ABOUT THE AER

1annual report
executive summary

Annual Report Executive Summary 2015/16

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ABOUT THE AERPRIMARY/ENHANCEDRECOVERY PROJECTS(IN SITU)

EXPERIMENTAL
PROJECTSKILOMETRES OF PIPELINESGAS PROCESSING PLANTSOIL FACILITIESGAS FACILITIESTHERMAL/ENHANCEDIN SITU PROJECTSOIL SANDSMINES

BITUMENUPGRADERS

COAL
PROCESSING PLANTS

PRODUCING
COAL MINES

WHATWE
REGULATE

OPERATING NATURAL GAS & OIL WELLS

Alberta Energy Regulator

ABOUT THE AER

1ABOUT THE AER
The Alberta Energy Regulator (AER) is the single provincial regulator for oil, natural gas, oil sands, and coal development in Alberta. The AER ensures the safe, efficient,orderly, and environmentally responsible development ofenergy resources. This includes allocating and conserving
water, managing public lands, and protecting the environment while securing economic benefits for all Albertans.
This means that in almost all cases, companies deal with
the AER alone when developing or proposing to develop
Alberta’s energy resources. It’s our job to make certain that
Alberta’s oil, gas, bitumen, and coal are developed andtransported in ways that don’t• place people at risk;• harm our air, water, land, or biodiversity; or• waste these valuable energy resources.
We determine when, where, and how the energy industry
may use water, and we make sure that energy development
doesn’t harm Alberta’s water; we regulate any energy development that occurs on provincial lands; and we makesure energy development doesn’t damage any aspect ofour province’s environment.
We are part of a broader government system making
sure that Alberta and its citizens receive full value for ourenergy riches.

OUR RESPONSIBILITIESFew organizations on this planet steward such a large andvaried mix of energy resources and infrastructure as the
AER. We oversee some very large established reserves:• 1.8 billion barrels of conventional oil• 165 billion barrels of bitumen• 29 trillion cubic feet of natural gas• 37 billion tons of coalThat’s a lot of energy, and it requires a lot of infrastructure
to produce, mine, process, and move to markets. We’re responsible for regulating this infrastructure, including pipelines, wells, processing facilities, in situ projects, bitumen
upgraders, and coal mines and 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, and without waste.
• We review applications and make decisions on proposedenergy developments (over 47 000 applications in fiscal
2015/16).
• 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 some 1200 inspectors, technical staff, scientists, investigators, stakeholder
engagement specialists, mediators, lawyers, regulatory
experts, and other employees in 15 locations around
Alberta.

ALBERTA’S SINGLE ENERGY REGULATORThe Government of Alberta created the AER in 2013 when
it proclaimed the Responsible Energy Development Act.
We were formed by combining the Energy Resources Conservation Board and Alberta Environment and Sustainable
Resource Development (now Alberta Environment andParks), itself created by a merger of two government ministries shortly before the AER came into existence.
The AER’s role is to develop and enforce rules and regulations around energy development, taking direction fromgovernment policy.

WHAT WE DON’T REGULATEThe AER’s authority is limited to activities that relate to oil,bitumen, natural gas, and coal development. We have noauthority over any of the following:• any aspect of electricity generation or distribution, including renewable energies, gas utility pipelines, and theprice of natural gas (these are regulated by the Alberta
Utilities Commission)• gasoline or any other refined petroleum products, or• oil and gas pipelines that cross provincial or international borders (these are regulated by the National Energy
Board).

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ABOUT THE AER

2015/16 REPORTING ON OUR RESULTS
To become an excellent regulator and to deliver on thepriorities set out in our strategic plan, we must achieve
results and report on our progress. This means demonstrating how we’ve ensured public safety and protected
the environment, how we’ve been effective and efficient inensuring compliance, how we’ve engaged our stakeholders, and whether Albertans are confident in the AER.
As we developed our strategic plan, we identified performance measures and targets that align with our priorities;

OUTCOME

Volume of all water (fresh, saline, andrecycled) used for oil, oil sands, andgas operations

