On October 24, 2012, Bill 2, Responsible Energy Development
Act ("Bill 2"), received first reading in the
Alberta Legislature.1 If passed, Bill 2 will create a
single provincial regulator for upstream oil, gas, oil sands and
coal development ("Energy Developments"), which had been
one of 6 recommendations made by the Regulatory Enhancement Task
Force (the "Task Force") in its December 2010 report.
HIGHIGHTS OF BILL 2
Under Bill 2, a single regulator, the Alberta Energy Regulator
(the "Regulator"), will assume the Energy Development
regulatory functions currently administered by the Energy Resources
Conservation Board, and Alberta Environment and Sustainable
The mandate of the Regulator will be to provide for the
efficient, safe, orderly and environmentally responsible
development of Energy Developments in Alberta, and to regulate the
disposition and management of public lands, the protection of the
environment, and the conservation and management of water,
including the wise allocation and use of water. This mandate will
be carried out in accordance with specified legislation, including
the Oil and Gas Conservation Act, the Oil Sands
Conservation Act, the Pipeline Act, the Public
Lands Act, the Environmental Protection and Enhancement
Act ("EPEA") and the Water Act.
Under Bill 2, a regulatory review will be available for
specified decisions of the Regulator. Additionally, the Regulator
may, in its sole discretion, reconsider a decision made by it and
may confirm, vary, suspend or revoke the decision which, subject to
the yet to be passed regulations, may be made with or without
conducting a hearing. As well, a decision of the Regulator is, with
leave, appealable to the Court of Appeal on a question of
jurisdiction or law. Under section 25 of Bill 2, all appeals under
the EPEA and the Water Act will be to the Court
of Appeal and not to the Environmental Appeals Board.
According to the Government's News Release, the arms-length
single Regulator will be operational by June 2013, which is
consistent with the timing previously announced by the Alberta
ENVIRONMENTAL RESPONSIBILITY v. RESOURCE DEVELOPMENT
In terms of the balance between environmental responsibility and
resource development, Environment and Sustainable Resource
Development Minister Diana McQueen has stated that "[a]s we
grow, we must continue to find the right balance between
environmental management and resource development to ensure Alberta
and Canada remain global leaders on both fronts" and that
"[t]hrough this regulator, we are taking a new approach to how
we develop our energy resource while maintaining our strong
It is claimed that under Bill 2, the single Regulator will be
able to provide an important balance to the environment, since it
will have the ability to assess higher fines than before, penalties
and fines will be aligned across statutes, the courts will also
have increased fines at their disposal for companies which are not
operating in accordance with agreements, and the environmental
legislation will remain as stringent as it was
It remains to be seen how effectively the seemingly competing
objectives of environmental responsibility and resource development
are co-managed, and whether criticisms will be legitimized which
have suggested that the implementation of a single Regulator may
remove some environmental checks and balances and shift the role of
the Regulator to one of simply permitting.
Bill 2 is one of several initiatives recently undertaken in
furtherance of the Province's plan to manage its resources in
an integrated manner. These, combined with the concurrent federal
streamlining initiatives and other legislative reforms, have
resulted in significant and sweeping regulatory reform which,
arguably, is unprecedented in Alberta's Energy Development
1 On November 5, 2012, Bill 2 passed second reading and,
as of the date of this article, is currently awaiting third
2 Alberta Government News Release "Albertans to
benefit from a more efficient, effective regulatory system"
(24 October 2012), at page 1.
3 Alberta Government Backgrounder,
"Responsible Energy Development Act charts new territory"
(24 October 2012), at page 1.
Directors and their corporations may be at a loss to understand what they must do to minimize their risk of environmental liability in light of the recent Ontario Ministry of Environment order and settlement agreement concerning Northstar Canada.
In the aftermath of the Northstar case, it is more important than ever for directors and officers to manage environmental issues proactively and implement policies to help minimize their risk exposure.