1

17
18

Annual Report Executive Summary 2017/18

2

OUR
VISION

Alberta is recognized forexcellence in sustainableenergy development.

426 000†

WHAT WE REGULATEOURMISSIONThrough regulatory excellence,
the AER ensures the safe andsustainable development ofAlberta’s energy resources.

Dec. 31, 2017

OUR
MANDATEThe Alberta Energy Regulator
ensures the safe, efficient,orderly, and environmentally
responsible development ofhydrocarbon resources
over their entire life cycle.
This includes allocating andconserving water resources,
managing public lands, andprotecting the environment
while providing economic
benefits for all Albertans.

KILOMETRES OF PIPELINESOPERATING NATURAL GAS & OIL WELLS

21 000OIL FACILITIES

30 000GAS FACILITIES

210

16

PRIMARY RECOVERYIN SITU PROJECTS

60

8

THERMAL/ENHANCEDIN SITU PROJECTSOIL SANDS
MINES

‡

4

2

7

BITUMENUPGRADERS

COAL
PROCESSING PLANTS

PRODUCING
COAL MINES†In addition to inspection and incident response support for 12 000 kilometres ofpipelines
regulated
Alberta
EnergyRegulator by the Alberta Utilities Commission.
‡As of January 2018.

EXPERIMENTAL
IN SITU PROJECTS1ABOUT the AER
Alberta’s energy sector is vast and complex. It includes
crude oil, natural gas, oil sands, and coal resources, and an
extensive pipeline network that moves product to market.
Ensuring that it operates in a safe, efficient, orderly, andenvironmentally responsible manner is no simple task.
Enter the AER, Alberta’s sole regulator that energy companies must deal with as they carry out their activities.
Few organizations on the planet regulate as large andvaried a mix of energy resources as we do. We oversee
some very large established reserves:• 1.6 billion barrels of conventional oil• 165 billion barrels of bitumen• 28.2 trillion cubic feet of natural gas• 36.6 billion tons of coalThat’s a lot of energy, and it requires a lot of infrastructure
to produce, mine, process, and move it to market. We’re responsible for regulating this infrastructure, including pipelines, wells, processing facilities, in situ projects, bitumen
upgraders, coal mines, and coal-processing plants.
The Government of Alberta gives the AER authority toensure that companies develop the province’s massive
energy resources in a safe and environmentally responsible fashion, without waste:• We review applications and make decisions on tens of
thousands of proposed energy developments each year.
• We oversee all aspects of energy resource activities inaccordance with government policies.
• We regularly inspect energy activities to ensure that all
applicable requirements are met.
• We penalize companies that fail to comply with AER
requirements.
• We hold hearings on proposed energy developments.
To make it happen, the AER employs 1200 staff, including
inspectors, technical staff, engineers, geologists, scientists,
investigators, stakeholder engagement specialists, mediators, lawyers, regulatory experts, and other employees in
15 offices and field centres around Alberta.

The AER also offers two unique and world-class services:
the Core Research Centre, which collects, preserves,and displays core samples and drill cuttings datingback decades; and the Alberta Geological Survey (AGS),
which studies the world that lies beneath Alberta.

ALBERTA’S SOLE ENERGY REGULATORThe Government of Alberta created the AER in 2013 when
it proclaimed the Responsible Energy Development Act.
We took on regulatory functions that are related to energy
development and that were held by Alberta Environment
and Parks (previously Alberta Environment and Sustainable Resource Development), and we combined themwith the regulatory functions of the AER’s predecessor,
the Energy Resources Conservation Board.
The AER’s role is to develop and enforce rules and regulations around energy development, taking direction fromgovernment policy. The AER is a key partner in the government’s Integrated Resource Management System, a collaborative and coordinated approach to managing Alberta’s
environment and natural resources. Other partners are
the government departments of Environment and Parks,
Indigenous Relations, Energy, Agriculture and Forestry,and Health.

WHAT WE DON’T REGULATEThe AER’s authority is limited to activities related to oil,bitumen, natural gas, and coal development. We have noauthority over any of the following:• Gasoline or other refined petroleum products• Oil and gas pipelines that cross provincial or international
borders (these are regulated by the National Energy
Board)• Any aspect of electricity generation or distribution,
including renewable energies• The regulated rate for natural gas, which is the responsibility of the Alberta Utilities Commission (AUC)• Gas utility pipelines (again, this falls to the AUC, although
the AER does inspect these pipelines and provide
incident response on the AUC’s behalf).