PROTECTIVE
Develop an integrated
whole-systemregulatory approach

MEASURE

Effective management ofpublic safety and cumulativeenvironmental risks and impacts

Volume of gas flared and vented
from oil and gas operations

Proportion of inactive wells thatmeet current suspension requirements

EFFECTIVE
Strengthenrisk-based
regulation

Effective management of resource
conservation and minimize financial
liability on Albertans

Number of incidents per kilometre ofpipelines regulated by the AER

Regulatory process efficiencies

EFFICIENT
Transform
Alberta’s energy
regulatory system
to improve
efficiency

Adoption of risk-based regulation to
respond to changes in technology andcomplexity in oil sands development

The regulatory system is efficient,minimizing duplication, with highly
efficient processes, and onlyintervening to the level necessary

Relevant regulatory requirements

Improve efficiency of AER
application decisions
Percentage of Albertans confident
that oil and gas development isoccurring responsibly

CREDIBLE
Increase trust andconfidence in how
energy is developedin Alberta

Stakeholders are confident
about how energy isdeveloped in Alberta

Stakeholder rating of AER
performance in key areasof concern
Recommendations for best-in-classperformance are developed throughstakeholder collaboration
Highly skilled andengaged employees

Alberta Energy Regulator

ABOUT THE AER

these are guideposts to help the AER define success anddemonstrate the results of our actions.

to define and achieve regulatory excellence, and how todeliver a strategic plan that allows us to adjust to shifting
circumstances.

Our 2014–17 strategic plan was designed to help us achieve
our vision and address new risks and challenges in energy
development. We have learned much about adapting tochanges in technology and stakeholder expectations, how

The AER has come out with a 2016–19 strategic plan that is
updated each year and that will ensure we remain adaptable and deliver clear outcomes and measurable results.

TARGETSTATUSWork with Government of Alberta (GoA) to
set benchmarks and requirements for reductionof water use for energy resource development

In progress: Consolidated water data and compiled
hydraulic fracturing and in situ oil sands volumes aspart of a multiyear program.
In progress: Drafted Directive 085 and gatheredindustry feedback to establish standards.

Reduce overall tailings

3

Flaring levels are within provincial guidelines

Target met: We continue to monitor flaring levels andfocus on venting compliance.

AER expertise is provided to support the GoA’s
Integrated Resource Management System (IRMS)

Target met: Multiple deliverables completed/ongoingto support IRMS.

100% of high-risk inactive wells meet
AER suspension requirements

Target met: All high-risk, inactive wells were compliant
by August 2015. Monitoring continues.

No unintended loss of reservoir containment

Target met: Reservoir containment restrictions
incorporated in regulatory decisions.

Pipeline incident rate reduced by 4%

Target met: Pipeline incident rate reduced by 27.78%(1.17 per 1000 km).

$400 million in cost savings fromefficiency initiatives in 2015

Target met: $411–$448 million in savings throughNear-Term Action Plan and other efficiency initiatives.

Complete a full regulatory review to identify
and execute opportunities for consolidationand simplification

On hold: Ongoing reviews and implementation of
improvement opportunities.

Establish final New Activity Life-Cycle Approach(NALA) blueprint to be approved by June 30, 2015

Target met: NALA implementation
charter approved in 2015.

10% increase in awareness of the AER and its role
in regulating energy development in Alberta

Target met: Awareness of the regulator increased from
41% in 2014 to 50% in 2015 as reported in the AER Surveyof Albertans and Stakeholders.*

10% increase in positive perceptions/rankings of
AER performance

Ongoing: 82% (an increase of 6.4%) of Albertans report confidence
in the regulator’s ability to fulfil our mandate. Stakeholders
reported confidence rates at 77% (an increase of 4%); however,these rankings varied amongst specific stakeholder groups.*

Completion and release of recommendationsin 2015

Target met: Penn Program on Regulation’s final
framework for regulatory excellence released andstakeholder feedback gathered in fall of 2015.

Establish a baseline in 2015, with an increasein the rating in 2016

Target met: 2015 employee engagement survey
completed with 81% response rate.
* Numbers tied to 2017 target.

