Alberta’s Energy Regulator Blasted for Conflicts, Mismanagement and Misusing Millions

It’s no surprise, say critics of agency responsible for regulating oil, gas and coal production.

Oil well
Critics of the energy regulator’s performance on issues like cleanup of abandoned well say that reports the agency was mismanaged are no surprise.

Three separate Alberta government investigations have slammed the controversial Alberta Energy Regulator for mismanagement, the misuse of millions of public dollars and conflict of interest.

Separate reports by Ethics Commissioner Marguerite Trussler, Public Interest Commissioner Marianne Ryan and Auditor General Doug Wylie detailed how senior members of the AER set up a private organization called the International Centre for Regulatory Excellence (ICORE), initially described as non-profit.

The centre’s original mandate was to promote “best in class” regulatory practices. But it later set out to become an international training centre for regulators.

Trussler was blunt and scathing in her report, saying the scheme was intended to benefit CEO Jim Ellis and three other AER employees. Ellis retired in November.

“The primary motivation behind ICORE Energy Services (NFP) was to create future employment or remuneration for Mr. Ellis,” Trussler reported. “He thus furthered his private interests.”

The auditor general found that ICORE consumed at least $5.4 million of AER funding between 2017 and 2019. Approximately $3.1 million has been recovered.

The auditor general’s report noted that about two years ago, AER staff started to worry about “time spent on non-Alberta regulatory activities, efforts to commercialize AER intellectual property, and the belief that some of the efforts were in pursuit of personal benefits by a few individuals.”

It concluded the regulator acted outside of its mandate, spent public money inappropriately and failed to prevent conflict of interest.

It also noted the “tone at the top at AER did not support a strong control environment or compliance with policies.”

Revelations by a whistleblower last year sparked the investigations.

The Alberta Energy Regulator, an industry funded agency responsible for regulating oil and gas activity and coal mining in the province — including oil sands development and fracking — has frequently been criticized for failing to provide proper oversight.

The reports described it as out of control and unaccountable, despite supposed government oversight.

“I found a culture at the senior management level at the Alberta Energy Regulator that promoted a wrongful manipulation and omission of facts designed to mislead both the board and the government,” Trussler reported. “I found those actions to mislead both troubling and unacceptable.”

Shaun Fluker, an associate University of Calgary law professor who has written extensively about the regulator, found the reports alarming but not surprising.

“It is troubling, to say the least, that the CEO of Alberta’s Energy Regulator can scheme to this extent — and for so long — about using public time and money for private gain with very little apparent concern about any of this ever being revealed,” said Fluker in an email to The Tyee.

“This raises serious questions about the extent to which there is any real ministerial or cabinet oversight over the operations of the AER,” he added.

The reports also cast doubt on the AER’s overall performance, Fluker added. MORE

CAAP lobbying of the Alberta Energy Regulator

Hundreds of pages of documents. Hundreds of dollars to access. And just about as many acronyms.

Earlier this year, The Narwhal’s readers ponied up the cash to access lobbying records from the Alberta Energy Regulator. Readers wanted to know what Canada’s largest oil lobby group, the Canadian Association of Petroleum Producers (CAPP), was up to at all those meetings, workshops, breakfasts and coffee dates at Second Cup.

Turns out, there’s a lot to talk about.

We found that the regulator is quietly projecting the number of inactive wells in the province will double by 2030.

Then we found the oil lobby was actively pushing for the decision to automate the approval of oil and gas wells — a move that CAPP said would result in 15-minute approvals.

And now, in the final instalment in this series (our Alberta reporter, Sharon J. Riley, will have screen-shaped eyes if she spends any more time on these documents), we’ve found CAPP is lobbying the regulator to “streamline” the public involvement process in many oil and gas projects.

In the documents, the oil lobby group laments that allowing the public to file statements of concern about proposed projects is the “Achilles heel” of the approval process.

Legal experts say the oil industry’s proposed changes will “come at the expense of everyday Albertans.”

Dive into the details of our investigation to read more about how oil lobbyists are proposing to reduce, or eliminate, public involvement in the review of oil and gas projects. MORE

CAPP seeks to limit public involvement in Alberta energy projects: lobbying records

Documents obtained by The Narwhal reveal numerous recommendations from the Canadian Association of Petroleum Producers to ‘streamline’ the process that allows Albertans to file concerns about proposed energy projects — a move experts say would come ‘at the expense of everyday Albertans’

Orphan well
Daryl Bennett, who was born and raised in Taber, Alta., is frustrated with orphan oil and gas infrastructure in his community. The Canadian Association of Petroleum Producers is seeking to limit or eliminate the ability for people to voice objections to energy projects that may affect them and their land. Photo: Theresa Tayler / The Narwhal

The Canadian Association of Petroleum Producers (CAPP), the self-described voice of the oil and gas industry, has laid out its vision for a “streamlined” public-involvement process in extensive lobbying records obtained by The Narwhal in a freedom of information request.

The lobbying records — obtained after readers of The Narwhal bellied up $643.95 to access them — span more than a year, and show CAPP’s input into key decisions made by the Alberta Energy Regulator.

The documents reveal that CAPP’s vision is one that would “expedite” aspects of public consultation — potentially reducing the opportunities for Albertans to voice objections to energy projects that affect them — and reduce the scope of projects that companies need to seek public input on.

Landowners and affected Albertans receive notice of new oil and gas developments that may directly and adversely affect them — whether it’s an oil or gas well, a pipeline, an oilsands development or another energy project. They can then file what’s known as a statement of concern if they are worried that the project will affect them or the local environment.

