Key Players in the Energy Industry
by abenvirolaws in Energy Law
by abenvirolaws in Energy Law
The energy industry includes government, government-created bodies, and numerous companies producing, developing, or refining renewable and non-renewable forms of energy across Alberta.
Companies include producers such as Syncrude and Suncor, along with many others producing, extracting and transporting oil and natural gas from the oil sands and across the province; Epcor, Atco, Enmax and Direct Energy providing utilities such as natural gas and electricity to our homes and businesses; and an increasing number of renewable energy companies.
Although these companies are integral to the workings of our energy industry, key to our discussion today are the branches of government that regulate and control the industry along with the agencies and regulating bodies that the provincial government has created to oversee it.
Let’s begin with Alberta Energy. This is the provincial ministry tasked with the job of, “sustaining the interests of Albertans through the stewardship and responsible development of energy and mineral resource systems.”[1] Alberta Energy is responsible for the development of energy policy and significantly affects decision-making regarding both non-renewable and renewable resource development. The Ministry consists of the Department of Energy, the Alberta Energy Regulator, the Alberta Utilities Commission, the Alberta Petroleum Marketing Commission and the Post-Closure Stewardship Fund.
The Alberta Energy Regulator
The Responsible Energy Development Act established the AER and sets out what it can and cannot do. For one, the AER is tasked with the job of deciding whether applications for energy development should be approved, monitoring for compliance assurance, decommissioning developments, and all other aspects of energy resource activities.[2]
Once established, the AER was given significant powers both to interpret existing laws, regulations, and policies, as well as, to create their own rules, called Directives.[3] Directives are created by the AER and can set out changes to rules or requirements for those holding AER licenses or those seeking to implement a new project or license. These directives can be extremely important for environmental law because, as we discussed in our Fundamentals of Law section (which can be found here), the details that describe how a law is to be implemented, whether found in regulations, policy, or in this case directives, are often the most important, distilling complex environmental problems into workable parts.
It is because of this power to create their own rules (rather than always relying on the government to introduce new laws through the Legislature) that the AER, despite being created by statute, plays a very significant role in environmental management. For example, the AER can make decisions about Oilfield Waste Management Requirements for the Upstream Petroleum Industry (found in Directive 058) or about Reducing Benzene Emissions from Glycol Dehydrators (found in Directive 039).
The Alberta Utilities Commission
The Alberta Utilities Commission (AUC) regulates the utility sector, natural gas, and electricity markets. It is a quasi-judicial body which means that it can make binding decisions and that an application to the AUC, such as an application regarding utility prices and rates, will proceed through a court-like process with the filing of documents, exchange of disclosure (exhibits and evidence), an oral hearing, and written submissions – all prior to a decision being made.[4] It does not have the same broad jurisdiction as a court which means that the AUC can only hear matters on certain topics that fall within its mandate and expertise.
The AUC plays a significant role in the regulation of both the electricity and natural gas sectors. It has the authority to oversee the cost of electricity and the market pool on behalf of consumers; it has the final decision making power over the construction of any new electric power generating facility or transmission facility in the province; it oversees regulations such as the Micro-Generation Regulation[5] which allows Albertans to generate their own power (such as with solar panels); and it oversees the costs associated with natural gas transmission, among other things.[6]
The Canadian Energy Regulator
The Canadian Energy Regulator (CER) is the newly named federal organization tasked with the regulation of pipelines, energy development and trade. The difference between the CER and Alberta’s governmental organizations, such as the Alberta Energy Regulator, is that the CER regulates interprovincial or international pipelines and any infrastructure related to these existing pipeline systems.[7] This means that in a province like Alberta with both intraprovincial pipelines (such as between Hardisty and Edmonton) or interprovincial and international pipelines such as those to the United States, both the CER and the Alberta Energy Regulator have a role to play in pipeline management.
The CER receives its authority from the Canadian Energy Regulator Act which sets out the Regulator’s powers, members, and relevant processes.[8] One aspect of the CER’s work that you may have heard about is its role in approving large pipeline projects. One example was when the CER’s predecessor (known as the National Energy Board) approved the inter-provincial Trans Mountain Pipeline. (This is new pipeline causing some political disagreement between the governments of Alberta and British Columbia and which would transport oil from Alberta to the coast of British Columbia, for export to foreign markets.) When making these types of decisions the CER will hold oral hearings during which evidence is presented to help them to make decisions about the proposed pipeline and its route. They can then make recommendations or issue a project approval. For example, the National Energy Board recommended that the Federal government approve the Trans Mountain Expansion Project in May 2016, subject to conditions.[9]
Future of energy use
Despite some changes, renewable energy capacity and supply is still vastly outpaced by fossil fuels. It is estimated that today less than 10% of the energy in Alberta comes from renewable sources, but changes are constantly occurring. The future of our energy use is still decidedly unsure; however, even relatively conservative estimates[10] such as the Sustainable Development Scenario released by the International Energy Agency predict a significant decline in fossil fuel use by 2040. Notably, even in their more ‘business as usual’ prediction, the International Energy Agency sees a slow down in fossil fuel production and use.[11]
Alberta is a strong contender for renewable resources due in part to our highly skilled labour force, well-mapped underground and expertise in resource extraction but it will be up to all citizens to push for these changes.
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[1] Alberta Energy, “About Alberta Energy” Government of Alberta online: https://www.alberta.ca/energy.aspx.
[2] Alberta Energy Regulator, “What we do” online: https://www.aer.ca/providing-information/news-and-resources/enerfaqs-and-fact-sheets/enerfaqs-what-is-the-aer.
[3] Responsible Energy Development Act, SA 2012, c R-17.3.
[4] Alberta Utilities Commission, Rule 001: Rules of Practice (24 March 2017) online: http://www.auc.ab.ca/Shared%20Documents/rules/Rule001.pdf.
[5] Micro-Generation Regulation, Alta Reg 27/2008.
[6] Alberta Utilities Commission, “Role in the electric sector” online: http://www.auc.ab.ca/pages/electric-industry.aspx; Alberta Utilities Commission, “Role in natural gas markets” online: http://www.auc.ab.ca/pages/natural-gas-industry.aspx.
[7] National Energy Board, “Regulation of Pipelines and Power Lines” (1 December 2016) Government of Canada online: https://www.neb-one.gc.ca/bts/whwr/rspnsblt/pplnpwrln-eng.html.
[8] Canadian Energy Regulator Act, SC 2019, c 28, s 10.
[9] National Energy Board, News Release, “National Energy Board Hearing on change to Trans Mountain pipeline route begins Monday” (11 January 2018) online: https://www.newswire.ca/news-releases/national-energy-board-hearing-on-change-to-trans-mountain-pipeline-route-begins-monday-668834803.html.
[10] Nichole Dusyk, “Why Canada’s Energy Future report leads us astray – Examining assumptions and trends in Canada’s energy production” (9 January 2020) Pembina Institute online: https://www.pembina.org/blog/why-canadas-energy-future-report-leads-us-astray
[11] IEA (2019), “World Energy Outlook 2019”, IEA, Paris https://www.iea.org/reports/world-energy-outlook-2019
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