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ABOUT THE AER

Brought to life morethan 1 billion years ofAlberta’s geologicalhistory with the new
AGS website

TO

82%

77%

1 000 000 000

YEARS

Saw public confidence levels in the AER
increase from 77 to 82 per centHIGHLIGHTS
2015/16
7
Sought stakeholder feedback
on Draft Requirements for
Hydrocarbon Emission Controls
and Gas Conservation in thePeace River Area

6

Carried out 7 compliancesweeps with 358 inspectionsin the Peace River area

12

Created a dashboard with 6 outcomesand 12 performance measures to reporton progress in reducing flaring, venting,and incinerating, and increasing gas
conservation in the Peace River area
Alberta Energy Regulator

358

ABOUT THE AER

5100
Introduced the Integrated Compliance
Assurance Framework, which outlines
how we ensure companies arefollowing our rules

35

Inspected 100 energy-related
dams as part of the AER’s dam
safety inspection program

16

Hosted 35 delegations from 16
different countries, including
one from Mexico led by thatcountry’s energy minister1500+
Welcomed feedback from 1500+ people
on the AER’s proposed model to achieve
regulatory excellence$200
MILLION
Generated $200 million in annual
savings to industry as a result ofchanges made to Directive 017

Launched Conversations That
Matter, an animated video series
that explains complex energyrelated topics in a unique way—
viewed almost 60 000 times
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ABOUT THE AER

BUILDING BRIDGES WITH ALBERTANS THROUGH ADR
ADR RESOLUTION RATE

past
12 years

8095%

Swiss psychologist Carl Jung once said that the mostintense conflicts, if overcome, leave behind a sense of security and calm that is not easily disturbed.
That’s why alternative dispute resolution (ADR) has
become such an important tool for the AER and its stakeholders.
ADR refers to alternate means of resolving disputes
outside of a hearing or a courtroom. It’s an umbrella termthat includes negotiation, mediation, facilitation, arbitration, and conciliation. Interest-based mediation is the approach commonly used at the AER and it brings parties
together to communicate, understand the issues behind a
dispute, and work together to come up with a mutually acceptable resolution, while maintaining a good relationship.
ADR was developed to help people resolve disputes—in
this case, disputes related to energy development andactivity. ADR can be used at any stage in the regulatory
process: prior to companies submitting an application to
the AER, during the application review process, when a file

Alberta Energy Regulator

is referred to the hearing commissioners for a hearing, or
when reclamation or operational concerns arise.
Parties may choose direct negotiation, mediation or facilitation with AER mediators, or enlist the service of independent third-party mediators. The mediator ensures
all parties are heard and all points of view are considered,helping to create collaborative, mutually acceptable solutions, no matter how complex the topic might be.
“In 2015, we saw a rise in ADR with municipalities and disputes involving three or more parties,” said Anna Rose,
ADR practice lead with the Alberta Stakeholder Engagement branch. “These files tend to take weeks or months
rather than days to resolve; emerging issues include water
usage, hydraulic fracturing, proximity to communities, andexcessive noise.”
The following principles apply to all mediation conductedby AER staff mediators and hearing commissioners:• ADR is confidential and without prejudice• Responsibility for resolution rests primarily with thepartiesABOUT THE AER

7“THANKS TO THE CAREFUL HANDLING AND CALM DISPOSITION OF OUR ADR REPRESENTATIVE, WE GAINED AN UNDERSTANDING OF BOTH SIDE’S POSITIONS. ADR GUIDED US TO
A PLACE WHERE BOTH THE COMPANY AND WE, THE LANDOWNERS, COULD BE CONTENT
WITH THE RESOLUTION. WE ARE HAPPY WITH THE RESOLUTION, BUT EXCEEDINGLY HAPPYWITH THE KNOWLEDGE THAT THE ADR TEAM BROUGHT TO THE TABLE.”—ROY AND MELANIE SCHULZE• Parties are fully informed of the ADR process and theiroptions• Mediators are impartial• The procedures are fair to all parties

Continuous improvement is also an important part of the
ADR program, as we look at new ways to strengthen bonds
between our stakeholders, including indigenous communities.

