Canada: Play Back? AER's Evaluation Of Its Play-Based Regulation Pilot Released

Last Updated: July 27 2016
Article by Alan Ross

Most Read Contributor in Canada, September 2016

The Alberta Energy Regulator (the "AER") released an evaluation of its Play-Based Regulation Pilot (the "Evaluation") concerning unconventional resource development in Duvernay shale play near Fox Creek, Alberta (see our prior commentary on the key impacts to industry of Play-Based Regulation). Under the Play-Based Regulation Pilot (the "Pilot"), the AER trialed a single, integrated scheme which invites energy companies to submit one application for all activities associated with a development project within the defined play. The Evaluation of the Pilot presents a mixed review.

This blog post comments on the need for adaption of the AER's traditional regulatory framework and outlines the key outcomes of the Evaluation.

Play-Based Regulation – Why the change?

The AER's willingness to consider a new regulatory approach to unconventional oil and gas activities is a welcome development. The fragmentation in the AER's current system of regulation creates ongoing burdens for energy companies. These burdens include regulatory duplication, project delays associated with a multiple approval system and overlapping jurisdiction.1 The single, multiple-activity application would be more desirable if the consequence is certainty of longer-term approval.

Additionally, the extraction of unconventional resource poses unique challenges, some of which highlight shortcomings in the AER's traditional regulatory framework. In particular, Play-Based Regulation ("PBR") may be better poised to address the potential regional effects of unconventional oil and gas activities. These regional effects stem from the increased geographical scale of these activities and their use of different technologies, primarily hydraulic fracturing.

Key Outcomes of the Evaluation

1. Reduction of cumulative effects on the land and water.

One of the Pilot's stated objectives was to minimize the cumulative effects of unconventional oil and gas activities on land, water, air and biodiversity. The Evaluation concluded that progress was made towards reducing, but not minimizing, the cumulative effects of surface disturbances and water management in the Pilot area. The Evaluation credits the Pilot for reducing surface disturbances by increasing the use of fewer, larger multi-well pads. Further, Pilot participants applied for water licenses for their long-term needs of the entire project, instead of temporary diversion licenses. Giving broader consideration to the long-term diversion demands placed on regional water sources can reduce cumulative effects.

Next, as part of the Pilot, the AER envisioned industry voluntarily collaborating on surface development plans (eg water reservoirs, roads and pipelines). This proved abortive. Although practical barriers to collaboration, such as the relative physical dispersion of activities throughout the Duvernay are present, the AER will ultimately need to either mandate or incentivize operator collaboration if it wishes to see a change in the industry's highly competitive culture.

2. Lack of clarity for Pilot participants.

The Evaluation concluded that the requirements to submit a single application were not sufficiently detailed and clear. This made it challenging for Pilot participants to develop their applications. Of note, the AER's December 4, 2014 Manual 009, Play-Based Regulation Pilot Application Guide recognized that the Pilot's objectives would be less prescriptive than current AER requirements for single-activity authorizations. However, going forward, it will be critical for the AER to develop clear and comprehensively defined minimum application requirements for single, multiple-activity applications.

Despite this lack of clarity, the six Pilot participants' applications were approved, subject to only a few limitations and outstanding authorizations (the seventh participant, the Athabasca Oil Corporation, withdrew its application during the Pilot). Yet, concerns surrounding the increased risk of reviews, appeals and legal challenge stemming from this lack of clarity may linger.

3. Inadequate regulatory tools to that support and enable Play-Based Regulation.

The AER intended to develop appropriate regulatory responses to the generic risk profile given the characteristics of the Duvernay play. On March 17, 2015, under another concurrent project, the AER issued Subsurface Order No 3; this Order provided uniform subsurface requirements for the Pilot area. However, surface-related play-based requirements were not developed within the time frame of the Pilot, owing to the lack of regulatory tools that support and enable PBR. While it is still possible for such surface-related requirements to be introduced, at present, the Pilot appears to have fallen short of this objective.

4. Diminished stakeholder understanding and engagement.

The Evaluation concluded that stakeholders, including First Nations and Métis, see a benefit to having a broader, long-term view of energy development plans. However, the stakeholders did not feel that Pilot participants provided them with enough information to fully understand the project plans or their potential impacts. Additionally, information about the Pilot provided to stakeholders by the AER was insufficient. In turn, this lead to a limited understanding of the Pilot and its outcomes. Much work needs to be done to ensure PBR adequately and meaningfully engages with all stakeholders.

Play-Based Regulation: "I'll be back"

The Pilot represents the first step towards a new regulatory framework in Alberta's energy sector. Indeed, the AER has given every indication that it intends to operationalize the PBR more broadly across the province. If so, this process will need to be refined. Frank contemplation of the results of this Evaluation will be critical for the AER's success. Ultimately, if the shortcomings of the Pilot can be overcome, benefits will flow to all stakeholders.


1. The single application integrates activities governed under the Oil and Gas Conservation Act, RSA 2000, c O-6, Pipeline Act, RSA 2000, c P-15, Public Lands Act, RSA 2000, c P-40, Water Act, RSA 2000, c W-3, and Environmental Protection and Enhancement Act, RSA 2000, c E-12.

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.

In association with
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.