NDP EYES REGULATOR SPLIT
Notley to order review of province’s oilpatch oversight
The NDP government will review the “conflicting mandate” of the province’s oilpatch watchdog with a view to separating its responsibility to both promote and police energy development, says Premier Rachel Notley.
“One of the concerns that I have always had with the Alberta Energy Regulator is that it appears to have a conflicting mandate, in that it is both a promoter of energy and the primary vehicle of environmental protection in Alberta,” Notley said in an interview.
“What’s troubling about the AER is it has actually taken over responsibility for most of the environmental protection and monitoring part and standards development within the energy sector ... You can’t do that job when your overarching mandate is to promote energy development.”
Notley said Friday she thinks those mandates have to be “split.”
The premier’s comments come as the new NDP government is in the midst of several major policy initiatives affecting the province’s energy sector, including a review of royalty rates, a new climate change strategy, higher corporate taxes and a promise to ban natural gas drilling in urban areas.
The Progressive Conservatives established the AER in December 2012 to provide one- stop shopping for regulatory approvals after industry complained about the delays and costs of red tape.
The legislation combined duties of the Energy Resources Conservation Board with responsibilities of Alberta Environment and Sustainable Resource Development to create a single entity to administer the Public Lands Act, the Environmental Protection and Enhancement Act and the Water Act.
Notley said notwithstanding that there are “good people” working on the environmental files, the agency needs a mandate that “allows for a clear plan of action in every situation.”
In the past, she has been harshly critical of the PC government’s decision to appoint former oilpatch executive Gerry Protti to head the AER. Notley said two years ago she was appalled at the appointment of an industry insider to head the agency.
Response to her suggestion to split the AER was mixed Monday.
Gary Leach, president of the Explorers and Producers Association of Canada, rejected the contention the AER promotes energy development.
“The AER is looked to by many jurisdictions in North America and around the world as a leading regulator for energy projects,” Leach said in an email.
“The primary role of the AER ... is focused on environmental protection, public safety and resource conservation — not the promotion of energy development.”
Leach said the AER has taken on some regulatory functions formerly residing at other government departments to facilitate full life cycle oversight of energy projects “from conception through operations to final decommissioning and reclamation.”
“We think this provides better and closer oversight of energy projects in Alberta with a view to protecting the public interest.”
But Bill Andrew, CEO of Long Run Exploration, said there will be support within the oilpatch for splitting up AER’s functions because the current regulator has too much on its plate.
“The system works very well but … when I was younger, I felt there was a much more hands- on ERCB and they would interact with you a hell of a lot more and try to really steer you forcibly in the right path,” said the industry veteran.
Mike Hudema, Greenpeace energy campaigner, said the AER has “long been a broken agency” that has failed in its duty to protect Alberta’s environment and communities.
“We commend the premier for being willing to look at its mandate and hopefully reform this body into one that can instil trust, provide transparency and ensure the safety of our environment and communities,” Hudema said in an email.
“It won’t be an easy fix, but is a necessary one.”
But Wildrose energy critic Leela Aheer said it would be “a huge mistake” to chop up the AER when it is just getting over “serious growing pains.”
“This will seriously promote instability in the sector,” said the Chestermere-Rocky View MLA.