ADR specialists are found in AER locations across Alberta
and in the hearing commissioners’ office. They are trainedin conflict management; many hold professional designations in mediation, and all adhere to a strict code of ethics.

“Our team is currently working on best practices whenworking with indigenous peoples,” confirmed Rose. “Thisincludes a variety of ADR models such as transformativeand narrative mediation and indigenous processes for conflict resolution like sharing circles.”Over the past 12 years, they have maintained a resolution
rate of 80–95 per cent, travelling all over Alberta to resolve
disputes in homes, community halls, even restaurants—
anywhere the crucial conversations need to take place.
ADR by hearing commissioner is for files referred to thechief hearing commissioner for a hearing. This process provides the option for agreements reached at ADR to form
part of the regulatory decision. Hearing commissioners
may also conduct evaluative mediation or binding decision
making. Parties can use the process to agree on mattersfor a hearing, such as procedural matters, statements offact, and expert witnesses. Parties who think their disputeis destined for a hearing have the opportunity to request
ADR by hearing commissioner.

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ABOUT THE AER“WE WORK IN ONE OF THE MOST STRINGENT REGULATORY ENVIRONMENTS
IN THE WORLD, AND THE AER’S DAM SAFETY PROGRAM REFLECTS THAT.
WE RESPECT THE GUIDANCE PROVIDED AND UNDERSTAND THE PROGRAM
IS PUTTING SAFEGUARDS IN PLACE TO ENSURE ALL DAMS IN ALBERTA ARE
MAINTAINED IN A SAFE AND EFFECTIVE MANNER.” —SUNCORDAM INSPECTIONS

Nov.

2015 55 31 14
the AER inspected

Alberta Energy Regulator

oil sands
operations

coal mines

oil and gas
operations

only

1

significant
deficiency

ABOUT THE AER

9SHORING UP DAM SAFETY
When you’re tasked with protecting dams related to oiland gas development, the last thing you want to do ishold back, especially when you’re trying to hold everything back.
So when the Auditor General of Alberta asked for thecreation of a new dam safety program in 2015, the AER
promised it was going to be robust, efficient, and relevant
for the future. An Auditor General’s report recommended
that a reliable registry of dams be maintained, risks andconsequences of dam failure assessed, and regulatory activities reported. It also requested that deficiencies at containment facilities be corrected or managed immediately.
Most of the structures in the AER’s jurisdiction hold process
fluids and tailings from mining operations, so the impact ofa breach or dam failure would be a major concern.
Armed with a series of recommendations, new information,and unwavering determination to meet our standards, theAER was ready to build a watertight dam safety program.
Despite the fact that owners are responsible for the safetyof their dams and for complying with regulatory requirements, the regulatory oversight was new territory for the
AER, so we had to become experts in dam design, construction, and operations.
Once our initial homework was done, we establishedcontrol measures based on the full life cycle of each facility. And then we began assessing risk and building inspection guidelines related to consequence ratings along with
operator history and performance.

resources to them,” explained Santiago Paz, one of the
AER’s dam safety engineers. “This means more frequent
inspections, audits, and performance reporting by dam
owners. From a best-practice perspective, higher-risk facilities require higher design standards and a more thoroughdesign review.”
With the structure in place to inspect the full spectrum offacilities in our jurisdiction, it was time to put it to the test.
In November 2015, we released our findings from the firstseries of dam inspections. We focused on signs of potential failure of a structure, including indicators of potential
spillage, slope instability, internal and external erosion,
ground settlement, and groundwater contamination.
We sent both geotechnical engineers and general inspectors to ensure specifications in each facility were being
properly assessed. If poor performance was discovered
during any inspection, we continued to monitor the facility and provided direction to the owner. If a facility was
performing well, we scheduled fewer future inspections.
Inspections of structures at 55 oil sands operations, 31 coalmines, and 14 oil and gas operations structures revealed
only one significant deficiency.
Although we’re happy with the results, we know this issimply the beginning of an important new regulatory function. But with the foundation of our dam safety program
now in place, we’re confident that we have exceeded therecommendations from the auditor general’s report, andwe will continue to strengthen the program.

