Technology and the AER

The AER isn't typically in the business of cool, but a closer look at the gadgets we use to do our job could make even the tech-savviest do a double take.

The fact is, technology plays a critical role in helping us protect Albertans as we monitor oil and gas activities, and it is making our systems more accurate and effective.

“Technology isn’t advancing just for the sake of itself. The better we are at monitoring activity, the better we are at preventing incidents,”

Al Duben, air specialist with Surveillance & Enforcement

“Technology isn't advancing just for the sake of itself. The better we are at monitoring activity, the better we are at preventing incidents,” says Al Duben, air specialist with Surveillance & Enforcement at the AER. “And with better monitoring technology we are more prepared to better manage incidents ifthey occur.”

Eye in the Sky

Our newest aerial monitoring device—the first of its kind in North America—is the optical gas imaging (OGI) drone. It features two cameras, one of which is infrared, which enables us to see hydrocarbon gases. It allows us to measure low levels of gas that we've never been able to measure before.

The OGI also has three-dimensional (3D) modelling capability. While photogrammetry—the science of taking measurements from photographs—is not new to the AER, it previously had to be done from a plane or helicopter.

“From the palm of our hand we'll be able to see oil on the surface of water if there's a spill. The 3D mapping then enables us to predict where the oil is likely to flow so that we can actually get ahead of the spill,” adds Duben.

The OGI can also feed live information to a specialized computer that will produce 3D renderings within a couple of hours rather than days.

Laser Tag

Another new device, the laser gas detector (LGD), identifies gas by projecting infrared light through the air with fingerprint accuracy. Lightweight and portable, it's used to measure methane, which is odourless and very difficult to detect.

“Methane is important because when it's detected there's a very high chance that a lot more is going on and we've just scratched the surface of toxins,” says Blair Reilly, manager of Emergency Management at the AER.

The LGD allows the AER greater precision when targeting specific locations for investigation. Previously, we relied on complaints from the public about general areas of concern, or industry's own detection efforts, but now we have data as proof of where we need to focus our efforts.

When Voices Matter

All of our voices matter.

Whether we speak in unison or one at a time, in one language or another, in harmony or in discord, we all have the right to be heard. This is true in the classroom, in the workplace, and at home. The regulatory field should be no different.

“It's important that AER employees recognize the significant insight that the indigenous people of Alberta can bring to our processes.”

Arlette Malcolm,Director of Indigenous Engagement

We know indigenous peoples want their voices reflected in our decisions. We need to work together to find solutions while being mindful of our cultural differences. However, many of our processes fail to link western and indigenous worldviews—this prompted the AER to set out on a path to increased understanding.

We made it our mission to build a new type of working relationship—one based on trust and mutual understanding—and challenged ourselves to look beyond what we know.

Blackfoot elder Dr. Reg Crow Shoe was our guide on this journey. With his leadership and teachings, AER employees explored how indigenous processes and worldviews can complement our own. Specifically, the sessions explored traditional circle decision-making, a method that can be used to make decisions or to resolve conflict.

AER employees came to understand the ways that circle management processes are mirrored in hearings, alternative dispute resolution, and mediation processes we have in place today.

“There are applications, leaders, and proper times to speak,” says Barbara McNeil, an AER hearing commissioner. “In many ways, circle decision-making echoes what we want to achieve in mediation.”

Circle decision-making begins with an opening statement from the ceremonialist, who brings together people from the involved parties. The ceremonialist has the great honour of being the steward of the bundle—a physical and symbolic representation of the right to carry out decisions from circle processes. That right can only be transferred through ceremony.

Before discussions begin, participants cleanse their minds, bodies, and spirits in a smudge ceremony. This ceremonial practice includes lighting dried herbs in a bowl or bundle to produce smoke.

Next, each circle participant discusses the issues at hand. A second round of discussions seeks solutions. Understanding is built as participants gather in a circle and take turns speaking, facilitating a safe environment for people to share their knowledge and experiences. Each voice is equal. The circle process doesn't end until a consensus or a decision is reached.

