3rd edition
Authors:	Duncan Kenyon, Nikki Way, Andrew Read, Barend Dronkers, Benjamin Israel, Binnu Jeyakumar, Nina Lothian
Publisher:	Pembina Institute
Publish Date:	October 2016
PDF Download:	[Landowners' Guide]              [Landowners' Primer]
Initiation Phase
Exploration Phase
Development Phase
Pipelines and Other Infrastructure
Environmental Impacts
Abandonment and Reclamation
Compensation, Rights, and Hearings
Appendices                 Alberta Energy Regulator                 Other Alberta Departments                 Other Resources                 Legal Assistance                 Energy Industry Associations                 Provincial Non-profit Organizations                 Surface Rights and Local Groups                 Responsible Energy Development Act                 AER Oil and Gas Related Legislation                 AER Energy Related Legislation                 Other Provincial Acts                 Documenting Costs                 Glossary of Terms

Regulatory Board and Government Changes

Regulatory board changes

• 

  Figure 9. Regulatory responsibility in Alberta

The regulation of the oil and gas industry has changed significantly in the last decade. Previously, several ministries and bodies were involved in approving energy resource projects. The Responsible Energy Development Act (REDA) governs the new Alberta Energy Regulator (AER). The new Regulator was set up to create a more streamlined process for upstream oil, gas and coal development and to remove overlapping jurisdictions. The AER is now the single regulator for energy development in the province, often referred to as a ‘one-stop shop’ approval body. Its responsibilities include applications for exploration and development; inspections, compliance, and environmental protection; and reclamation, remediation and abandonment.

The Alberta Utilities Commission and the Environmental Appeals Board continue to exist, but their scope is limited to activities outside of oil and gas, and therefore have little relevance to the issues explored in this guide. The Surface Rights Board and the National Energy Board continue to operate with similar mandates as previously, and have been described below.

Figure 9 depicts the changes in regulatory responsibility in the province.

Government department changes

In addition to the changes to regulatory bodies, there were many changes across government departments and ministries that impact energy development. In 2012 the ministries of Alberta Environment and Water (AEW) and Alberta Sustainable Resource Development (ASRD) were amalgamated in to the Ministry of Alberta Environment and Sustainable Resource Development (AESRD). In May 2015, the ministry was changed to Alberta and Environment and Parks (AEP), representing the recent merging of AESRD and Ministry of Parks. However, all environmental approvals (such as an environmental impact assessment) on projects related to non-renewable energy are now under the jurisdiction of the AER, and the Ministry of Environment and Parks now has a limited role in the process. The Government of Alberta is still responsible for setting the policy direction of energy resource development through the creation of the legislation, regulations and rules that the AER must regulate by.

The Ministry of Energy remains unchanged.

Alberta Energy Regulator

What the Alberta Energy Regulator does

The Alberta Energy Regulator is the official regulatory body for upstream oil, gas, and coal development in Alberta. Although the AER reports to the Minister of Energy, in its day-to-day operations it works at “arm’s length” from government, as did its predecessor, the ERCB. In addition to the government-appointed chair, board directors and hearing commissioners, and the CEO, there are 1200 staff involved in day-to-day operations. These are located at the Calgary head office, two Edmonton offices, two regional offices and eight field centres across Alberta.

The AER is a quasi-judicial, independent body responsible for the day-to-day management of the energy industry in Alberta, and ensures development occurs in accordance with government legislation, regulations and rules. With the exception of energy tenure, which is managed by Alberta Energy (see Alberta Energy) the AER acts as a ‘one-stop shop’ approval body for the full life cycle of oil, gas, and coal development, including decisions on applications for energy development, monitoring for compliance, decommissioning of developments, and all other aspects of energy resource activities. The Regulator’s extensive powers are defined in several pieces of legislation (Appendix C). The AER must approve each oil or gas project before the project can proceed, and has authority to approve projects on both private and public lands.