The lobbying records make it clear that industry is seeking to speed up or eliminate that process for some projects.

In one document, CAPP and other industry representatives denounced the statement of concern process as the “Achilles heel” of energy project approvals.

In another, CAPP laments that, when it comes to brownfield oilsands projects, “several [regulator] procedures that involve giving notice to the public regarding industry activities are leading to delays, as well as criticism of the industry.” (“Brownfield” refers to land where other industrial activities have previously taken place.)

And so CAPP is lobbying the regulator to “streamline” the process and reduce or eliminate the opportunity for the public to be involved in some cases — that could include shortening the 30-day period that stakeholders can file a statement of concern for some types of projects, or increasing the regulator’s use of discretion in posting public notice at all. MORE

15-minute approvals: Alberta plans to automate licences for new oil and gas drilling

“We’ve seen the announcements about fast-tracking [licences] and saving money, but where are the systems that incorporate the science and data into these automated decisions, which they’ve promised for years?” — Nikki Way, a senior analyst with the Pembina Institute

Pumpjacks Alberta wheatfield
Under a new system, the Alberta Energy Regulator will approve the vast majority of applications to drill for oil and gas within minutes via an automated process, according to documents obtained by The Narwhal. Photo: Shutterstock

Lobbying records obtained by The Narwhal show that as Alberta’s new government has pledged a ‘rapid acceleration of approvals,’ the province’s energy regulator has been moving ahead with plans that mean the vast majority of new wells will be approved by a computer in a matter of minutes

The Alberta Energy Regulator confirmed to The Narwhal by e-mail that it expects to begin implementing automated approval for routine well licences later this year, though lobbying records indicate the system could be rolled out as early as next month.

With the change, staff will no longer review most applications from companies seeking to drill a new oil or gas well.

In lobbying records obtained by The Narwhal through a freedom of information request, Richard Wong, manager of operations with the Canadian Association of Petroleum Producers (CAPP), said the association anticipates 90 per cent of routine well applications could soon be automatically approved by OneStop, the online tool used to submit requests for permits and licences to the Alberta Energy Regulator.

The Narwhal was charged $643.95 by the Alberta Energy Regulator — an industry-funded corporation in charge of overseeing Alberta’s energy industry — to access the documents. The fee was paid by readers who donated specifically to cover these costs.

When asked for details, CAPP told The Narwhal by email that these approvals refer to applications that are “anticipated to be low-risk and, as such, the approval of each of those applications would be expedited.”

Over the past year, concerns have been raised about industry’s ability to pay for the cleanup of the hundreds of thousands of wells already drilled in the province, with internal estimates pegging the bill at $100 billion. MORE


Wildly Underestimated Oilsands Emissions Latest Blow to Alberta’s Dubious Climate Claims

This blows out of the water any notion any idea that the Trudeau government is a ‘climate leader’ responding to the climate emergency in a robust fashion, protecting Canadians and the planet. Neoliberal governments protect corporations and investors’ profits before consideration of the public’s clear wish for robust action on climate change. Write to parliamentarians and voice your anger.

As disaster looms, petro province lets industry call the shots.

Whether or not the rest of the oil patch has as wretched a record of accuracy remains to be seen, but the missing 17 megatonnes thus far unearthed are enormous — equivalent to the entire carbon output of Toronto or Seattle.’ Photo by jasonwoodhead23, Creative Commons licensed.

Trust us. That has long been the message from the oil sector to the Alberta public, which seems to have little choice in the matter.

In a bizarre arrangement, the Alberta oil patch pays for its own oversight through the Alberta Energy Regulator — a regulatory body 100-per-cent funded by the fossil fuel sector. What could go wrong?

The latest boondoggle was revealed by an Environment Canada study published in the prestigious journal Nature Communications. It showed the methodology that energy companies have used for years to calculate carbon dioxide and methane emissions from oilsands surface mining operations underestimated contributions to global warming by a whopping 64 per cent.

This eye-popping number was the result of airborne sampling over four of the largest bitumen mines in 2013 to test the accuracy of the industry’s self-reporting methods. The company figures are based on “bottom-up” calculations using the measured amount of fuels consumed in their operations. The “top-down” sampling by Environment Canada was based on actual measurements of carbon dioxide levels collected over these projects.

…Similar airborne sampling by Carleton University researchers in 2017 assessed methane leaks from Alberta oil and gas operations and found that overall emissions were “likely at least 25 to 50 per cent greater than current government estimates.”

The oil industry enjoys a special deference from the mainstream media and regulators, so it is not surprising that the Environment Canada findings weren’t extrapolated to the rest of the bitumen industry. MORE

Alberta issues 97% of reclamation certificates without ever visiting oil and gas sites

Alberta oil well
Workers at an orphaned oil well in Alberta, which must be sealed and remediated before being issued a reclamation certificate. Photo: Government of Alberta / Flickr

Documents obtained by The Narwhal reveal that, for the last four years data is available, 2014 – 2018, less than three per cent of oil and gas sites certified as reclaimed have been visited by an inspector from the provincial regulator — a far cry from the 15 per cent the public has been long told.

The data — accessed through a lengthy back-and-forth with the Alberta Energy Regulator’s media team and freedom of information office — shows that since the spring of 2014, more than 9,400 reclamation certificates have been issued, but during that same time period, just 277 sites were actually visited by the regulator for an audit.

This means the vast majority of oil and gas sites are certified as reclaimed without any independent physical assessment by the regulator — and most reclamation certificates are granted by an automated system.

This wasn’t always the plan. MORE