Bill 2 Coverage October 24 – 27, 2012
Bill 2 – The New Alberta Oil & Gas Regulator – Quick Review by the Alberta Surface Rights Group October 27, 2012
– One section specifies an “enforced dispute resolution” which all parties would have to submit to! It does not flesh out penalties for refusing to comply. …
– There is a clause in this bill that says no one can sue the regulator for any thing they do…….or don’t do!
I guess a big part of my concern is this “super regulator” is being given almost a blank check without the government putting any kind of checks and balances in place! The legislation basically allows this entity to morph into whatever it wants to be. The language is so vague the regulator can interpret it how ever they see fit.
If this “super regulator” is composed of industry or government politicians, it is very likely the other stakeholders interests will be basically ignored? Landowners would basically lose the right to have any input into how their land is exploited and used and the level of compensation for oil & gas developement!
I participated in the “Competitive Review for Oil and Gas Regulators”. I was there representing landowners. Of a total of about 300 people the general breakdown was about 2% landowners, 2% First Nations, 35 % government, and 60% industry! Guess who called the shots?
And now we get this piece of legislation that goes way beyond the stated goal of “simplying the regulatory process”….unless eliminating all property rights is the actual “simplification”? [Emphasis added]
Government of Alberta proposes single energy regulator by Gavin S. Fitch and Evan W. Dixon, October 29, 2012, McLennan Ross LLP
On October 24, 2012 the Government of Alberta introduced legislation to create a single regulator for upstream energy resource activities involving oil, gas, oilsands and coal.
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The single regulator will use a corporate structure and will be governed by a board of directors with a chief executive officer. A separate roster of “hearing commissioners” will be created for the purpose of holding regulatory hearings. It is anticipated that the single regulator will be operational by June 2013.
Although there appear to be similarities with the current regulatory regime there are several notable changes, including:
• A single regulator will be responsible for approvals pursuant to the Public Land Act, the Water Act and the Environmental Protection and Enhancement Act in respect of energy resource activities;
• The creation of a registry to allow landowners to register private surface agreements which can then be enforced;
• Removal of the explicit reference to consideration of the public interest currently found in section 3 of the Energy Resources Conservation Act (“ERCA”) in proceedings before the proposed Regulator; and
• Granting the Crown a right to file a statement in a hearing or inquiry before the Regulator without presenting a witness to speak to the statement which is not subject to a right of cross examination, unless presented by a witness.
• A repeal of legislated standing rights for landowners pursuant to section 26(2) of the ERCA. Instead, the regulator will decide (in accordance with the yet to be released rules and regulations) whether to conduct a hearing upon receiving a statement of concern from a person who may be directly and adversely affected.
Appeals from decisions of the single regulator will continue to be limited to questions of law or jurisdiction with leave from the Court of Appeal. It is noteworthy that the Bill as currently drafted contemplates that the new regulator will not have the jurisdiction to assess the adequacy of Crown consultation associated with the rights of aboriginal peoples.
Tory plan for single energy regulator sparks debate among landowners, politicians by Tamara Gignac, October 26, 2012, Calgary Herald
Landowners and politicians are divided on the merits of a single regulator to oversee all future oil, gas, oilsands and coal development in the province. The Redford government is proposing new legislation to bolster oversight of the province’s energy industry. Companies currently must file applications to the Alberta government as well as to the arms-length Energy Resources Conservation Board (ERCB). But under Bill 2, also known as the Responsible Energy Development Act, a single provincial body would be responsible for energy resource developments. The Tories say the legislation will give Alberta the regulatory teeth it needs to issue higher fines for individuals and companies who break the law.
The new rules are also good for property owners, who for the first time can register private surface agreements, according to the province. “That’s a big one,” said Mike Deising, a spokesman for Alberta Energy. “If a landowner and the industry have a deal — but industry doesn’t live up to their end of the bargain — the landowner can take it to the regulator,” he said. “Previously, they could have gone to court but there wouldn’t have been regulatory enforcement.”