Annual Report Executive Summary 2017/18

2

Alberta Energy Regulator

Created OneStop, a digital system that isrevolutionizing the way we regulate by allowing companies to submit one application for one review with one decision fora project rather than multiple processes.

Hosted about 90 international delegatesat the inaugural Regulatory Excellence
Global Summit to share information andto inspire collaboration and innovation
among energy regulators the world over.

Working with the Orphan Well Association, ensured that two critical sour
gas wells in south Calgary belonging to
defunct operator Lexin Resources Inc.
were properly abandoned.

Officially released Voices of Understanding, a book intended to help AER staff andindigenous communities draw parallels
between western and indigenous decision-making.

Released an interactive map to disclose oiland gas related pond locations in Alberta.

83 per cent of Albertans and 72 per centof stakeholders expressed confidence in
the AER.

3

Issued the Alberta Energy Industry Water
Use Performance report, which shows
the amount of water used in oil sands,
hydraulic fracturing, and other typesof energy development in order to help
improve industry performance.

Using feedback from AER stakeholders,released a new strategic plan that enhances our ability to protect the public
and the environment while continuing
toimprove Alberta’s energy regulatory
system.

Implemented four recommendations
requested by an advisory committee toimprove air quality and air-monitoring
systems at Fort McKay.

Generated $143 million in annual savings
for industry by finding efficiencies in oursystem while still ensuring public safety
and environmental protection.

Replaced Turtle Mountain’s 3600 kilograms of aging monitoring equipment.

Argued before the Supreme Court of
Canada to overturn a lower-court decision in the Redwater Energy case, which
would allow creditors and trustees ofbankrupt energy companies to walk awayfrom their obligations to clean up oil andgas sites.

Annual Report Executive Summary 2017/18

4

2018–23 strategic plan
Few set out on a long journey or begin a major project
without doing some planning first. And quite often,
circumstances change and so too must the plan.
In 2013, the AER was created and we soon got to work
developing a strategic plan that focused on four priorities:
being protective, effective, efficient, and credible. It wasunderpinned by a vision of becoming an excellent regulator.
But just as energy development has continued to evolveto adapt to new challenges, the way we regulate must also
evolve. For this reason, the AER has created a new strategic plan—one that continues to integrate the attributes ofregulatory excellence (utmost integrity, empathic engagement, and stellar competence) into all our work, sets clear
outcomes and measures, and ensures that we continue toprotect what matters to Albertans.
This strategy will help us prioritize the work we need to do
to continue to improve Alberta’s energy regulatory system.
The new strategic plan is built on an updated vision:“Alberta is recognized for excellence in sustainable energy development.”
Every day, and in everything we do, we deliver on five key
outcomes for Alberta.
1. The environment is protected.
2. The public is safe from harm.
3. The public is confident about how energy is developed
within the province.
4. The regulatory system enables economic benefit for
all Albertans.
5. Energy development in Alberta is well planned.
For the AER, sustainable energy development meansour decisions will integrate environmental, economic,
and social outcomes throughout the regulatory process. We have made great strides in incorporating thesefactors into our decisions, and this new plan will ensurethat the AER continues this work with heightened focus.
After discussions with key stakeholders, our senior leaders
created five new strategic goals for the organization.

