Alberta Energy Regulator in need of a total revamp
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.