On October 24, 2012 the Government of Alberta (the Government) introduced Bill 2, the Responsible Energy Development Act. It will create a single provincial regulator for upstream energy resource activities. The proposed Alberta Energy Regulator (AER) will assume the functions of the Energy Resources Conservation Board (ERCB) and Alberta Environment and Sustainable Resource Development for oil, gas, oil sands and coal developments. The AER will be governed by a board of directors and is expected to be in operation by June 2013.
The Government also recently released a discussion paper with proposed changes to enhance the role of the province in consultation with First Nations.
These policy and legislative developments represent significant changes to Alberta’s regulatory and aboriginal affairs regime for energy resource projects. The Government of Alberta has signalled the establishment of new offices to deal with over-arching public policy issues (such as Aboriginal consultation and public interest issues). The AER will focus on hearing specific issues.
The Alberta Energy Regulator
The AER will be an arms-length agency of the Government. It is intended to provide a one-window approach for energy resource developments from initial application to reclamation. Government powers with respect to energy resource activities (under legislation specified in Bill 2) are to be carried out by the AER. These powers were previously split between the ERCB and Alberta Environment and Sustainable Resource Development. The Government can limit the powers of the AER through regulations (to retain Ministerial control of certain environmental assessments, for example).
Structure and process
A government-appointed board and CEO will be responsible for the general management of the AER. The Lieutenant Governor in Council shall appoint a roster of commissioners to preside at hearings. Board members and the CEO may not be appointed as hearing commissioners. Decisions of the AER may be reviewed on application by eligible persons, reconsidered by the AER in its own discretion or appealed to the Alberta Court of Appeal on questions of law or jurisdiction. Bill 2 provides for the voluntary registration of private surface agreements that can be enforced by the AER (without limiting other remedies available to landowners). The rules of the AER will undergo public consultation next year and we anticipate material changes from the rules and directives of its predecessors.
Unlike the ERCB, the AER will not be tasked with determining whether a particular project is in the public interest. The AER is also not intended to be responsible for fulfilling the Government’s duty to consult First Nations. The Government has indicated that over-arching public interest considerations will be handled by new government policy offices rather than through the AER hearing process.
The AER can order an individual or company to pay an administrative penalty if it does not comply with energy resource legislation or approvals (including Alberta Land Stewardship Act regional plans). The AER must provide notice of the administrative penalty and it may be enforced in the Court of Queen’s Bench. Penalties may not be issued more than two years after the date which the incident occurred or the date on which the incident first came to the notice of the AER—whichever is later. Future regulations will prescribe the amounts of administrative penalties. The Government has indicated that such fines will increase significantly.
The Government also recently released a discussion paper on First Nations Consultation. It is contemplating a number of changes to address concerns raised by First Nations, industry, municipal associations and other stakeholders through a recent consultation policy review (such as the delegation of certain procedural aspects of Aboriginal consultation to industry). Alberta will take a greater role in the consultation process by establishing a centralized Consultation Office to complement and oversee the adequacy of existing consultation units within Government. The Government will produce a Consultation Process Matrix to identify categories of impacts for specific activities and expectations for consultation. It is also proposing to enhance capacity funding through the First Nations Consultation Capacity Investment Program and to seek the compulsory disclosure of impact benefit agreements between First Nations and industry.
The proposed regulatory and Aboriginal consultation reforms mark an early but significant shift for the regulation of energy resource development projects in Alberta. The new single provincial regulator aims to streamline the regulation of upstream energy resource projects The Government intends to increase its policy capacity for broader public interest and Aboriginal consultation issues associated with these projects.