Alberta Energy Regulator

1. The development of energy resources is managed
throughout the life cycle by integrating economic,
environmental, and social factors, and considering industry performance. This means that we base decisions
on these factors and take into account how companies
are performing.
2. The regulatory system enables the energy transition.
We enable the use of clean technologies to reduce theimpacts of energy development. Drawing on our expertise and experience, we contribute to policy development surrounding the regulation of hydrocarbons andrenewable energy sources.
3. As a modern, responsive, efficient, and effective
regulator, the AER contributes to Alberta’s competitiveness. We help make Alberta more competitive byensuring that our regulatory requirements are necessary and easy to understand in order to achieve outcomes at the lowest possible cost. We also adopt bestpractices to protect the environment and the public,
setting an example of regulatory excellence for otherregulators in Alberta and beyond.
4. Regulation of Alberta’s energy resources is improvedby actively engaging indigenous peoples, stakeholders, and the public. We listen to indigenous peoples,
our stakeholders, and Albertans, and carefully consider their values, interests, and concerns when carryingout our work. Sharing best practices with our peersfrom around the world helps us improve our regulatory
system.
5. The AER mitigates the magnitude and likelihood of
potential liability exposure to Alberta. Companies(or their receivers) fulfil obligations to properly close
inactive infrastructure and clean up the land. Industry
remains liable for orphaned assets.
These new goals are designed to ensure that we are excellent and that we continue as a protective, effective, efficient, and credible regulator into the future.
Our new strategic plan will help everyone at the AER doa better job at resourcing and prioritizing our work, allowing us to focus on what absolutely needs to get done.
It will also help AER staff recognize how their everyday
work supports our overall vision and delivers outcomesfor Alberta.

g
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Th eenergy is develo aboutphow
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MissionThrough regulatory excellence,
the AER ensures the safe andsustainable development* ofAlberta’s energy resources.

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*The overall goal of sustainable development is the long-term stability of the environment
and economy; this is only achievable through the integration and acknowledgement ofenvironmental, economic, and social concerns throughout the regulatory process.

Annual Report Executive Summary 2017/18

6

REPORTING on our results
Since the AER’s launch in 2013, we have promised that
we will be transparent and accountable. Keeping thatpromise means reporting on our results and showing
where we have made progress over the last year, where
we are meeting the goals we have set, and where we needto improve.
When we developed the 2017–20 Strategic Plan, we
examined the work we needed to focus on based on ourfour pillars: protective, effective, efficient, and credible.
The plan included our strategic priorities, outcomes, andperformance measures to ensure that we stay on trackand demonstrate our results.
What follows is just that—our performance report toAlbertans, indigenous peoples, and our stakeholders.

Alberta Energy Regulator

7

PROTECTIVE

Develop an integrated whole-system regulatory approach
STRATEGIC OUTCOME
Effective management of public safety and of cumulative environmental risks and impacts
FOCUSEDOUTCOMESMEASURETARGETSTATUS

Volume of all waterused (by source) for
hydraulic fracturing,enhanced oil recovery,in situ oil sands, andmineable oil sands

Public reporting ofwater use by industry

The Alberta Energy Industry
Water Use Performance
Report, released in May 2017,shows how water is allocatedand used to recover oil, gas,and oil sands resources.

Reduce fluid tailings
accumulation overthe mine life

Total annual volumeof fluid tailings,
treated fluid tailings,
and fines captures

Ensure industry complies
with establishedperformance standards

Tailings management plan
applications, which establish
performance requirements,
are reviewed upon receipt.

Climate change—
reduce methane
emissions

Volume of methane
emissionsSupportmultistakeholder
engagement

The Government of Alberta isleading the multistakeholder
engagement through theMethane Reduction
ONGOING
Oversight Committee.
The AER provides support.

Ensure that industry
complies with establishedperformance standards

A requirements andassociated complianceassurance plan and reporting
system is being developed.

Establish a tracking andreporting system foroil sands emissions

This is a Government ofAlberta initiative, which
the AER supported byproviding input.

Develop a framework
to manage
cumulative effects

A framework has beendeveloped, and an
implementation plan is being
executed by the AER.

Sustainable
water use

Climate change—oilsands emissions

Cumulative effects
management

Volume of oilsands emissions

Cumulative effects
are managed

TARGETMETONGOINGONGOINGONGOINGTARGET
MET

Annual Report Executive Summary 2017/18

8

EFFECTIVE

Strengthen risk-based regulation
STRATEGIC OUTCOME
Effective management of resource conservation and minimize financial liability on Albertans

FOCUSEDOUTCOMES
Reduce aging
inventory

MEASURETARGETSTATUS

Complete a risk
assessment of energyrelated infrastructureby March 2018

Address high-risk items
as they are identified

93% of wells deemed highrisk through Directive
013 are compliant.
The Inactive Well Compliance ONGOING
Program achieved 67%
compliance (an 11% increase
from the previous year).

