Al­berta En­ergy Reg­u­la­tor in need of a to­tal re­vamp

Edmonton Sun - - COMMENT -

The judg­ment was un­equiv­o­cal, dev­as­tat­ing and unan­i­mous. On Fri­day, Al­berta’s three in­de­pen­dent, leg­isla­tive in­ves­ti­ga­tors agreed: Jim El­lis, the former CEO of the Al­berta En­ergy Reg­u­la­tor (AER), shat­tered ethics rules and “grossly mis­man­aged” public funds and as­sets be­fore his res­ig­na­tion this past Jan­uary. The provin­cial au­di­tor gen­eral, ethics com­mis­sioner and public in­ter­est com­mis­sioner all found (in sep­a­rate in­ves­ti­ga­tions) that at El­lis’s di­rec­tion, the AER im­prop­erly es­tab­lished a not-for-profit sub­sidiary – the In­ter­na­tional Cen­tre of Reg­u­la­tory Ex­cel­lence (ICORE) – to train en­ergy reg­u­la­tors from else­where in the world on the “best prac­tices” of en­ergy and en­vi­ron­men­tal reg­u­la­tion, which was be­yond the AER’S man­date. El­lis then had the AER lend ICORE more than $5 mil­lion, nearly $2.7 mil­lion of which was never re­paid. He im­prop­erly ex­pensed trips he was mak­ing on ICORE busi­ness back to the AER and sec­onded as many as 50 AER em­ploy­ees to work on ICORE tasks at AER ex­pense – all within a “cul­ture of fear” that dis­cour­aged AER em­ploy­ees from ob­ject­ing to or re­port­ing the trans­gres­sions. The en­tire scheme, ethics com­mis­sioner Mar­guerite Trus­sler con­cluded, was “to pro­vide fu­ture em­ploy­ment for Mr. El­lis and oth­ers.” Put sim­ply, El­lis cre­ated ICORE with­out proper au­thor­ity to do so. Then funded it over the ob­jec­tions of the AER’S le­gal coun­sel and im­prop­erly used AER money (which comes from levies on oil com­pa­nies) all so he and a few hand­picked AER em­ploy­ees would have a place to work that per­mit­ted them to jet around the world af­ter they left the reg­u­la­tor. It’s easy to see that the new UCP gov­ern­ment was right to fire the en­tire AER board last month and call for an in­ves­ti­ga­tion into its en­tire oper­a­tion, most specif­i­cally the in­creas­ing length of time it takes to win ap­proval for new en­ergy projects. Clearly part of the prob­lem with in­creas­ing lag time for AER ap­provals is philo­soph­i­cal. Un­der the former NDP gov­ern­ment, ap­prov­ing new wells and oil­sands de­vel­op­ments was way down the AER’S list of pri­or­i­ties. The en­vi­ron­ment and so­cial jus­tice goals came be­fore the econ­omy. That in it­self would have been rea­son enough to give the reg­u­la­tor a to­tal shakeup from top to bot­tom. But now it’s fair to spec­u­late the AER was also slow be­cause so much of its em­ploy­ees’ time and en­ergy was taken up feath­erbed­ding El­lis’s pro­posed soft, post-re­tire­ment land­ing pad. It is un­likely the AER is rot­ten to the core. It was, af­ter all, AER em­ploy­ees who made the ini­tial com­plaints of mis­con­duct to the public in­ter­est com­mis­sioner, and AER in­sid­ers aided all three in­ves­ti­ga­tions. How­ever, in re­cent years – first un­der red Tory Pre­mier Ali­son Red­ford and then un­der the NDP – the AER has lost sight of its man­date, which is to en­sure the de­vel­op­ment of Al­berta’s en­ergy re­sources in a re­spon­si­ble, en­vi­ron­men­tally sound man­ner. Be­fore the El­lis find­ings, the AER had, among other con­tro­ver­sies, been caught pay­ing ex­ec­u­tives to com­mute by air from B.C. and had over­es­ti­mated (by about four-fold) the cost of clean­ing up aban­don oil wells. The lat­ter con­tro­versy scared off in­vestors afraid they would be sad­dled with bil­lions in added ex­penses. The El­lis find­ings are just fur­ther proof the AER needs a to­tal re­vamp.

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