“The AER’s Dam Safety Program addresses higher-risk facilities, like tailings ponds, by applying more regulatory

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ABOUT THE AERLEADER OF THE PACK
Rondine Cabot, a 10 year veteran of the AER’s inspection
team, drops her four-year-old daughter off at daycare andclimbs into her pickup to begin her commute to work.
But today’s drive isn’t into her office in Edmonton; it’s toinspect a high-risk sour gas facility near Fox Creek and an
indigenous reserve.
Two days earlier, Rondine began her intensive investigation into the facility by checking Government of Alberta
software programs for things like the company’s Water Act
approval to identify its maximum withdrawal rate and any
environmental protection conditions the company mustmeet above and beyond the standard requirements.
She also combed through old records to see where theenergy operator had been deficient in the past, if there had
been any public complaints, and how they’d fixed those
problems.
Those old inspection and complaint records are kept in an
AER software program that details every piece of energy
infrastructure in the province. The program identified thisfacility as high risk because it processes a high concentration of lethal sour gas.
“We look at everything,” she said. “We start with anythingthat may affect public safety and go from there.”As Rondine makes her way northwest, she considers herplan of action for inspecting the site. The most important
thing she’ll look for: that the company has measures inplace to protect the public and environment if something
goes wrong.
“When I first get to a site, I look at the signage so the public
can call them to respond if there’s an emergency,” Rondine
said. “People need to know whose facility it is without
having to go on the site.”Rondine pulls off the highway onto gravel roads, knowingthat although she’s here to inspect the facility, if there’s
an oil and gas emergency nearby, she’ll be responding tothat instead.
Alberta Energy Regulator

ABOUT THE AER“WE HAVE THE AUTHORITY TO SHUT A

11

So the inspection begins and Rondine has become theleader of the pack.

COMPANY DOWN. THERE ARE A LOT OFTOOLS AT OUR DISPOSAL TO MAKE SURE
ENERGY COMPANIES FOLLOW THE RULES:

Nearly four hours later, after explaining numerous AER requirements to the operators, Rondine’s inspection is complete. The facility has some minor deficiencies, but nothingthat put the public at risk. Rondine will have to check in onthem again soon to make sure they’ve been fixed.

WARNINGS, MORE INSPECTIONS OF THEIR
And if it’s not?

FACILITIES, FINES, ETC.”— RONDINE CABOT, AER regional coordinator“We have the authority to shut a company down. There area lot of tools at our disposal to make sure energy companies follow the rules: warnings, more inspections of theirfacilities, fines, etc.”“If there’s an emergency, the first thing we do is make surethe operator has enacted their emergency response plan.
But we always send the person that’s closest to respond.”
Thankfully, major incidents in the energy industry are rare;
there were just four well blowouts and 1.17 pipeline spills forevery 1000 km of pipeline in the province in 2015.
As she inches her way up the rutted, muddy lease road in
her pickup, our logo is immediately recognizable to themen in blue coveralls and hard hats working at the plant.
And as Rondine steps out of her truck in her light grey,
AER-branded personal protective equipment; she stands
out in stark contrast.
Rondine makes her way to the office on site. The plant
manager stands from his desk, shakes her hand, and introduces himself.
“We’re usually received by operators very well,” Rondine
says. “They understand my job isn’t to get people into
trouble; it’s to help them find areas where they can
improve.”

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ABOUT THE AER

DRIVERS FOR CHANGE
We know that our stakeholders play a crucial role in
the regulatory process, and through our work on theMultistakeholder Engagement Advisory Committee
and discussions about regulatory excellence, we havelearned a great deal about the importance of building
stronger relationships and working collaboratively with
Albertans, indigenous peoples, and stakeholders.