Pipeline safety

Number of highconsequencepipeline incidents

2% reduction in
high-consequencepipeline incidents
from the previous
two-year average

26% reduction in
high-consequencepipeline incidents.
TARGETMETEFFICIENT

Transform Alberta’s energy regulatory system to improve efficiency
STRATEGIC OUTCOME
The regulatory system is efficient, minimizing duplication, with highly efficient processes, and only intervening
to the level necessary

FOCUSEDOUTCOMES
Regulatory
efficiency

Alberta Energy Regulator

MEASURETARGETSTATUS

Stakeholder savings
resulting from reduced
regulatory burden that
does not negatively
impact the environmentor public safety$100 million inincremental savingsto stakeholders infiscal 2017/18$143 million in industryverified savings in the2017/18 fiscal year.

Improve efficiency
of AER application
decisionsSingle decision-making
framework for wells,
facilities, and pipelines
available for use by
external parties not later
than December 31, 2018

Pipeline licensing wastransitioned into OneStopin 2017. Decision timelines
were reduced by 67–99%
based on the amountof review required.

TARGETMETONGOING

9

CREDIBLE

Transform Alberta’s energy regulatory system to improve efficiency
STRATEGIC OUTCOME
Stakeholders are confident about how energy is developed in Alberta

FOCUSEDOUTCOMESMEASURETARGETSTATUS

Effective
engagementof Albertans,indigenous peoples,and stakeholders

Percentage of Albertans
aware of the AER who
express confidence inthe organization’s ability
to fulfil its mandate

Maintain a confidence
score above 80%
annually

81% of Albertans are
confident that the regulator
is delivering on its mandate,
while 72% of stakeholders
express confidence, withvaried rankings among
specific groups (e.g.,
landowners, industry, andindigenous peoples).
*As the AER moves to a
new strategic plan, we willcontinue to track “overall
confidence” but will focus on
earning “strong confidence”
scores (i.e., a rating of
7–10), where we will work
to ensure that a majority ofAlbertans express strong
confidence in the regulator.

Achieve regulatory
excellence

Levels of skill andcompetency

Employee engagement

Close high-priority
skill and capability
gaps through theimplementation of theEnterprise Learning
Branch in 2017/18

Enterprise Learningtransferred to People, Culture& Learning. Priority training
program implemented.

Achieve 83%
engagement in 2017/18

Engagement survey
score 78.3%.
Leadership is addressing
areas with low scoreswith their teams. The
executive leadership teamhas identified initiatives tofocus on that will improve
employee engagement.

The AER is an
integral in the
Integrated Resource
Management
System (IRMS)

Percentage of IRMS
strategic priorities
supported by the AER100% of IRMS strategic
priorities supportedby the AER

The AER actively participatesin IRMS leadership committees
and continues to provide
dedicated support todeliver on all IRMS strategiccommon priorities.

TARGETMETTARGETMETTARGET
NOT METTARGET
MET

Annual Report Executive Summary 2017/18

10

BUNDLING our mandate
We tend to think of a mandate as a string of words—
a linear idea, maybe one that’s a little vowel-heavy. The
Alberta Energy Regulator has something like that: ourmandate is to ensure the efficient, orderly, and environmentally responsible development of energy resources in
the province.
But it takes another form, too. Our mandate is also represented in a Blackfoot bundle: a rawhide-wrapped cylinder
painted with symbols and perched on three birch poles.
The bundle is an important recognition of the AER’s
growing awareness and of our commitment to better
involve indigenous people in our decisions. Western
systems recognize us as an authority through legislationand policy, but the bundle bridges our connection to theoral system that is used traditionally by indigenous communities.
Elder Dr. Reg Crow Shoe transferred the rights to us
through this bundle in 2017 after guiding us on our journey
to write Voices of Understanding: Looking Through theWindow, a book that illustrates the parallels between
indigenous and western decision-making and worldviews.

“The concept of a bundle came out of some of our discussions with the elders,” says Elder Dr. Crow Shoe. “Elders
were trying to interpret the concept of a western visionstatement, and they started talking about how visions andmissions were reflected in an oral system.”
In whatever form it takes, a mandate speaks to relationship,
authority, and commitment. It’s important that the AER
recognize both systems of decision making: the one described in the Responsible Energy Development Act, andthe bundle that protects our mandate in the oral system.

