Alberta Energy Regulator CEO resigns in midst of media controversy over govt’s liability for oil and gas reclamation

Alberta Energy Regulator

Alberta Energy Regulator recently announced regulatory efficiency initiatives, allowing it to better respond to new technology and changing stakeholder expectations

One day after the Alberta Energy Regulator had to publicly apologize for using unvalidated figures for potential Alberta oil and gas liabilities – as much as $260 billion – in a presentation to industry executives by a vice-president, CEO Jim Ellis has announced his resignation effective Jan. 31, 2019. The provincial regulator says the decision is not related to the controversy.

“This decision has been in the planning stages for the past several months. The board of the regulator will begin a broad-based search for the new CEO immediately to ensure continuity of leadership in the organization,” the agency said in a press release.

Alberta Energy Regulator
Jim Ellis, Alberta Energy Regulator.

The National Observer and The Star published a story Thursday mostly based upon a slide presentation and speaking notes by Robert Wadsworth, VP of closure and liability, delivered in February.

“We want to apologize for the concern and confusion that this information has caused,” the AER said in response, noting that the inflated number was intended to drive home to industry that the liability issue is serious and the Alberta government is reforming the lax regime that regulates orphan wells and oil sands reclamation.

Despite the controversy, Ellis enjoyed some solid accomplishments during his tenure with the regulator, which began 2013 as its first CEO.

He worked with the Government of Alberta and the Alberta Energy Regulator board of directors to build the new regulator, according to the release, merging the regulatory functions of the former Energy Resources Conservation Board with those of former Environment and Sustainable Resources Development (now Alberta Environment and Parks) related to oil and gas development to create a single, full-lifecycle regulator for the province.

“Jim’s leadership and strategic vision has been vital to the launch and growth of the Alberta Energy Regulator,” said AER Chair Sheila O’Brien.

“He built a new organization from the ground up, ensuring that the needs of all stakeholders were embedded in the decision making framework of the AER.”

The Alberta Energy Regulator has been criticized by the oil and gas industry in recent years for excessive red tape and approval timelines much longer than in other provinces.

“While the US is reducing the cost of environmental regulations and streamlining, Canada is moving in the opposite direction. There are between 40 and 50 policy and regulatory initiatives under way with the potential to adversely impact the upstream oil and gas industry. These are conservatively estimated at between $450 and $760 million annually which is over and above the annual base policy and regulatory cost of $3 billion,” the Canadian Association of Petroleum Producers wrote in a 2017 competitiveness study.

Earlier this year, the regulator rolled out the “Integrated Decision Approach,” which combines the many submissions previously required for development into a single application, review, and decision by the regulator.

The new approach was praised by industry as an important contribution to helping Alberta producers become more competitive.

Energy Minister Marg McCuaig-Boyd thanked Ellis for his “steady leadership through an important evolution of Alberta’s regulatory system.”

“Our government continues our firm commitment to the ongoing work needed to ensure a modernized regulatory system which protects the environment while providing predictability for industry, Indigenous peoples and stakeholders,” she said in an email to Energi News.

The Alberta Energy Regulator claims that reforms during Ellis’ time at the helm “delivered more than $2 billion in industry savings while protecting public safety and the environment.”

“The AER is a trusted, effective, and more efficient regulator today because of the leadership of Jim Ellis,” said O’Brien. “The AER Board wishes Jim all the very best in the future and offers our gratitude for his service and the legacy he leaves at the AER.”

Before joining the Alberta government, Ellis served for 23 years as an officer in the Canadian army, retiring as a colonel in 2006, according to his AER biography.

He was appointed deputy minister of environment in 2008 and held that position until 2011, when he was named deputy minister of energy.

As deputy minister of energy, Ellis led the development and implementation of the Oil Market Diversification Strategy, was the lead provincial official for the Canadian Energy Strategy, and oversaw implementation of the Regulatory Enhancement Project.


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