The Alberta Energy Regulator in its present form cannot be saved
A new coalition is calling for reform of the Alberta Energy Regulator (AER). As the Unethical Oil investigative series revealed, the AER is so rotten that it’s stinking up the joint like over-ripe Limburger cheese. Why stop at reform? Let that be an interim step while the provincial government prepares enabling legislation to create an entirely new regulatory regime that finally properly protects the interests of the Alberta people.
This coalition is composed of Alberta Wilderness Association, Polluter Pay Federation, Keepers of the Water, Canadian Association of Physicians for the Environment, Alberta Environmental Network, Calgary Climate Hub, Alberta Beyond Fossil Fuels, and Treeline Ecological Research. Energi Media has interviewed most of them and I am a member of the Climate Hub, albeit not an active one. These are knowledgeable, informed, and experienced people. They are not to be dismissed, lightly or otherwise.
In their press release, the coalition provides a partial list of what it calls, “repeated failures to adequately regulate energy development.” These include the recent Kearl Lake oil sands debacle, approval of Suncor’s operational plan for the McClelland Lake Wetland Complex, no reclamation plans for the enormous oil sands tailings ponds that now contain four trillion litres of waste, and estimated environmental liabilities as high as $260 billion (under-estimated and closer to $300 billion, based on my reporting).
A long list of other inadequacies could be added that includes: a disastrously poor data management system (data is the lifeblood of good regulation), an utterly opaque structure that prevents even the tiniest bit of transparency, the appointment of only oil and gas professionals on the board of directors, and the fact that oil and gas companies – the entities being regulated – pay 100 per cent of the regulator’s budget.
On-the-record interviews are hard to get because sources fear retribution, including losing their jobs and never being employed again within the industry. But the things I’ve been told off-the-record would curl your hair!
That said, the root of my argument for an entirely new regulator comes from an email sent to me last summer by Dr. Monique Dube, the AER’s former chief scientist. While acknowledging that the regulator is far from perfect, she made the point that most of its employees go to work every day determined to fulfill their duties as best they can. To protect the public interest – including the environment and Indigenous rights – as best they can. The same holds true for a large majority of company workers.
Based on my reporting over the years, and the time I spent employed by the industry, Dr. Dube is correct. The people inside the system are not evil. Even the appointees at the top of that system – the political operator CEO and the oil and gas “consultants” who make up most of the board of directors – no doubt believe they are promoting the best possible public interest.
The system, not the people, is flawed. But I’d go one step further and argue that the system was built to reflect Alberta’s values, from the beginning of the oil industry over 100 years ago to the present day.
Those values are to protect the financial health and profitability of oil and gas companies; to attract capital, which is necessary to support the service sector and other parts of the industry, like finance and manufacturing; the creation of good paying jobs, especially in rural areas where high school graduates could work hard and make a good life for themselves and their families; and, finally, to generate revenues for government that support generous public services like education and healthcare.
If, in the real world, the industry racked up hundreds of billions in unfunded environmental liabilities and trampled on the rights of rural landowners and northern indigenous communities, well, that was the price Alberta paid to be Canada’s richest province.
And it’s the values that have to go. Renovating a building with a rotten foundation requires starting from the bottom. Without that work, the new kitchen cabinets and the fancy bathrooms are doomed once the floors begin to sag because the basement walls are crumbling.
Dr. Dube explains the issue this way: “The source of the problem lies in the belief at the most senior levels of government, the regulator, and industry that you cannot both develop the resource economically while protecting the environment, and honour the rights of Indigenous peoples,” she wrote.
“And to that I say, ‘false.’ You may not know how to do it but that doesn’t mean it is not possible.”
What is not possible is to reform what Professor Jason MacLean calls the most “captured” regulator in North America. By captured, he means a regulator that puts the interests of the industry it regulates about the public interest. The AER is so bad, Professor MacLean argues, that the industry’s interest is the public interest in the eyes of Alberta’s political class and public servants.
My guess is that the coalition members would be quite happy to replace the AER with a credible organization, but they settled on reform as the more politically palatable option. Fair enough. No need to make perfection the enemy of good. But that doesn’t mean Albertans shouldn’t demand perfection, or as close to it as possible.
Let’s give Dr. Dube the final word.
“The longer this belief of ‘short term gain’ is held, the faster and bigger the liability grows. The only way you can develop the resource over the long term is to do so in a sustainable manner,” she writes.
“We are out of runway, though, on this opportunity in Alberta.”
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