Disputes sometimes arise over the placement of pipelines or gas wells, with landowners and conservation groups pitted against large petroleum producers. One such case involves Rosebud resident Jessica Ernst, one of the province’s most outspoken critics of fracking, a process where water, chemicals and sand are blasted deep underground to break up coal formations and release natural gas. Ernst alleges that fracking has contaminated the hamlet’s water supply. She’s launched a lawsuit against Encana, the province and the ERCB, and remains skeptical that a new single regulator will do much to protect landowners
“It’s a way to deregulate the industry,” she said. “It means less red tape for the energy companies. They used to have to go to the different agencies to get all their permits and there were different eyes reviewing each application. Now it’s just going to the ERCB.”
The new regulatory regime involves combining the 75-year-old ERCB with the regulatory functions of Alberta Environment and Sustainable Resource Development. That’s a problem, believes NDP critic Rachel Notley. Energy Minister Ken Hughes said the point is to provide a single window for industry, thus reducing duplication. But Notley argues the move hurts landowners because it creates a conflict of interest for the regulatory body charged with environmental protection. “One of the mechanisms that helped landowners was being able to go the Ministry of Environment. Now that is all moved into this new agency, which is essentially ‘ERCB plus,’” she said. Notley fears that under the new system, projects will be pushed through too quickly without proper consideration given to potential effects on Alberta’s land and water supply.
Jason Hale, Wildrose MLA for Strathmore-Brooks, said his party plans to take a close look at the new legislation and may propose some amendments, if necessary. “The PC government seems to have lost the importance of individual property rights,” Hale said. “We’re going to talk to some of the stakeholders and the land-rights groups to see if they have any concerns with this bill.” Alberta has seen its share of conflict between energy companies and communities where the industry builds pipelines and wells. The province is even considering a new urban policy for oil and gas projects after the Calgary neighbourhoods of Royal Oak and Rocky Ridge raised concerns about a sweet oil well in their community.
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Barbara Gardener, who owns a ranch south of Longview, was pleased earlier this year when Suncor Energy withdrew a contentious plan to drill 11 sour gas wells and build a pipeline on land in Kananaskis County.
Plans for single Alberta energy regulator sparks critics’ concerns by Bill Kaufmann, October 25, 2012, Calgary Sun
The potential for government abuses with a single energy industry regulator should be carefully monitored, a Wildrose critic said Thursday. On Wednesday, the province announced plans for the Alberta Energy Regulator that they said would expedite project approvals, hike fines for polluters and give landowners more input. But after reading the legislation, Wildrose utilities critic Joe Anglin said he’s concerned about the possibility landowners or industry could be arbitrarily penalized under the plan. “There’s a possible lack of due process … when you have an official able to issue a penalty like Court of Queen’s Bench,” said Anglin, MLA for Rimbey-Rocky Mountain House-Sundre. Anglin said the principle of Bill 2 — to speed the approval of oil, oilsands, natural gas and coal development applications — is a good one. “It makes sense to streamline, but the devil’s in the details,” he said.
One of those details that should raise concerns is hiking fines for industrial polluters, said Anglin. “Are they going to be abused? Are they going to have fines as a cash grab to supplement their budgets?” he said. Fine revenues go into the government’s general revenues, though separate penalties known as creative sentences are often earmarked for conservation or prevention projects, said Alberta Environment spokeswoman Jessica Potter. “Creative sentencing is to get something good out of the bad,” she said. A spokesman for the environmental activist Pembina Institute said the new regulator could be a positive step, though not enough is known about the process to be certain. [Emphasis added]
WATCH: Alberta energy industry welcomes single regulator by CBC News, October 25, 2012
Representatives from Alberta’s energy industry are calling the move to a single regulator, a good idea. On Tuesday the Alberta government announced it will create one industry regulator to be in place by June 2013. The CBC’s Jennifer Lee has industry reaction in this report.
CAPP hails Alberta Energy Regulator aimed at streamlining project approvals by Bill Kaufmann, October 24, 2012, Calgary Sun
The petroleum industry is hailing a provincial plan to streamline and speed up approvals of energy projects. But the province said the change to a single industry regulator would also bring tougher penalties for polluters.
