Canada: Separation Anxiety – Is A Divided Alberta Energy Regulator Around The Corner?

Premier Notley is set to review the Alberta Energy Regulator's (AER) mandate.  Her government is undertaking an ambitious and comprehensive examination of Alberta's energy regulatory framework.  This includes a potential split of the AER.  A new policy direction is expected which will address the Premier's concerns about the AER's role as both "a promoter of energy and the primary vehicle of environmental protection" in Alberta.1

Changes to the scope of the AER and its predecessors have a long history in Alberta.  Proposals for a "one-window" regulatory approval system span well over a decade.  On December 10, 2012, the Responsible Energy Development Act (REDA) – legislation that created a single regulator – received Royal Assent.  The AER become operational in June, 2013.  It assumed the energy development regulatory functions previously administered by the Energy Resources Conservation Board, and Alberta Environment and Sustainable Resource Development.  These span project application to reclamation.  Reorganization was operationally completed in 2015.

The changes under REDA responded to complaints of inconsistencies and overly complicated and duplicative processes for resource development projects.  REDA established a "one-stop" approval process.  Moreover, REDA was enacted in response to province's Regulatory Enhancement Project (REP) and related recommendations that a single regulator be created.  REDA – as well as federal legislation of the same era, including procedural streamlining amendments to the National Energy Board Act – were in large measure an attempt to reduce the time and expense required to obtain regulatory approvals, and to make the Canadian energy industry more competitive globally.

One intent of REDA is to ensure that the oil and gas policy development function would rest with the provincial government, specifically Alberta Energy, and Alberta Environment and Parks (formerly, Alberta Environment and Sustainable Resource Development). Section 67 of REDA allows the Energy Minister to direct the AER's priorities.2 Policy assurance – the achievement of policy outcomes set by the government – is undertaken by the AER as regulator.  The interface between the government and the AER is the Policy Management Office, which was originally proposed under the REP to: (i) facilitate policy integration and communication; (ii) ensure a common risk management approach; and (iii) support a coordinated approach to public engagement. Furthermore, the AER's corporate structure under REDA separates its governance from its regulatory function.

A chief criticism of REDA – although not one voiced by the new government – is that it reduced the independence of the AER from government.  Over-arching public interest considerations are now handled by the provincial government, rather than through the AER hearing process.  Operationally, it has been clear that Alberta Energy drives policy.  All of this represents significant change from what was previously an independent provincial energy regulator.  If the Premier or her Energy Minister wishes to effect further change to the mandate of the AER, it need not necessarily be split.  Rather, the regulator could be provided new policy direction pursuant to section 67 of REDA.   

Given its short period of time since its implementation, it is not yet clear whether the potential for government influence on decision making by the AER has detracted from regulatory certainty, resulting in global investment dollars going elsewhere.  Independent, arms-length, science-based decision making by Alberta's energy regulator, which has historically been the norm in Alberta, has generally been viewed by global investors as an attractive feature of Alberta's oil and gas landscape, to the extent that regulatory outcomes may be more predictable and objective.  That said, decision-making based on policy administered by the government, so long as it is well-defined and consistently applied, may actually add to regulatory certainty, thereby enhancing investment potential.

The AER's stated mandate since the 2013 reorganization and the passage of REDA has been "to provide for the efficient, safe, orderly and environmentally responsible development of energy resources in Alberta through the Regulator's regulatory activities".3  This includes "the protection of the environment" and "the conservation and management of water, including the wise allocation and use of water".4 Premier Notley's chief concern appears to be that the AER's environmental oversight and energy regulatory approval processes are not consistent, since the regulator's "overarching mandate is to promote energy development."5

Given the relatively short timeframe during which REDA has been in force, it remains to be seen how effectively the objectives of environmental responsibility and resource development are co-managed, should they not be split.  It is too early to assess the legitimacy of criticisms that a single regulator removes environmental checks and balances and shifts the AER's role to one of simply permitting.  Conversely, there may ultimately be a basis to argue that resource development has been unjustifiably stifled. 

Some insight may be found in AER Decision 2013-11 which authorized Shell's Jackpine Mine Expansion Project.  It was one of the first project approval determinations rendered under the REDA framework.  By any standard, AER Decision 2013-11 involved a rigorous environmental review, with the ensuing approval being subject to 22 conditions, 88 non-binding recommendations and numerous findings of significant adverse environmental and other effects.6

Changes to the structure of the AER will be among the most critical energy policy reforms the new government considers. The AER's mandate directly impacts the energy industry's ability to obtain project approvals, secure financing and assess jurisdictional and regulatory risk.  From an industry perspective, key implications – both positive and negative – of a split regulator include the following:

  • the potential to facilitate greater national and international social acceptance for Canadian energy project development;
  • less large bureaucracy, and potentially greater regulatory focus and ability to work more directly with applicants;
  • overlapping jurisdiction and regulatory duplication;     
  • lack of clarity respecting the AER's new structure;
  • project delays by returning to a multiple approval system;
  • movement from a life-cycle (i.e. from conception through operations to final decommissioning and reclamation) to a more fragmented system creating greater ongoing regulatory burdens;
  • increased risk of reviews, appeals and legal challenge respecting the scope of new statutory changes; and  
  • uncertain realignment with federal regulators.

Regardless of whatever potential benefits may result from a split regulator, the uncertainty of a restructured provincial energy regulator – for the second time in less than three years – creates significant risk for energy companies, investors, and the province as a whole. It is also unclear whether such dramatic reform is necessary to achieve the new government's goals.  As mentioned, a refreshed policy approach can be implemented through section 67 of REDA and senior staffing changes resulting from the NDP election pledge to assess existing agencies, boards and commissions.  Further, some of the AER's recent innovative approaches to environmental protection, including cumulative impacts management and play-based regulation, may already provide an existing platform Premier Notley's government to address concerns regarding the level of current regulatory environmental oversight.

Energy Minister Marg McCuaig-Boyd stated that there will be "an announcement in the next few weeks" about a review of the AER and a wider look at Alberta's energy regulations.7  In a short period of time the new government is poised to address several critical pillars of Alberta's energy economy, including royalties, refining and greenhouse gas.8  The AER is now among them.

From 2012 to 2015, BLG wrote extensively on the significant changes that were brought about through the passing and implementation of REDA, as well as the government process which preceded the provincial regulatory reforms, the scope of which is unprecedented in Alberta's oil and gas history.9 To the extent that the new government further reforms the Alberta oil and gas regulatory framework, BLG will be providing regular analysis.



2 Section 67 of REDA provides as follows:

Direction to Regulator

67(1)  When the Minister considers it to be appropriate to do so, the Minister may by order give directions to the Regulator for the purposes of

(a)    providing priorities and guidelines for the Regulator to follow in the carrying out of its powers, duties and functions, and

(b)    ensuring the work of the Regulator is consistent with the programs, policies and work of the Government in respect of energy resource development, public land management, environmental management and water management.

(2)  The Regulator shall, within the time period set out in the order, comply with directions given under this section.

3 REDA, section 2(1)(a).

4 REDA, section 2(1)(b)(ii) and (iii).




8 See our June 26, 2015 blog posting discussing the recent provincial regulatory developments re: greenhouse gas emissions at:


About BLG

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions