Escalating Enforcement

The first step in following the rules is understanding what they mean and how you need to act. This premise is key to how the Alberta Energy Regulator (AER) approaches its work to ensure oil and gas companies follow the rules of energy development.

However, when companies fail to do the right thing, the AER has a range of actions they can take to help turn things around. Recently, the AER announced enforcement action against three different companies, Sanling, Mojek, and Land Petroleum.

“When noncompliances are discovered, we work with companies to get them back into compliance. We always try to educate industry on the rules first. However, we can also send warning letters, issue orders, apply administrative penalties, or refer to prosecution,” says Blair Reilly, director of enforcement and emergency management. “We can also suspend their licence, if the situation warrants it, which prevents the company from operating, producing – and making money.”

The AER frequently checks in with companies to ensure they are following the rules and requirements of their approved activities. AER staff conduct regular inspections and audits of oil and gas sites, facilities, and pipelines, and these can lead to compliance issues being discovered. Additionally, any member of the public can alert the AER if they suspect a company is not following the rules, and we follow up on every one of those complaints. 

The AER has a set of principles laid out in the Integrated Compliance Assurance Framework that guides all of our compliance assurance activities. This guides regulatory staff on how audits, inspections, and investigations work to verify compliance and what tools should be used. 

“Our objective with compliance assurance is to change behaviours. We use a combination of education and prevention to help industry understand how to follow our requirements, and that works 95 per cent of the time. For the rest, we have to use regulatory tools to incite the behaviour to change.”

- Jeff Toering, senior advisor, compliance assurance.

One of the AER’s principles is to be fair and transparent with enforcement activities, so when a noncompliance is found, the first step is to inform the company. Every company is required to let the AER know when they are out of compliance and describe how they will get back in compliance. Most of the time, if the plan is reasonable and the AER’s experts agree, then no compliance action is taken, as long as the company comes back into compliance.

If, however, the company’s plan is not reasonable, or there is an urgent need to take action due to a public safety or environmental issue, then the AER will determine what type of enforcement is most appropriate for the situation. 

“Taking away licences is a last resort,” says Reilly. “But when an operator fails to comply with an order or multiple orders, and the regulator loses confidence in that operator, we have to do what’s right for the public and the environment.”

External News Coverage

Calgary Herald: Alberta Energy Regulator suspends SanLing Energy operations over cleanup failures
CTV News: Calgary company fined $80K for blocking province from accessing natural gas site
Global News: Alberta Energy Regulator orders takeover of Mojek Resources’ wells, pipelines, facilities
 

Tricia Radison, Writer