dams) through site inspections and audits; investigations may also be conducted when an incident and non-compliance occur
- emergency management: the AER responds to incidents (e.g., energy-related emergencies); the AER may also issue orders not just to correct cases of actual non-compliance, but also to prevent future incidents
- hearings and adjudications: applications, regulatory appeals, and reconsiderations can be referred by the AER to undergo hearings conducted by the Hearing Commissioners through any of the alternative dispute resolution (ADR) process or a court-like process
- closure and clean up: companies can refer to the directives issued by the AER on their responsibilities and liabilities when closing and cleaning up their energy development infrastructure
- statements of concerns: the public can submit a statement of concern to the AER if they are adversely affected by an energy development project during the application process or anytime during the lifetime of the project
- enforcement tools: the AER has several enforcement tools that it can use depending on the severity of the company's non-compliance, such as sending a notice or warning, issuing orders against the company, imposition of administrative sanctions and fees, or filing a case in court against the company
Whether you're an energy company or a concerned citizen, you can ask for the help of an energy lawyer or firm in dealing with all these things before the AER.
Funding of the AER
One thing that separates the AER from most other regulators is that it is fully funded by the energy industry, and not by the government. It does this through the funds it collects from entities, such as:
- administration fees
- government grants
- proceeds from product sales
Administration fees are paid by those who are transacting with the Alberta Energy Regulator. These fees account for the bulk of AER's revenues.
AER and the Government of Alberta
Although the AER is part of the system of regulating the energy and natural resources of Alberta, it is still independent from the Government of Alberta. Aside from not receiving government funding, the AER is free to make decisions within the powers granted by law. Further, the REDA specifically provides that the AER is not an agent of the Crown.
Who is the head of the Alberta Energy Regulator?
Much like a corporation established by law, AER's organizational structure, including its powers and officers, is established by the REDA. The AER is led by its chief executive officer (CEO). The CEO handles AER's day-to-day operations and government engagement. The CEO works with a team of experts in areas like engineering, law, and environmental science. The current CEO is Rob Morgan, pictured below.
The AER also has a board of directors, composed of a chairperson and at least two members, as stated in the REDA. While the board does not make decisions about specific energy projects, it focuses on strategic planning and ensures that the AER follows the rules set by the Alberta government.
The CEO reports to the board of directors. The board, in turn, is accountable to the Alberta Minister of Energy. This structure helps keep the AER independent when making regulatory decisions, but still responsible to the public and the government.
Other key personnel of the AER
Inside the AER, there are different divisions that handle different responsibilities. Here are the other offices or officers in the AER that energy companies should know of:
- Hearing Commissioners: these are officers who are tasked to perform AER's adjudicative functions, (e.g., deciding cases on applications and regulatory appeals and facilitating ADR processes); their decisions can be appealed to the Court of Appeal of Alberta
- Operations Division: a division within the AER made up of different branches, which help review proposals for new energy resource development projects, including overseeing that these projects follow the law from design up to decommissioning
The Alberta Energy Regulator: Role and impact
The Alberta Energy Regulator is a guide for energy companies and the public alike. Its work shapes how the province's energy resources are used, how the land is managed, and more importantly, how communities are kept safe.
As Alberta's energy industry flourishes, the regulator's role continues to develop. For more details or legal advice, consult an energy lawyer.
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