The Alberta Energy Regulator (AER) is the regulatory organization established under the 2012 Responsible Energy Development Act. Under the Act the AER is charged with “the safe, efficient, orderly, and environmentally responsible development of hydrocarbon resources over their entire life cycle” within the province of Alberta. The AER was created to centralize and simplify the regulatory structure around oil and gas development, consolidating enforcement of the energy development aspects of the Water Act, the Public Lands Act, The Mines and Minerals Act and the Environmental Protection Enhancement Act. The current Chair of the board of directors is former executive officer of the Encana Corporation Gerry Protti, and the Chief Executive Officer, is former Executive Director of the Alberta Environment Support and Emergency Response Team, Jim Ellis.
According to its own data the AER is responsible for regulating the world’s largest reserves of hydrocarbons as well as the infrastructure associated with these resources including pipelines wells and processing facilities. In order to ensure the development of these resources is carried out safely and in accordance with existing regulations, the AER is empowered to review proposed energy developments, inspect and oversee energy projects at all stages of their life cycle, penalize non-compliance, and hold public hearings on proposed oil and gas projects.
Under the Responsible Energy Development Act, the AER has the authority to oversee all energy related applications for development made under the Environmental Protection and Enhancement Act, the Water Act, the Public Lands Act, and the Mines and Minerals Act. As the single energy regulator the AER is authorised to regularly inspect oil and gas developments, and utilize enforcement mechanisms to ensure regulatory compliance.
The AER is also responsible for responding to concerns from landowners, and other stakeholders including first nations. Where statements of complaint have been issued by stakeholders regarding a proposed energy development the AER is authorized to hold a public hearing conducted by a panel of AER hearing commissioners. The hearing determines whether complainants “rights might be directly and adversely affected by an application” and have the capacity to withhold or revoke a development application. Additionally, the AER manages the Alternative Dispute Resolution (ADR) which is intended to resolve disputes between members of the public and oil and gas companies, or between two or more oil and gas companies by providing mediation and arbitration services.
As the primary regulatory agency for energy development in Alberta, the AER is empowered by the Responsible Energy Development Act to inspect oil and gas projects and penalize non-compliance to regulations through fines site closures, and other measures. Furthermore, because the AER is responsible for investigating and ensuring regulatory compliance at all stages of energy development, the organization undertakes inspection and enforcement during exploration, facility construction, operation and decommissioning.
The AER has adopted an escalating system of enforcement mechanisms to compel compliance. Specifically the AER is authorized to issue warning letters, suspend licenses, or issue orders to restrict specific practices or correct particular issues. Additionally, a suite of punitive enforcement tools are available to the Regulator including administrative penalties (fines), prosecution, restriction of operations, and the closure of an operation until full compliance is demonstrated.
The governance structure of the AER is divided into an adjudicative branch responsible for conducting hearings on development applications, and providing technical advice to support regulatory change, and a Corporate Branch which is responsible for all other aspects of the AER’s mandate.
The corporate branch of the AER is governed by a board of directors responsible for determining organizational policy and setting performance expectations, and as well as an executive responsible for administering the day-to-day operations of the AER. The board of directors is appointed by Lieutenant governor in Council. The board is made up of eight directors including the chair. The Executive of the AER is headed by the Chief executive Officer who reports directly to the board, and is responsible for overseeing day to day operations. currently the CEO is appointed by the Lieutenant governor in Council with the recommendation of the chair of the board. The current board of directors chairperson is former executive officer of the Encana Corporation Gerry Protti. The AER’s current Chief Executive Officer, is former Executive Director of the Alberta Environment Support and Emergency Response Team, Jim Ellis.
The Adjudicative branch of the AER is made up of hearing commissioners, who report to a chief commissioner. These commissioners are responsible for conducting hearings on applications and regulatory appeals. A key feature of the adjudicative branch is its independence from other officials within the AER or other departments of the Government of Alberta, its decisions may only be reviewed by the Court of Appeal of Alberta. the current chief commissioner of the AER is Alex Bolton, a former member of the Energy Resources Conservation Board.
Similar, to other North American regulatory agencies such as the BC Oil and Gas Commission and the Alberta Utilities Commission, the AER is funded exclusively by mandatory payments from the industry. The AER proposes budgets, which are subject to review by the Government of Alberta. Once budgets are approved, the Responsible Energy Development Act authorizes the AER to levy administrative fees on operators in order to fund its operations.