There’s little doubt that the energy development landscape has changed just as the economic reality of persistent low oil prices has impacted the industry we regulate. Regardless of the economics, we must ensure we
protect what matters to Albertans—public safety and theenvironment—while responding to new technologies andchallenges.
Change happens rapidly in the energy sector. Consider
where we were in 2000: in situ development was just beginning and we had a customer on our southern borderthirsty for our crude. Stakeholder concerns were local andusually limited to those directly impacted by development.
In a province dominated by conventional oil and gas development, we focused on prescriptive regulatory approaches that addressed known risks and historical issues, andthat worked pretty well.
Today in 2016, our biggest customer has become a majorenergy producer—in 2014 the United States posted thelargest production increase on the planet and reduced its
demand for imported oil. Oil prices continue to slump as
demand declines while the global community questions
the use of fossil fuels and demands action on climatechange. Add to that the focus on Alberta’s oil sands bynews outlets and social media that has thrust us onto theworld stage.

Alberta Energy Regulator

Then we have advances in technology, putting multistage
hydraulic fracturing and in situ development at the forefront as single wells are replaced with largescale projects that bring new challenges, risks, and opportunities.
If Alberta is to address new technology, meet changing
stakeholder expectations, and compete in the global
market, we must change how we operate.
When the government brought together three strong regulators to form the AER in 2013, it was about building an
entity capable of ensuring public safety, protecting theenvironment, managing cumulative effects, confronting
new risks, and seizing new opportunities. We’ve managed
the transition well, and we have accomplished much inalmost three years. But we must continue to change, seek
excellence, and work with Albertans to manage our energy
resources today and beyond.
We must ensure Albertans are protected from the environmental and financial consequences of inactive or
abandoned wells as companies grapple with the realityof low oil prices, and in some cases face bankruptcy. We
must protect our water resources. We know that our stakeholders play a crucial role in the regulatory process, andthrough our work on the Multistakeholder Engagement
Advisory Committee and discussions about regulatory
excellence, we have learned a great deal about the importance of building stronger relationships and working
collaboratively with Albertans, indigenous peoples, andstakeholders.

ABOUT THE AER

13

AN EVOLUTION—OUR 2016–19 STRATEGIC PLAN
The AER has had to adapt to changes in technology andstakeholder expectations, define and achieve regulatory
excellence, and deliver a strategic plan that allows us toadapt to shifting circumstances yet keeps us focused on
our vision:
The Alberta Energy Regulator is recognized for regulatory
excellence, ensuring the safe, environmentally responsible
development of energy resources for the benefit of allAlbertans.
Regulatory excellence is the overarching theme of ourwork—the day-to-day delivery of our mandate and our
focus on a strategic plan that moves us closer to being
truly protective, effective, efficient, and credible.
We have a clear strategy to reach our vision of regulatory
excellence, and to deliver results for the AER and our many
stakeholders—the people who live here. The 2016–19 strategic plan helps us identify our key priorities and establish
clear performance measures to ensure we stay on trackand demonstrate our results.
This plan is updated each year and is designed in a waythat allows us to respond to new challenges and take advantage of emerging opportunities.
The AER understands that we must ensure energy resources are developed• safely, to protect the public;• responsibly, to protect the environment; and• efficiently to manage the costs of regulation.
It reflects our mandate and helps drive us to our vision by
being protective, effective, efficient, and credible.

EFFECTIVE
To be effective, we must regulate development in a waythat reduces risk and ensures Albertans reap the economic
rewards of our energy resources. The AER will continue toapply our risk-based approach, where higher-risk activities
receive the greatest attention. This includes focusing on
aging infrastructure and pipeline safety.

EFFICIENT
An efficient regulatory system that ensures safety andenvironmental requirements can help create a competitive climate that attracts investment. Our efforts to be
more efficient are not just about saving money, but also
reducing duplication and finding better ways to ensure ourrequirements are met. To do this we’re focusing on regulatory efficiency and stakeholder savings and improving
AER decisions.

CREDIBLE
Albertans have told us they want an energy regulator that
protects the public and the environment and that enforces
the rules. Reporting on the results of our work and improving how we involve our stakeholders will help us earn
and keep public confidence. To meet these expectations
we will focus on effective engagement, pursing regulatory
excellence, and continuing to play a key role in the Government of Alberta’s Integrated Resource Management
System (IRMS) by collaborating with our IRMS partners.
While our strategic plan helps us focus on our key priorities, we know that circumstances can change rapidly. The
AER will continue to refine and amend our plan to respondto new challenges and opportunities while making sure wedeliver on longer term targets and commitments.