We explored our new awareness of this process with Dr. Crow Shoe, and together we created Voices of Understanding: Looking Through The Window, a guide intended to help AER staff and indigenous communities understand how to draw parallels between western and indigenous decision-making.

In an intimate circle ceremony hosted in the AER's Govier Hall, Dr. Crow Shoe transferred the rights to the bundle containing the knowledge and process behind Voices of Understanding to AER president and CEO Jim Ellis.

Voices of Understanding prompts us to genuinely consider the way we think and work and the processes, systems, and initiatives we use. On our quest to achieving regulatory excellence, this bundle does not symbolize completion but rather a step further in our journey to awareness and validation of indigenous decision-making.

This is but one piece in the foundation as we improve our working relationships with Alberta's indigenous people. To carry this knowledge is a responsibility we are honoured to accept.

We know indigenous peoples want their voices reflected in our decisions. We need to work together to find solutions while being mindful of our cultural differences. However, many of our processes fail to link western and indigenous worldviews—this prompted the AER to set out on a path to increased understanding.

Building Relationships with Indigenous Communities

As a country, we're gaining a greater understanding of the challenges our indigenous communities face.

We can't take back the past, but our journey towards truth and reconciliation calls on us to recognize our shortcomings and work together to build a new relationship based on mutual understanding and trust. That's why the AER's Indigenous Engagement Group is figuring out how we can do more to improve our relationships with indigenous communities across the province.

Building deeper, long-lasting partnerships with Métis and First Nations communities is more than something we have to do—it's something we want to do to improve how we deliver on our regulatory mandate. Indigenous peoples steward Alberta's land, air, and water, so it's important for the AER to acknowledge the parallels between our worldviews and explore how we can work together from a place of trust and mutual respect.

Over the last year, the AER's Indigenous Engagement Group laid the groundwork for what lies ahead. Its work included delivering more indigenous awareness training sessions for AER leadership and staff, organizing a gathering of Treaty 7 and AER executive leadership, and demonstrating a collaborative approach to engagement.

Ongoing projects include working with indigenous communities on area-based regulation (ABR) and reaching out to the Woodland Cree First Nation to start a joint learning process regarding land reclamation, remediation, and indigenous traditional knowledge. These are just a few of the first steps taken to implement the Truth and Reconciliation Commission of Canada: Calls to Action and the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), and to work with communities to ensure that traditional knowledge is reflected in our day-to-day process and decisions.

We also understand that to be the change we wish to see in the world, our organization must commit to change.

“It's important that AER employees recognize the significant insight that the indigenous people of Alberta can bring to our processes,” says Arlette Malcolm, director of Indigenous Engagement. “To become an excellent regulator, we need to be able to engage empathically; this means we need to listen to and understand the values and concerns of our stakeholders, including Alberta's indigenous people. We need to build a relationship of listening, mutual respect, and trust.”

This responsibility is not without challenges. Our annual surveys of Albertans indicate that First Nations and Métis communities show less satisfaction and less confidence in the regulator than do our other stakeholder groups. It also indicated that we do not adequately address indigenous communities' concerns about the environment. We know we have growing to do.

The AER hopes to learn from indigenous people about how we can collaborate to validate traditional knowledge and traditional land-use values and link them with our existing practices. This is an essential stepping stone towards understanding and addressing cumulative effects.

The AER will also evolve its processes to better support a holistic approach to energy development—one that is mindful of both indigenous and western knowledge—in our Woodland Cree indigenous traditional knowledge and ABR projects, among others.

The AER is honoured to practise the lessons from the Voices of Understanding process and further our understanding as we look ahead at how we can move forward together.

Voices of Understanding
After listening closely to the stories shared by Blackfoot elder Dr. Reg Crow Shoe, AER staff came away with a fuller understanding of traditional decision-making models and how we can integrate them into our day-to-day processes.