WHAT’S INSIDE?
Inside the AER’s bundle is a copy of Voices of Understanding, an audio file of staff reading the book, and video fromthe information sessions held with the AER and Elder Dr.
Crow Shoe and elders from the regions of Treaty 6 andTreaty 8.
“A bundle is cultural material, collected,” explains Elder Dr.
Crow Shoe. “When you look at western documentation,
you have chapters. When we look at the items in a bundle,
each item is a chapter.”
The materials inside of the AER’s bundle capture what
we’ve learned from Elder Dr. Crow Shoe and protect our
mandate in an oral system. They will also serve as pointsof reference, not dissimilar to the way that an indigenous
community might use a bundle, where items are removed
from a bundle when needed, and their stories and songs
are recalled to help communities make decisions.

ARE WE READY FOR IT?
The bundle may be new, but our efforts to make written
and oral systems parallel are not.
“If I think about it,” says Elder Dr. Crow Shoe, “we’re morethan 15 years into it.”
Elder Dr. Crow Shoe has worked with us before. In 2000,
the regulator and Elder Dr. Crow Shoe collaborated towrite a facilitators’ guide to help indigenous youth understand how their traditional ways of learning and decision
making relate to western processes.

Alberta Energy Regulator

11

Inside the AER’s bundle is a copy of Voices ofUnderstanding, an audio file of staff reading thebook, and video from the information sessions
held with the AER and Elder Dr. Crow Shoe andelders from the regions of Treaty 6 and Treaty 8.

Annual Report Executive Summary 2017/18

12

In September 2017, Voices of Understanding was released
publicly. Although the book’s purpose and audience arevastly different from the 2000 document, the intent is unchanged: we are on a shared journey to understand both
systems and to work together.

“It is important that the AER staff are protected under thesame process as the bundle. We strive to reciprocate theprotection given to us to indigenous peoples in Alberta
in our own way: through documents and processes,”
Veness said.

On the day Voices of Understanding was launched, theproject team and AER executives met with Elder Dr. Crow
Shoe and Rose Crow Shoe. There, our bundle was foreverchanged. In a circle ceremony, the bundle was rubbed with
red ochre—a naturally occurring paint sacred to the Blackfoot people. This protected the knowledge and processes
behind the book.

WHAT’S NEXT?

But not only was the bundle protected that day. Elder Dr.
Crow Shoe and elders from Siksika Nation also painted
members of the project team with ochre to protect themas they move forward to spread the knowledge containedin the bundle.
“Although our CEO Jim Ellis is the bundle holder, everyone who was involved in the project is still a helper andconsidered integral in helping the organization meet its
objectives,” says Jason Veness, a senior advisor with AER’s
Indigenous Engagement Group. For his work through the
Voices of Understanding process, Veness was given a
Blackfoot name—Pitaa Maakaa, which means “eagle traveller”—for his role helping the organization understand bothindigenous oral and western systems.

Alberta Energy Regulator

In indigenous communities, bundles are transferred toindividuals who earn the right to hold that mandate bygaining knowledge and experience. In the AER’s case, thebundle will be passed on along the line of CEOs, meaning
the successors to AER president and CEO Jim Ellis will
study the knowledge we gained on this journey in order
to continue to lead the AER on its path. Only when they
understand our bundle may they participate in a traditional
Blackfoot ceremony that transfers the rights to the AER’s
bundle from their predecessor to them.
Now that the AER has received this bundle and protection,
it is important to take it to communities in other parts ofthe province—to validate our knowledge and bundle withgroups across the province.
Elder Dr. Crow Shoe explains his vision: “The bundle ispaying respect to the written and oral systems, and putting
together trust so the two systems can speak to each other.
That’s how the AER is going to move ahead.”