PROTECTIVE
We vow to protect the public and the environment by focusing on meeting clear targets that result in sustainable
water use, improve environmental performance, manage
cumulative effects, and address climate change.

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ABOUT THE AER

OUR 2016–19 STRATEGIC PLAN
The AER is responsible for ensuring that the public andthe environment are protected. We have a clear strategy to fulfil our mandate, reach our vision of regulatory
excellence, and deliver results for Albertans, indigenous
peoples, and our many stakeholders.

STRATEGIC PRIORITIESTo develop our new 2016–19 strategic plan, we examined
the work we need to focus on based on our four pillars
of protective, effective, efficient, and credible. The plan
includes our strategic priorities, outcomes, and performancemeasures to ensure we stay on track and demonstrate
our results.

STRATEGIC OUTCOMES

FOCUSED OUTCOMES
Sustainable water use

PROTECTIVE
Develop an integrated
whole-systemregulatory approach

Effective managementof public safety, andcumulative environmental
risks and impacts

Reduce fluid tailings accumulation
over mine life
Climate change – reduce
methane emissions
Climate change – 
oil sands emissions

EFFECTIVE
Strengthenrisk-based
regulation

EFFICIENT
Transform Alberta’s
energy regulatory system
to improve efficiency

Effective managementof resource conservationand minimize financial
liability on Albertans

Reduce aging inventory liability

Pipeline safety

The regulatory systemis efficient, minimizing
duplication, with highly
efficient processes, andonly intervening to thelevel necessary

Regulatory efficiency

Effective engagement of Albertans,indigenous peoples, and stakeholders

CREDIBLE
Increase trust andconfidence in how energy
is developed in Alberta

Stakeholders are
confident about
how energy isdeveloped in Alberta

Achieve regulatory excellence

The AER is an integral partner in the
Integrated Resource Management System

Alberta Energy Regulator

15

ABOUT THE AER

Ensuring water is used in a sustainable fashion, reducing
the inventory of aging infrastructure, lowering methane
emissions, making certain pipelines operate safely, and effectively engaging our stakeholders and all Albertans are
just a few of the outcomes we will work to achieve in the
2016–19 strategic plan.

We will be updating this plan every year to ensure we canadapt to the changes taking place around us—from newtechnology to evolving stakeholder expectations—all while
demonstrating how the AER’s work ensures the safe, environmentally responsible development of Alberta’s energy
resources.

PERFORMANCE MEASURESPERFORMANCE TARGETS

Volume of all water used (by source) for hydraulicfracturing, enhanced oil recovery, in situ oil sands,
and mineable oil sands

Public reporting of water use by industry

Total annual volume of fluid tailings, treated fluid
tailings, fines captured

Ensure industry complies with establishedperformance standards

Volume of methane emissions

VISION

Support multistakeholder engagement process tofacilitate early action on methane reduction
Ensure industry complies with establishedperformance standards
Establish a tracking and reporting system foroil sands emissions

Complete a risk assessment of energy-related
infrastructure by March 2018

Address high-risk items as they are identified

Number of high-consequence pipeline incidents

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

Stakeholder savings resulting from reduced
regulatory burden that does not negatively
impact the environment or public safety$100 million in savings to stakeholders infiscal 2016/17

Improve efficiency of AER application decisions

Conduct two pilot projects to evaluate the proof
of concept for the single application and approval
process by March 31, 2017

Percentage of Albertans aware of the AER who
express confidence in the organization’s ability tofulfil its mandate

80% confidence score

Incorporate key attributes of regulatory excellence

Begin implementing the AER model for
regulatory excellence

Level of skills and competencies

Address high-priority skill and capability gaps
through the implementation of a Centre ofRegulatory Excellence in 2016/17

Employee engagement

Achieve 83% engagement in 2016/17

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

The AER is recognized for regulatory excellence, ensuring
the safe, environmentally responsible development ofenergy resources for the benefit of all Albertans.