Objections to proposed developments are submitted to the AER. Concerned residents or affected parties can inform the AER of their concerns before a project application is submitted; the AER will usually encourage the company to address your concerns at this stage. See Public Consultation, Notification and Involvement and Direct Negotiations With a Company (For Issues Other Than Compensation) for more information about submitting your concerns to the Regulator, and engaging with a company before a project begins.

After an operator submits a project application to the AER, concerned parties can raise their objections in the form of a statement of concern within the time outlined in the application notice. However, the AER will evaluate these objections to determine whether the claimant is both directly and adversely affected. If the AER determines that the claimant is directly and adversely affected then the AER may evaluate those objections to determine whether a project is in the ‘public interest’. If the AER does not determine a claimant is directly and adversely affected, then they may allow the application to continue without triggering a hearing.

The AER does not hear objections and disputes related to the surface rights, compensation, or expropriation, as these are under the purview of the Surface Rights Board or the Land Compensation Board (see Surface Rights Board and Land Compensation Board). Much of the AER’s work concentrates on addressing issues associated with public safety and risks to the environment. Although the AER can refuse permission for a company to extract oil or gas, it rarely does so. This is not surprising, given the fact that the AER’s mandate attempts to capture two somewhat competing goals; its first mandate is to promote energy development in the province, while the other to act as a responsible steward and watchdog of the industry. The AER has a regulatory enhancement program, which is an attempt to make progress on implementing the right mechanisms and processes to successfully balance these two goals.

The AER’s requirements to which a company must construct and operate a well, pipeline or other energy project are set out in Manual 013: Compliance and Enforcement Program. The program relies on education, prevention and enforcement as pillars to ensure compliance. It also reports results to the public on the AER website. The AER encourages industry self-reporting to determine if companies are complying with the standards, and supplements with risk-based surveillance, audit, and inspection activities. Proactive inspections are prioritized based on the company’s compliance history, the sensitivity or particular circumstances of the site, and the inherent risk of the operation itself. The AER may also conduct unscheduled and unannounced inspections when the public has identified issues and deficiencies with a company’s practices.

The AER’s enforcement toolbox includes remedial, deterrent or punitive measures, which can be applied individually or in any combination as a response to non- compliance. Incidents are categorized as either high or low risk and the associated actions are applied. If companies fail to comply with a notice, have a history of being issued with non-compliance notices, or have demonstrated disregard to a non- compliance notice, the AER will escalate its enforcement tactics. Actions that the AER can take can include issuing a notice of noncompliance and a noncompliance fee, suspending a licence or a permit, or issuing a compliance order. Additionally, they can issue a declaration naming a company or an individual, which then allows the Regulator to suspend any operations from that company, refuse applications, or require additional abandonment and reclamation deposits.

A list of incidents, investigations, and compliance and enforcement actions is available on the AER website. More information about AER inspections and enforcement can be found in the Assurance, Compliance and Enforcement Fact Sheet or found on the AER website.

Reclamation and remediation certificates, and environmental assessments

Since 2014, the AER has authority and responsibility (previously held by AESRD) for reclamation and remediation certificates, and conducting associated environmental assessments for oil, gas, and coal related projects.

The AER is responsible for the Alberta Environmental Protection and Enhancement Act (EPEA) requirement that all operators of projects on specified land must obtain a certificate of reclamation. Additionally, the AER has launched the Upstream Oil and Gas Reclamation and Remediation Program, which requires that land must be reclaimed when project sites are no longer needed for energy resource development. Upstream oil and gas reclamation certificates must be signed off by a government-approved reclamation professional, and all landowners and occupants should be given copies of all reclamation and remediation information. Industry is liable for all surface reclamation issues for the first 25 years. After the 25-year period, the Alberta government is liable for any surface reclamation issues.11

The AER also issues environmental impact assessments (EIAs) for energy resource projects. Environmental assessments are required for some energy resource projects by the Environmental Protection and Enhancement Act and the Water Act to determine w the potential environmental, social, economic or health impacts, and what ways these impacts can be reduced. Projects designated as mandatory under the Environmental Assessment (Mandatory and Exempted Activities) Regulation must be assessed, while the AER has discretion to require an assessment for any project not classified as mandatory or exempted. All information on environmental impact assessments is pooled with environmental assessments conducted by Alberta Environment and Parks (AEP). These can all be found on the AEP website.

