On March 29, 2014, the Alberta Energy Regulator (AER) became the entity responsible for issuing approvals pursuant to the Environmental Protection and Enhancement Act (EPEA) for energy projects. However, the authority to direct environmental impact assessments (EIAs) for these projects, pursuant to the EPEA, remained with Alberta Environment and Sustainable Resource Development (ESRD). While the AER and ESRD work together to process energy development applications in a coordinated manner, the designated ESRD Director is currently charged with making decisions and managing the environmental assessment process pursuant to the EPEA.
Effective October 1, 2014, the AER will assume responsibility for the EIA process for energy resource activities (defined to include “any activity that may only be carried out under an approval issued under any energy resource enactment”). This jurisdiction over EIAs will apply to energy projects such as:
oil sands mines
commercial oil sands, heavy oil extraction and upgrading or processing plants “located within the site of an energy resource activity”
surface coal mines
sour gas processing plants
coal processing plants
large tailings dams
According to the legislative changes, ESRD will retain authority to direct EIAs for all oil refineries. With respect to oil sands or heavy oil upgrading or processing plants not associated with mineral recovery operations, there is some uncertainty as to whether the AER or ESRD will be responsible for the EIA process. This is because the construction and operation of these facilities are, by definition, “energy resource activities,” and thus must occur within the site of an energy resource activity. The lack of clarity arises from the inclusion of the qualifying phrase “located within the site of an energy resource activity” in the amended regulation, which suggests that not all of these facilities are intended to fall within AER jurisdiction for the purpose of overseeing the EIA process.
As of October 1, 2014, the AER will assume responsibility for new EIAs, and EIAs commenced after July 23, 2014 but not completed by October 1, 2014. EIAs commenced on or before July 23, 2014 will be continued and completed by the ESRD Director.
Implications for Resource Development
The transfer of responsibility for EIAs to the AER is a positive change for energy resource development projects. This change is expected to enhance regulatory efficiency and certainty by ensuring that the entity responsible for reviewing applications and associated EIAs will also manage the EIA process at the front-end. The AER has a mandate to ensure the safe, efficient, orderly and environmentally responsible development of hydrocarbon resources over their entire life cycle, and is thus the appropriate body to ensure that EIAs for energy projects are conducted appropriately. This transfer of responsibility will close what is viewed by some as a gap in Alberta’s “one window” approach to energy regulation. However, some uncertainty remains in relation to proposed stand-alone oil sands and heavy oil upgrading and processing plants. We expect that guidance from the AER will assist in clarifying these matters as the effective date approaches.