On Wednesday, the government tabled legislation to create the Alberta Energy Regulator, a one-stop monitoring and approval body Energy Minister Ken Hughes said should shave off months or years off start-up waits. “We want to remain an attractive place to do business,” Hughes said in Calgary. “It will be efficient and effective for industry and efficient and effective for landowners and Albertans.” The single regulator will assume the roles of the Energy Resources Conservation Board and the Alberta Environment Ministry and affect the oil, oilsands, natural gas and coal sectors.
When asked if the proposed higher fines for polluters are an admission current penalties are too light, Hughes said consequences for environmental breaches have already been “much more onerous” than those for other violations. “We’re taking all the penalties to the highest standards,” he added. The new approach, he said, also makes it easier for landowners to state their concerns earlier and to appeal to decisions. Environment Minister Diana McQueen said expediting projects won’t sacrifice Alberta’s wilderness. “The environmental outcomes we expect in this province won’t be lessened, they’ll be maintained and increased,” she said. “They’ll stand up to international scrutiny.” The energy industry is happy with the legislation and hopes it’ll reduce delays, said Brad Herald, spokesman for the Canadian Association of Petroleum Producers. “This is a major milestone today — it really establishes a platform for future growth,” he said. The environmental activist Pembina Institute isn’t opposed to the move but needs to know more, said spokesman Chris Severson-Baker. “Making Alberta’s regulatory processes more efficient could be a positive step, but it will depend on how this streamlining is implemented,” he said.
Details of Bill 2, the Responsible Energy Development Act, according to provincial government:
• Created after consultation with landowners, First Nations, environmental groups, industry, general public. [Refer also to The Alberta Surface Rights Group experience of this]
• Expected to impact oil, oilsands, natural gas and coal sector for next 50 years.
• Assumes regulatory roles of the Energy Resources Conservation Board and Alberta Environment and Sustainable Resource Development.
• Will bring higher fines for polluters
• More flexibility for regulators in granting approvals.
• Voluntary registry for landowners to register private surface agreements to improve enforcement.
• Maintains strength of environmental legislation.
• Give landowners a better avenue to state concerns.
• Requires both parties to take part in alternative dispute resolution process. [Emphasis added]
New energy regulator to cut “months” of red tape, Alberta ministers say environment will still be rigorously defended by Dan Healing, October 24, 2012, Calgary Herald
Alberta’s new energy regulator could save megaproject developers “more than months” of waiting, Energy Minister Ken Hughes said Wednesday. But environmental issues will be just as stringently addressed as ever, he said during a news conference at SAIT Polytechnic in Calgary after legislation establishing the Alberta Energy Regulator was introduced in the legislature. The new legislation is the culmination of a three-year process to improve the province’s regulatory regime and will combine the 75-year-old Alberta Energy Resources Conservation Board with the regulatory functions of Alberta Environment and Sustainable Resource Development. It includes provisions to increase non-compliance fines on the energy side to equal the much higher fines assessed under current environmental enforcement. It is to be implemented by next June, Hughes said. “Today … there’s a very onerous regulatory process, a large number of applications, and that would be from both the ERCB and ESRD,” he said, adding the new system will provide a single window for industry, thus reducing duplication. “It could be months. It could be more. It depends on the project,” he said when pressed to give an estimate of how much time upstream energy firms could save. “In larger applications, it could save more than months. In smaller applications, it could save months.” ESRD Minister Diana McQueen said the process will be more efficient, but not less stringent. “The streamlined process will enable us to focus more effectively on Alberta’s environmental priorities,” she said.
The legislation includes the creation of a policy management office to handle broader concerns — for instance, about high water usage of new drilling techniques — that may require government action. That will allow the regulator to deal strictly with issues surrounding specific projects as raised by parties that are directly affected, the ministers said. Chris Severson-Baker of the environmental Pembina Institute said his group plans to be in touch frequently in future with the policy office to “address where a lack of clear and strong environmental rules are contributing to uncertainty for the public, stakeholders and the energy industry.” He added in an e-mail: “We’re not opposed to streamlining the regulation of energy projects — making Alberta’s regulatory processes more efficient could be a positive step, but it will depend on how this streamlining is implemented, and those details have not been made public yet.”