Enforcing the Rules

“The AER’s investigators are peace officers; they have the authority to apply for search warrants, lay charges, and serve companies or people court summonses. These people are law enforcement.”

Greg Jones, Manager, Major Investigations Team

When companies fail to follow the AER's rules, they face enforcement. This can include shutting in operations, more frequent and detailed inspections, or more stringent planning requirements.

In some cases, it can also mean paying a stiff fine or facing prosecution.

All noncompliances are reviewed and the most serious referred to AER investigators. An AER statutory decision-maker then reviews the investigation report and decides whether enforcement is required, and which is the most appropriate enforcement tool.


“The AER's investigators are peace officers; they have the authority to apply for search warrants, lay charges, and serve companies or people court summonses,” says Greg Jones, manager of the AER's major investigations team. “These people are law enforcement.”

While prosecutions take place in a courtroom, AER investigators draft the court documents that list the charges and include a summons requiring the company to appear in court by law. Once signed by a justice of the peace, they become official, and an AER investigator delivers them, in person, to the company.

When charges are laid, both the Crown prosecutor and defence counsel get to review the entire AER investigation file. If a trial is held, AER investigators testify about their involvement in the matter. The court, not the AER, is responsible for deciding what happens; the decision to penalize a company rests with a judge.

Administrative Penalties

Another enforcement tool is a fine, called an administrative penalty. The amounts differ, but all are based on the seriousness of the offence and how it affects public safety, the environment, or production of the energy resource.

In short, the more serious the contravention and the greater the impact, the higher the penalty.

Orders Ensure Compliance

AER orders are legal documents that formally direct a specific action or actions; they can be issued for different purposes. Orders help the AER ensure that oil and gas companies operate in a safe and environmentally responsible way.

The most commonly issued order is referred to as a compliance order, which is designed to prevent, stop, or minimize environmental impacts or risks to public safety. An order may also be punitive in nature and may be used to reprimand companies that don't follow AER rules and regulations.

At the end of the day, Albertans own our energy resources, so developing them is a privilege, not a right. Every company must follow the rules to make certain that oil and gas activities happen safely.

Pipeline Performance

Pipelines have been a hot topic for some time in Alberta and across North America, with the big question being, are they safe?

In our province, the numbers show they're safer than ever. Still, the AER's executive vice president of operations knew that more could be done to improve pipeline safety, and that the solution wasn't to just craft more rules.

“We're not going to improve performance by adding more pages to the Pipeline Act,” Kirk Bailey noted, knowing that more could be done to improve pipeline safety beyond crafting more rules.

This past February, the AER released a report revealing how pipeline operators are performing—with details not only on the sector as a whole but on individual companies as well.

While the length of pipelines the AER regulates grew by 11 per cent in the last decade, pipeline incidents actually dropped by 44 per cent, with the pipeline failure rate dropping to 1.1 incidents per 1000 kilometres of pipeline in 2016 compared with 2.2 incidents per 1000 kilometres in 2007.

The AER points to stronger requirements, industry education, improvements to inspection programs, and a greater focus on pipeline safety among operators for the improvement.

The report showed that pipeline incidents dropped by three per cent in 2016 compared with 2015. Most incidents were of medium to low consequence in terms of impacts on the public, wildlife, and the environment. High-consequence incidents accounted for about 7 per cent of all incidents in 2016.

While the decline in incident rates is encouraging, the AER believes all pipeline incidents are preventable—especially high-consequences ones. Achieving this will take a big effort in many small steps; in 2017 the AER aims to reduce the two-year average of high-consequence pipeline incidents by two per cent.

The AER will continue to raise the bar each year and take action to ensure that performance steadily improves.

The pipeline report was the first to be released, but it will not be the last. The AER will issue similar reports that will cover water use in energy development and inactive wells.

