INTRODUCTION

On October 24, 2012, Bill 2, Responsible Energy Development Act (“Bill 2”), received first reading in the Alberta Legislature.1 If passed, Bill 2 will create a single provincial regulator for upstream oil, gas, oil sands and coal development (“Energy Developments”), which had been one of 6 recommendations made by the Regulatory Enhancement Task Force (the “Task Force”) in its December 2010 report.

HIGHIGHTS OF BILL 2  

Under Bill 2, a single regulator, the Alberta Energy Regulator (the “Regulator”), will assume the Energy Development regulatory functions currently administered by the Energy Resources Conservation Board, and Alberta Environment and Sustainable Resource Development.  

The mandate of the Regulator will be to provide for the efficient, safe, orderly and environmentally responsible development of Energy Developments in Alberta, and to regulate the disposition and management of public lands, the protection of the environment, and the conservation and management of water, including the wise allocation and use of water. This mandate will be carried out in accordance with specified legislation, including the Oil and Gas Conservation Act, the Oil Sands Conservation Act, the Pipeline Act, the Public Lands Act, the Environmental Protection and Enhancement Act (“EPEA”) and the Water Act.  

Under Bill 2, a regulatory review will be available for specified decisions of the Regulator. Additionally, the Regulator may, in its sole discretion, reconsider a decision made by it and may confirm, vary, suspend or revoke the decision which, subject to the yet to be passed regulations, may be made with or without conducting a hearing. As well, a decision of the Regulator is, with leave, appealable to the Court of Appeal on a question of jurisdiction or law. Under section 25 of Bill 2, all appeals under the EPEA and the Water Act will be to the Court of Appeal and not to the Environmental Appeals Board.  

According to the Government’s News Release, the arms-length single Regulator will be operational by June 2013, which is consistent with the timing previously announced by the Alberta Government.  

ENVIRONMENTAL RESPONSIBILITY v. RESOURCE DEVELOPMENT  

In terms of the balance between environmental responsibility and resource development, Environment and Sustainable Resource Development Minister Diana McQueen has stated that “[a]s we grow, we must continue to find the right balance between environmental management and resource development to ensure Alberta and Canada remain global leaders on both fronts” and that “[t]hrough this regulator, we are taking a new approach to how we develop our energy resource while maintaining our strong environmental outcomes.”2

It is claimed that under Bill 2, the single Regulator will be able to provide an important balance to the environment, since it will have the ability to assess higher fines than before, penalties and fines will be aligned across statutes, the courts will also have increased fines at their disposal for companies which are not operating in accordance with agreements, and the environmental legislation will remain as stringent as it was before.3

It remains to be seen how effectively the seemingly competing objectives of environmental responsibility and resource development are co-managed, and whether criticisms will be legitimized which have suggested that the implementation of a single Regulator may remove some environmental checks and balances and shift the role of the Regulator to one of simply permitting.

Bill 2 is one of several initiatives recently undertaken in furtherance of the Province’s plan to manage its resources in an integrated manner. These, combined with the concurrent federal streamlining initiatives and other legislative reforms, have resulted in significant and sweeping regulatory reform which, arguably, is unprecedented in Alberta’s Energy Development history.