Acts and regulations that govern the AER’s work

Some of the acts, rules and and regulations enacted by the Alberta government that relate to the AER’s regulation of oil, gas and coal industry are listed here. See Appendix C for more details.

Establishing act

• Responsible Energy and Development Act (REDA), and related regulations

Energy laws (known as energy resource enactments)

• Coal Conservation Act
• Oil Sands Conservation Act
• Oil and Gas Conservation Act
• Pipeline Act

Environmental laws (known as specified enactments)

• Environmental and Protection Enhancement Act (EPEA)
• Mines and Minerals Act (Part 8)
• Public Lands Act
• Water Act

Regulations governing the AER

• AER Rules of Practice
• Specified Enactment (Jurisdiction) Regulation
• AER Administration Fees Rules
• Enforcement of Private Surface Agreement Rules

Alberta Energy Regulator offices

The AER head office is in Calgary, with four regional offices and eight field offices. Each field office is on 24-hour call in case of emergency, but emergency related incidents and complaints about the operations of an existing project (such as odour or noise complaints) should be directed to the Energy and Environmental Emergency 24-Hour Response Line.

Alberta Energy Regulator (Head Office)

Suite 1000, 250 5 Street SW

Calgary, Alberta T2P 0R4

General Inquiries: 403-297-8311 (RITE: 310-0000) or toll-free 1-855-297-8311

Communications: 403-297-4601

AER's Customer Contact Centre: 1-855-297-8311

Operational Complaint and Emergency Number: 1-800-222-6514

www.aer.ca

Many of the phone numbers listed in this guide are part of the provincial government’s toll-free, long-distance RITE telephone service. In Alberta, dial 310-0000 and then enter the area code and seven-digit local number to connect or press “0” and hold for a RITE operator.

Geophysical Inspector Program

The Geophysical Inspector Program is administered by the AER. If a landowner or occupant has concerns about any damage, water wells, flowing shot holes, livestock damages, permit disputes, trespass and related damage, or other issues relating to seismic exploration, they can contact the program to investigate. The complaint is triaged to the appropriate field centre and a geophysical inspector will contact the complainant to meet or to investigate by phone.

Geophysical Inspector Program

(AER Inquiries): 403-297-8311 (RITE: 310-0000) or toll-free 1-855-297-8311

inquiries@aer.ca

exploration@aer.ca

Operational Complaint and Emergency Number: 1-800-222-6514

Information published by the Alberta Energy Regulator

The AER’s website, www.aer.ca, contains information about the stages of development, rules and directives, publications, notices of application and notices of decisions, and also links to many data systems or statistical reports. If you are having trouble navigating the website or accessing the information, you can contact inquiries@aer.ca or 1-855-297-8311. If you would like to be provided with specific information from the Products and Services Catalogue which is available on the AER website, you can request it from InformationRequest@aer.ca.

On its website, the AER has published a number of directives that set out the process and requirements that companies must meet with respect to wells, pipelines and facilities. The directive numbers correspond to the guides that were previously in place. All new directives replaced informational letters (ILs) and interim directives, although these are still available for reference. Directives, along with bulletins that announce regulatory changes by the AER, can all be found online.

The AER also issues annual reports and the AER Focus Newsletter, a quarterly newsletter updating the public and industry on AER initiatives. More technical documents, such as manuals, reports, and investigation reports, are also published online.

