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