13

APPEALING to the highest power
In May 2016, the Court of Queen’s Bench of Alberta
decided against the AER and the Orphan Well Association(OWA) in a case that has had widespread implications on
our energy industry.
The Redwater decision, as it’s come to be known, allowed
the receiver that was managing the insolvent company’s
affairs to walk away from oil and gas wells, pipelines, andfacilities that were no longer productive. This despite
Alberta legislation that forbids leaving a mess behind forothers to clean up.
According to the AER, the decision hinders Alberta’s constitutional right to properly regulate its own resources. It
also affects all industries and regulators in all provinces.
After losing in the Alberta Court of Appeal in a 2-1 decision, the AER and the OWA continued their fight at theSupreme Court of Canada in February 2018. Leading thecharge for the AER were lawyers Patricia Johnston and
Keely Cameron. Keely described for us just how importantthe day was both for her and for Albertans.

What was the Supreme Court experience likefor you?
KC: The Supreme Court of Canada experience was incredible. The building was amazing. I had an opportunity to
be in front of brilliant judges. It was a once-in-a-lifetime
experience.

This file was extremely important to us, not only to ensure
we can actually enforce our requirements, but to also
ensure that sites aren’t being left for the Orphan Well
Association or the public to ultimately bear the costs toclean up.

Why should this issue matter to Albertans?
KC: This file goes to the core of the Alberta Energy Regulator’s role in ensuring that development occurs in amanner that is responsible and protects both the environment and the public. Part of the issue with the decision
is that it potentially breaks the foundational promise uponwhich licences are granted in the first place. It’s a promise
to ensure that at the end of the day, when the sites are
no longer required for production, they’ll ultimately becleaned up and returned to the landowners or the public
for use.

This issue is so important to Albertans, why doesit matter to you personally?
KC: Personally, for me, having a young daughter andbeing a second generation Calgarian let alone Albertan,
this matter is important not only for this generation but
for future generations to ensure that the public doesn’t
end up bearing the cost to clean up energy development
activities. Especially when we have rules in place that are
there to ensure that companies comply with those rules.

I was extremely nervous preparing for the hearing andleading up to the day before. The day of the hearing I was
actually really excited. It was such an incredible opportunity and it was great to get some finality on the matterbecause it’s been going on for so long. But I wanted toensure I was doing a good job as this was our one big
chance to share our story with the public and our final
chance to explain our position to the court.

So what is the AER’s story regarding the
Redwater issue?
KC: The Redwater file started with having a receiverwanting to be able to sell only the good assets and being
permitted to renounce the bad assets in order to avoid
the AER’s liability management requirements under legislation.

Annual Report Executive Summary 2017/18

14

CORE RESEARCH CENTRE

Facility tours
in demandin 2017

Alberta Energy Regulator

from overclose tocountries

people20 300

Any
given
day

10 000geologists, students, and evenlandowners use the space

15

MUCH more than core
Doug Hayden has spent much of his 30-plus-year careerin cubical number 153 at the Core Research Centre (CRC),
noting with pride that “it’s like I just moved in and never
moved out.”
The geological consultant occupies two cubicles filled witha high-powered microscope, trays of drill cuttings, a fluoroscope, and his computer. Off to the side lies a FedEx
box that contains rocks from South America that Hayden
points to while he talks about the reputation of Canadiangeologists.
“Companies in places like South America know that Canada
has expertise that can be applied to their oil exploration.”
So, in addition to being known for its love of hockey and allthings maple, Canada is also known for its geologists. That
is in part due to the impressive collection of core samples
and drill cuttings that are stored for anyone to study at
the AER’s CRC.

ENABLING INNOVATION
Located near the University of Calgary, the facility holds
one of the largest, most complete drilling histories in theworld. And anyone can go see this collection of almost two
million metres of core and more than 20 million vials of drill
cuttings, which is great news for rock buffs, but also forAlberta’s oil and gas industry.

This explains the high demand for facility tours. In addition
to the regular patrons, close to 300 people from over 20
countries—most of whom work for oil and gas companies
or energy regulators—passed through the CRC’s doors in
2017. Kuntz says the facility appeals to other jurisdictions
in part due to the “forward-thinking regulations” that are
the rationale behind the CRC’s existence.
“We are enablers of innovation; we are not doing the research ourselves, but we are enabling it to happen,” says
Kuntz.