An overview of how the AER deals with concerns about an oil and gas project is provided in the AER brochure (carried over from the ERCB), Understanding Oil and Gas Development in Alberta, which can be found as Appendix 10 in AER Directive 056: Energy Development Applications and Schedules. This brochure gives a brief overview of the role of the AER in the application process, such as the difference between surface and subsurface mineral rights; how a company will space projects; how the company must consult with those outlined in their participant involvement program; and the process you may use to voice your concerns. If you are considered a directly and adversely affected party to development and are included in the participant involvement program of the proposed project, companies submitting an application to develop must give you a copy of this brochure, along with a letter from the CEO of the AER, a company information package outlining the project details, and relevant EnerFAQs. You will have 14 days after receiving the documents to consider and respond to the application before it is submitted (see Public Consultation, Notification and Involvement).

In some cases, applications that have outstanding concerns will trigger a public hearing. Hearings are described in Alberta Energy Regulator Hearings. You can find more information on the hearing process on the AER’s website, or refer to Manual 003: The Hearing Process for the Alberta Energy Regulator.

You may also find it instructive to read Directive 056, Appendix 11: Understanding the Participant Involvement Process, even though this is not written specifically for the public.

Decisions and public notices of application

The AER publishes various notices and decisions on its website, and there are several places where you may find information about an application.

For all applications submitted to the Regulator, you can search the Public Notice of Application database. You can find details and supporting documentation about the project such as the nature of the activity applied for, the legal land location, contact details for the company, and the deadline for filing a statement of concern. Applications will be available for 30 days after the application was filed, even if a decision was made on the application before 30 days. A company is also expected to send the public notice of application to anyone who has raised concerns about the project. You may also find additional information about a project before or after it is approved on the Integrated Application Registry.

Hearings and participation

The AER publishes notices for hearings, notice of participation in a hearing, or other hearing related notices on its “Notices” web page. You may also find amendments to notice of applications, and this acts as a secondary location to find notice of applications for some project applications. You can find decisions on hearings, regulatory appeals, or reconsiderations on the AER’s “Decisions” web page. Decisions on applications are posted on the AER’s “Publication of Decision Tool”. You can find decisions on participation for statements of concern, request for regulatory appeal, or request for consideration on the “Participatory and Procedural Decisions” web page.

Compliance and enforcement

The AER also publishes a compliance dashboard, where you may find information about incidents (such as an oil spill), investigations, and compliance and enforcement orders. This contains information only as far back as June 2014.

General publications

These and other AER publications are available on the AER website.

EnerFAQs (Frequently Asked Questions) cover a variety of subjects:

What is the Alberta Energy Regulator?

Having Your Say at an AER Hearing

Inspections and Enforcement of Energy Developments in Alberta

All About Critical Sour Wells

Explaining AER Setbacks

Flaring and Incineration

Proposed Oil and Gas Wells, Pipelines, and Facilities: A Landowner’s Guide

The AER and You: Agreements, Commitments, and Conditions

All About Alternative Dispute Resolution (ADR)

Oil Sands

Expressing Your Concerns – How to File a Statement of Concern About an Energy

Resource Project

How to Register a Private Surface Agreement

The AER publishes several fact sheets:

Preapplication Concern Fact Sheet

Reclamation and Remediation

Assurance, Compliance, and Enforcement

Emergency Planning, Preparedness, and Response

Responding to an Energy Incident

Bulletins

Bulletins are updated fairly regularly, and are available on the AER website. They serve to inform industry and the public on consultations, new regulatory requirements, programs, or other activity by the AER. Older material not included in the bulletin portal are archived and can be found in the AER library.