The new regulator was welcomed by the Canadian Association of Petroleum Producers and the Small Explorers and Producers Association of Canada, neither of which was concerned about higher fines. “The tabling of legislation today is a major milestone. There’s lots of implementation to come,” said Brad Herald, Alberta operations manager for CAPP, adding he expects more optimization will emerge with time. “Our association has been asking for better processes for some time now, and clarity, and consistency and effectiveness,” said SEPAC chairman Doug Kay, adding any improvements in speed needed to process routine applications will be welcome. The government has argued the single window approach is necessary because applications for oil and gas, coal, water and land usage, and carbon capture and storage sometimes get bogged down in red tape. However, environmentalists have expressed concern the new system will lead to developments being pushed through too quickly, without enough consideration given to the effects on the land, water, animals, plants and production of greenhouse gas emissions. [Emphasis added]
Alberta government proposes legislation for single oil and gas regulator by Bill Graveland, The Canadian Press, October 24, 2012, The Tyee
CALGARY – Saying the “world is watching,” the Alberta government introduced legislation Wednesday that would put a single regulator in charge of overseeing all future oil, gas, oilsands and coal development in the province. Companies currently must file applications to the Alberta government as well as to the arms-length Energy Resources Conservation Board. Bill 2, the Responsible Energy Development Act, creates a single provincial regulator that will also be responsible for energy resource developments from initial application to reclamation. “We know that as we develop resources in Alberta, and the oilsands in particular, the world is watching to see the environmental outcomes that we achieve,” said Diana McQueen, Minister of Environment and Sustainable Resource Development. “Are we making sure we monitor the air, land, water and biodiversity?”
The government says the Alberta Energy Regulator (AER) will reduce the time and money it takes for companies seeking approvals for oil, natural gas, oilsands and coal projects and was one of six recommendations handed down in January 2011 by a government committee. It’s part of the province’s efforts to make the industry more competitive with other regions. Two years ago, the government introduced incentives for oil and gas drillers and rolled back royalty rates. “We all know we have immense resources. This is a responsibility that we do not take lightly,” Alberta Energy Minister Ken Hughes told reporters in Calgary. “We are creating a one-window approach to energy regulations. The new energy regulator will be efficient and effective for industry, it will be efficient and effective for landowners and Albertans.”
Calling the current regulator process “onerous,” Hughes said the single-window approach will simplify the process. “If you’re trying to start a large oilsands plant in northeastern Alberta there can be a couple of hundred applications you have to fill out,” said Hughes. “Today, it’s a single window.”
The regulator will be governed by a board of directors, with a chief executive officer at the helm. It is expected to be operational by June 2013.
Highlights of the legislation include higher fines for individuals and companies who break the law, voluntary registry for landowners to register enforceable private surface agreements and more flexibility to receive and process applications. “The environmental outcomes that we expect in this province will not be lessened. They will be maintained and increased,” said McQueen. “This new legislation is intended to eliminate duplication among the work of multiple departments — not to weaken environmental requirements or legislation.” Alberta’s environment legislation remains as stringent as it did before but the new regulator will enforce all legislation related to energy resources including environmental protection, land and water acts, McQueen added.
The manager of operations in Alberta for the Canadian Association of Petroleum Producers calls the legislation a “major milestone. “I think it really establishes a platform for future growth. It’s a major opportunity to recalibrate a major system for Alberta,” said Brad Herald. He said it remains to be seen if the new body will help speed up the regulatory approval process. “There’s certainly that potential. This is a journey. I really think some of those opportunities will be realized when you look at that cradle-to-grave of legislation.”
WATCH: Alberta returning to 1 regulator for energy industry by CBC News, October 24, 2012
Alberta Energy Minister Ken Hughes announced Wednesday in Calgary that the province will establish one regulator for oil, gas, oilsands and coal in the province. The new arm’s-length body will take over the regulatory functions of the Energy Resources Conservation Board, Alberta Environment and Sustainable Resource Development. The agency will be governed by a board of directors and a chief executive officer. The provincial government expects the new regulator will be operating by June 2013. The change to a single regulator is included in Bill 2, the Responsible Energy Development Act. The proposed legislation also includes higher fines for individuals and companies who break the law. And it will allow landowners to volunteer to register for private-surface agreements, which can then be enforced. [Emphasis added]