New Alberta Energy Regulator will take on role as environmental enforcer

By Sheila Pratt, Edmonton Journal May 1, 2013

EDMONTON – If hundreds of ducks die on a tailings pond or a pipeline bursts, Alberta Environment won’t be investigating or be involved in any charges against oil companies.

Those powers — to investigate spills and infractions, and apply penalties — move to an arm’s-length agency, the new Alberta Energy Regulator, a body run by cabinet appointees reporting to the minister of energy and mostly paid for by the industry.

The AER is expected to be operating by June.

Energy Minister Ken Hughes said he’s confident the new AER will take on its new role as environmental enforcer role with vigour. To assist in that, the government recently increased fines for polluters up to $500,000, he said.

“Our commitment to environmental standards is not weakened one bit” under the new regulator, said Hughes. “What we’re creating is an entirely new regulator, not just a reboot of the (Energy Resources Conservation Board).”

The new board, yet to be appointed, has an obligation to take on this role appropriately, he added.

But critics are worried that environmental protection will take a back seat to the agency’s other role advancing the oil, gas and coal industries.

New Democratic environment critic Rachel Notley said the ERCB rarely, if ever, laid charges and has a weak enforcement record.

For instance, the ERCB set up Directive 74 requiring companies to shrink the size of toxic tailings ponds, but then exempted seven of nine projects from the new regulations, she noted.

“Environment protection is already subordinate to development issues and the new agency is the ERCB on steroids,” she said.

The energy industry pushed for the single regulator which will issue all approval permits required by environment laws, rather than having the environment department share that job.

Under the old system, it was the responsibility of the environment department to build a case to lay charges and take it to Crown prosecutors for a final decision, noted Notley.

In the new system, the energy regulator will be the gatekeeper on whether charges are recommended to the justice department and that’s a concern, said Notley, especially as the AER is headed by a former oilpatch insider Gerry Protti, a founding member of industry lobby group the Canadian Association of Petroleum Producers.

But Hughes disagreed, saying “people should have confidence” in the new agency. The CEO working under Protti is Jim Ellis, a former deputy of both the energy and environment department, so “he has seen the balance” that’s needed between the “two sides of the same coin — the economy and the environment.”

University of Calgary law professor Shaun Fluker said it’s too soon say whether there will be fewer charges laid or weaker enforcement of environmental laws under the new regulator.

“On the face of it, there could be problems, but that could all be alleviated by a separation of the two functions (issuing approval permits and enforcement of the law),” said Fluker, adding he’s waiting to see regulation under the Responsible Energy Development Act, or Bill 2, which sets up the new regulator.

But Hughes said the point of the new regulator is to have “one coherent approach” to energy development “that will provide more certainty about the rules of the road of regulator, environmental groups and landowners.”

Ecojustice lawyer Melissa Gorrie said it’s important that the new regulator acquire the expertise and independence of investigators in the environment department, but that’s not yet known. “We don’t want industry-led investigations.”

She also called on the government to release draft regulations on investigations. “Right now, it’s all in a black box.”

Hughes could not say whether Alberta Environment investigators would move over to the new regulator. “That depends on the AER’s needs.”

But it would be “inappropriate” if the board of the AER hired industry investigators to look into spills or other incidents, he added.

Albertans should realize the new regulator is operating in “an entirely new policy context” for the energy industry, he noted, including the new Policy Management Office. This office will co-ordinate discussions between the energy and environment departments on policy issues, he added. Those policies will guide the regulator.

Alberta Environment declined to comment whether any or all if its seasoned investigators will move over to the new regulator.

The new energy regulator will enforce six pieces of legislation, including the Water Act, the Environment Enhancement and Protection Act, for the energy industry only — though it will likely take a year to complete the transition into the new job as chief environmental enforcer.

About 900 people, including more than 600 in Calgary, are employed by the energy regulator and that number will go up. The ERCB announced this week fees charged to the energy industry will jump by 36 per cent and are expected to rise again in June when the AER takes on the environment job.

The environment department will continue to be the investigator and enforcer in other industrial activities such as gravel operations.

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