A COMMUNITY OF KNOWLEDGE
Enabling this research is what keeps consultants like
Hayden working. He is quick to point out another advantage of the CRC that isn’t immediately obvious: the collaboration that happens within the building’s brick walls—aneffortless and organic phenomenon that often takes placeover coffee in the lounge.
“This isn’t just a storage facility,” Hayden says. “Learning
happens here every day by people exchanging ideas andtheories, and it’s based on the material and data that isright here.”The 200 000-square-foot space is a hub of activity. On
any given day, more than 10 000 geologists, students,and even landowners can be found spritzing water onto
columns of core pulled from the earth decades earlier or
peering into microscopes to study cuttings to help determine whether a location will yield oil-and-gas riches. This
saves both time and money.
“The access to the physical data at the CRC is a significant
competitive advantage for companies wanting to explore
for hydrocarbons in Alberta,” explains the CRC’s director,
Ray Kuntz. “Investors can come here and test their hypotheses without actually having to drill themselves.”

Annual Report Executive Summary 2017/18

16

DROP BY DROP: how much water

are companies using?
If you tracked your water use every time you turned thetap—and the results were posted for the world to see—would you change your habits?
The AER is betting that energy companies will, which was
one reason we released the Alberta Energy Industry Water
Use Report. And the results might surprise some.
Despite being one of Alberta’s biggest industries, oil andgas development accounts for a small part of the province’s water use. In 2016, the energy industry accounted
for 10 per cent of all water that was made available for use,
but it used only a fifth of that amount.

A FEW FACTS ABOUT H2O USE IN
ENERGY DEVELOPMENT
1. One is not like the other. Measuring water-use
performance involves more than examining
which company uses the least amount and which
company recycles the most. It’s also important tolook at how each company operates (i.e., mining
or in situ) and at the size and age of their projects, because each factor affects their water use.
2. Less is more. Over time and through new technologies and innovation, companies have reduced
the amount of water they need. For example,
in 2016, about 80 per cent of water used for oilsands mining was recycled from tailings ponds,
while in situ recycled 86 per cent by separating and treating water from producing wells.
3. A drop in the bucket. While recycling plays alarge role in the industry, companies can also findways to use less water by improving their operations over time, as noted in our 2017 industry
water-use report.

Alberta Energy Regulator“While companies are using far less water than what they’re
allocated, making this data available to the public encourages companies to measure themselves against their peers
and motivates them to use water more efficiently,” says
Aruna Bissonauth, the AER’s manager of Industry Performance – Mining.
The AER rolled out the report in two parts. In spring 2017,
we showed a provincial water-use summary for hydraulicfracturing, oil sands mining, in situ, and enhanced oil recovery. We then updated the report in February 2018 toshow company-specific data for oil sands mining and insitu. Future updates will show company-specific data forhydraulic fracturing and enhanced oil recovery.
About 10 per cent of all water allocated by Alberta Environment and Parks in 2016 was allocated to the energy
industry. The rest was allocated to other users such as
agriculture and irrigation (44 per cent), commercial andcooling (28 per cent), and municipalities (11 per cent).
Shannon Chmelyk, manager of Industry Performance,
noted that energy companies often use less water than
the amount they request in their applications.
“Once companies finish planning for a project, they explore
the site to gain a better understanding of where the oil,gas, or bitumen is,” said Chmelyk. “As projects become
operational, companies can find ways to use less waterby improving their operations over time, recycling more,
and knowing exactly how much they need to get theseresources out of the ground.”The report is part of the AER’s industry performance
program, which measures, evaluates, and reports onenergy development activities we regulate. In addition towater, the AER has also reported on industry’s pipeline
performance.

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AROUND THE PROVINCEHigh Level
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1200

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EMPLOYEES

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experts, & others

15

LOCATIONS

800+

COMPANIES REGULATEDAnnual Report Executive Summary 2017/18

18

ALBERTA ENERGY REGULATORHead Office
Suite 1000, 250 – 5 Street SW
Calgary, Alberta T2P 0R4
inquiries
1-855-297-8311
inquiries@aer.ca
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1-800-222-6514

www.aer.ca@aer_news

resource.aer.ca

ABEnergyRegulator

Alberta Energy Regulator (AER)

www.annual-report.aer.ca

Alberta Energy Regulator