Directives

The AER’s directives are largely based on the previous guides used under the EUB and ERCB, with many guides carrying over the same titles and numbers. These directives set out requirements for any approval holder that falls under the jurisdiction of the AER, so many of them are technical in nature. All of the AER’s Directives are available on the AER website, but some guides that may be relevant to you are:

Directive 020: Well Abandonment (June 2010) Directive 031: REDA Energy Cost Claims (November 2013) Directive 036: Drilling Blowout Prevention Requirements and Procedures (February 2006) Directive 038: Noise Control (February 2007) Directive 039: Revised Program to Reduce Benzene Emissions from Glycol Dehydrators (January 2013) Directive 050: Drilling Waste Management (May 2015) Directive 055: Storage Requirements for the Upstream Petroleum Industry (December 2001) Directive 056: Energy Development Applications and Schedules (May 2014) Directive 058: Oilfield Waste Management Requirements for the Upstream Petroleum Industry (February 2006) Directive 060: Upstream Petroleum Industry Flaring, Incinerating, and Venting (October 2015) Directive 071: Emergency Preparedness and Response Requirements for the Petroleum Industry (November 2009) Directive 079: Surface Development in Proximity to Abandoned Wells (November 2014) Directive 083: Hydraulic Fracturing – Subsurface Integrity (May 2013)

Interim Directives

Interim directives act as the designated directives until they have been updated or replaced by AER directives. Some relevant directives are below:

Interim Directive ID 81-3: Minimum Distance Requirements Separating New Sour Gas Facilities from Residential and Other Developments (amended by ID-96-02 and ID 97-06)

Interim Directive ID 2001-03: Sulphur Recovery Guidelines for the Province of Alberta.

Interim Directive ID 2003-01: 1) Isolation Packer Testing, Reporting and Repair Requirements; 2) Surface Casing Vent Flow/Gas Migration Testing, Reporting, and Repair Requirements; 3) Casing Failure Reporting and Repair Requirements.

Manuals

Manuals are primarily reference guides for stakeholders and AER staff, and do not act as regulatory documents. While the Manuals are listed on the website, a few relevant manuals are listed below.

Manual 002: Drilling Waste Disposal Inspections (previously Directive 070)

Manual 003: The Hearing Process for the Alberta Energy Regulator (previously Directive 029)

Manual 004: Alternative Dispute Resolution Program and Guidelines for Energy Industry Disputes.

Manual 007: Principles for Minimizing Surface Disturbance in Native Prairie and Parkland Areas (previously Informational Letter 2002-01)

Manual 013: Compliance and Enforcement Program

Informational Letters

Informational Letter IL 91-11: Coalbed Methane Regulation.

Statistical Reports (ST)

ST1: Well Licences Issued

Lists licences with well ID, surface location, and Licensee. Updated daily.

ST49: Drilling Activity

Lists well ID, licensee, contractor, and activity date. Updated daily.

ST60B: Upstream Petroleum Industry Flaring and Venting Report

Provides a summary of the flared and vented volumes for the various oil and gas industry sectors. It also breaks down flaring and venting by region and company. Updated annually.

ST96: Pipeline Approval and Disposition Daily List

Lists pipeline permits, licences and amendments.

ST97: Facilities Approvals Daily List

Lists approvals for oil and gas facilities (such as oil batteries), with land location, application purpose, and licensee name. Updated daily.

ST108: AER Monthly Enforcement Action Summary

Lists the summary of non-compliance, as well as licensee, type of non-compliance, enforcement date, land location, and AER actions.

Products and Services Catalogue

The AER also publishes its Products and Services Catalogue, where you can find much of the annual or monthly reporting the AER publishes. Some of it is available for free, however you can place an order for additional information from the Regulator.

Map viewers

The AER has a series of map viewers that may be useful to you, including an Abandoned Well Map viewer and a well spacing viewer. Some of these have been carried over from the former EUB. With slow internet connections, these may be hard to load. If you have issues loading this material, contact the AER’s Customer Care Contact Centre.

The Abandoned Well Map viewer may be useful for those who plan to develop their lands in the future, as landowners are required to know the location of any abandoned well when applying for development or subdivision.

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