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Alberta energy regulator gives lesson on less-prescriptive approach


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Alberta energy regulator gives lesson on less-prescriptive approach

Asenior official with the Alberta Energy Regulator told a Washington, D.C.,audience July 14 how his agency, formed in 2013, had brought multipleregulatory processes for oil, gas, bitumen and coal under one umbrella. But healso cautioned that placing all regulatory authority for a certain industrywith one organization may not work in the U.S.

"WhatI know of the system here in the United States is that it is very complex, andthe authority is diffuse, and as soon as you're working within a system wherethat's the structure, a lot of the opportunities that we've been able to tackleare much more difficult to get after," Kirk Bailey, executive vicepresident for operations of the Alberta Energy Regulator, or AER, said at anevent sponsored by the U.S. Energy Association.

TheAlberta energy industry has embraced the AER and the regulatory efficiencies ithas created, with regulators and companies partnering to work through newregulations and enforcement actions, Bailey said. Environmental groups also canbenefit from partnerships with the agency, although some green groups viewthese collaborations with suspicion, he said.

Thecooperation, as well as some of the AER's early regulatory work, helped thispast spring, when a wildfire swept through the Fort McMurray area in northernAlberta. The AER had worked with the energy companies operating in the regionto develop emergency response plans, which he said worked. Since industrialsites were not at immediate risk, the AER served as a conduit, or "airtraffic controller," for the energy companies and emergency respondersduring the crisis. The AER also had an all-hands-on-deck approach, assistingthe provincial government by ensuring environmental standards were beingadhered to as emergency responders were cutting fire breaks through swaths ofthe forest in an effort to slow the fire.

Alberta'sgovernment flipped from the long-governing Progressive Conservatives to the NewDemocratic Party in May 2015, bringing in a host of environmental policychanges, some of which will be handled by the AER. The agency will manage theprovince's new climate change plan, including the emissions cap established forthe province's oil sands, as well as another for methane emissions. In bothinstances, Bailey said he sees an opportunity for companies to meet the targetsthrough technological innovation.

"Ifwe give them the flexibility and the room to maneuver, they'll find innovative,creative technologies that will allow them to meet the new targets. That cycle'sbeen proven over and over and over again," Bailey said. "Part of ourrole is to continue to advocate for that kind of approach rather than a moreprescriptive approach which actually dictates all the detailed steps that acompany has to go through to comply."

Thegovernment also announcedthat all coal-fired power plants in the province would close by 2030. The AERdoes not directly regulate the province's power industry, but Bailey said histeam is working to ensure that the costs of cleaning up coal mines that maycease to operate as part of that transition are not put onto Alberta citizens.

"It'san uncomfortable time, because it's a dramatic change that the government'striggering, and we're not yet clear on what that path looks like for an orderlytransition to where many of those coal mines won't be operating," he said.

Giventhe low price of oil, Bailey said the AER has taken the opportunity to bring inexperienced, knowledgeable staff to get ready for when the industry picks backup again. In the meantime, Bailey said the agency is working on automation ofcertain certification processes and other efficiencies.