Volume of oil sands emissions

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ABOUT THE AER

OUR PATH TO EXCELLENCE
From the time the AER was created, our vision was toachieve excellence, to strengthen and improve Alberta’s
regulatory system.
To accomplish this, we knew we had to define what excellence meant, so we turned to the experts: the researchersat the University of Pennsylvania’s Program on Regulation(PPR) and Albertans.
In November 2014, we began working with PPR to help
identify the key attributes of an excellent regulator, understand how the AER can adopt these attributes, andmeasure our progress. Realizing that we needed the inputof our stakeholders, PPR hosted a series of dialogues inthe spring of 2015 that allowed us to tap into the knowledge of Albertans, indigenous peoples, and our diverse
stakeholders.
This approach allowed us to learn from both academics
and experts in the field of regulation while understanding
what excellence means to Albertans.
Seeking to state our intent to be “excellent” isn’t a newconcept, however, we wanted to do more than an internal
assessment of our work; we wanted to show leadershipand invest in a universal model, one that could be sharedwith regulators the world over.
In fall 2015, the final, peer-reviewed report was released,
entitled Listening, Learning, and Leading: A Framework forRegulatory Excellence, that identified three core attributesof an excellent regulator—empathic engagement, utmost
integrity, and stellar competence—and presented a modelof regulatory organization, action, and performance.
The PPR report brought many things to light, including
the need to tailor the findings. It also became clear to us
that we needed to make sure we understood the findings
and develop a made-in-Alberta version of this framework
for regulatory excellence. Our next step was to go back to
the dialogues and ask for honest feedback from Albertans
and stakeholders on how we were performing against theexcellence framework and where we could improve.

Alberta Energy Regulator

People overwhelmingly supported the model and provided an honest assessment of our priorities, gaps, and performance. We learned that we can• be more open and transparent;• better explain how decisions are made and the reasonsfor our decisions;• improve our relationships with Albertans, indigenous
peoples, and stakeholders;• clarify our internal processes and priorities, including
employee roles and responsibilities; and• ensure that our employees have the skills and tools theyneed to carry out their responsibilities.
We learned that there are areas where the model neededto adapt to our specific circumstances; we heard that wemust measure our performance and deliver on key outcomes to be successful.
Based on this feedback, we developed a model that provides us with clear definitions for utmost integrity, empathic engagement, and stellar competence, and shows
how we can put those attributes into action. This, in turn,allows us to drive industry to protect public safety and theenvironment, while still securing economic benefits.
From the outset, this initiative was about more than receiving a title of excellent; it was about becoming a regulator
that continually improves its work, builds strong relationships, and leads the next era in energy regulation. Excellence is the means of creating a strong, fair, transparent,
and inclusive regulator that delivers measurable outcomes
for this province.

ATTRIBUTES FOR EXCELLENCE

Empathic
engagement

Utmostintegrity

StellarcompetenceABOUT THE AER

orderly, and environmentally
responsible development ofhydrocarbon resources
over their entire life cycle.
This includes allocating andconserving water resources,

To regulate Alberta’s energy

our vision

ensures the safe, efficient,

our mission

our mandate

The Alberta Energy Regulator

The Alberta Energy Regulator

17

resources by protecting whatmatters most to Albertans—public safety, the environment,
and economic value.

managing public lands, andprotecting the environment
while providing economic
benefits for all Albertans.

is recognized for regulatory
excellence, ensuring the safe,
environmentally responsible
development of energy
resources for the benefitof all Albertans.

Annual Report Executive Summary 2015/16

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ABOUT THE AER

ALBERTA ENERGY REGULATOR

www.aer.ca

Head Office
Suite 1000, 250 – 5 Street SW
Calgary, Alberta T2P 0R4@aer_news

inquiries
1-855-297-8311

www.youtube.com/
user/ABEnergyRegulator

inquiries@aer.ca
24-hour emergency
1-800-222-6514

Alberta Energy Regulator

www.linkedin.com/company/
alberta-energy-regulator