To make sure pipeline incidents receive the appropriate response, the AER assigns a high-, medium-, or low-consequence rating based on criteria that consider the impacts on the public, wildlife, and the environment.

High consequence

Incidents that could have significant impact on the public, wildlife, or the environment, or that involve the release of a substance that affects a large area or waterbody.

Medium consequence

Incidents that could have a moderate impact on the public, wildlife, or the environment, and no impact on a flowing waterbody.

Low consequence

Incidents that involve little to no substance released and have little to no impact on the public, wildlife, or the environment (but no impact on a waterbody).

No matter the classification, operatorsare responsible for all aspects of incident response—from having a detailed emergency response plan in place to taking actions to remediate and reclaim a site.

Finding What’s in the Flare

Necessity is the mother of invention, or so the saying goes.

This past year, mother necessity gave birth to a study—being led by the AER and Alberta Health—into what types of substances are present during the “flowback” phase of hydraulic fracturing operations.

“Flowback” refers to the process by which fluids used to fracture a well are pumped back to the surface after hydraulic fracturing is complete. Separators split out the liquids and any oil from the gas; the liquid goes to a tank where it's disposed of, while the gas is burned in the flare stack.

The study is the first of its kind and looks at the composition and concentrations of the substances in the flowback stream, the properties of the flare during the flowback phase (such as flare temperature), and whether these substances present during this process pose a risk to human health and the environment.

Other questions being answered are, what happens to the gases? Are they released into the atmosphere? Are they destroyed by the heat of the flare? Or have they transformed into another substance?

The investigation was prompted by an AER assessment of recurring complaints from residents in the Lochend and Didsbury areas of Alberta about hydraulic fracturing activities. The assessment found a knowledge gap about what emissions are generated by flaring in the first stages of bringing a new well into production.

Because no new development was occurring in these areas at the time, the AER began testing wells around Drayton Valley and Rocky Mountain House that were being drilled into the Cardium geological formation, the same formation being developed at Lochend and Didsbury.

AER experts designed a study to collect samples between the separator and the flare stack during the flowback period. Samples were then sent to a lab to identify what substances are present.

Besides the AER and Alberta Health, other participants include InnoTech Alberta (part of Alberta Innovates), industry representatives, Alberta Environment and Parks, a public representative from the study area, and one of Canada's top flare researchers from Carleton University.

Once the study is complete, a report will follow. From there the AER will decide what, if any, changes will be made to the regulatory requirements.

The study is the first of its kind and looks at the composition and concentrations of the substances in the flowback stream, the properties of the flare during the flowback phase (such as flare temperature), and whether these substances present during this process pose a risk to human health and the environment.

How a Penny Saved Became Two Billion Dollars Earned

We knew there were savings to be had, but we didn't know how much.

However, three years and nearly two billion dollars later, the AER's efforts to make our regulatory requirements more efficient have translated into real-world savings for an energy industry beset by low commodity prices.

But it wasn't a response to oil prices that spurred us to examine our requirements through a different lens and spot opportunities to make improvements. Work to make requirements more efficient started in April 2014 as part of a bigger strategy to improve how the AER regulates. Since this time, the AER has generated over $1.9 billion in total cost savings for industry without reducing environmental protection and public safety rules and regulations. A portion of these are one-time savings, while the remainder are savings that recur each year and help ensure that Alberta's regulatory system remains efficient and effective.

To the end of March 2017, the AER has delivered over $774 million of industry-verified cost savings that recur annually through regulatory efficiency improvements. This means each year Alberta's energy industry saves over three-quarters of a billion dollars. In 2017/18, we are targeting additional savings in the order of $100 million.

So why do it? Besides the fact that creating efficiencies and a more competitive environment was a driver for merging three regulatory bodies to form the AER, our efforts bring benefits to industry such as lower operating costs, lower capital costs, and fewer regulatory delays. This allows companies to bring projects into operation faster, which in turn provides economic benefits to Alberta.

But more important is that regulating with outdated or ineffective regulation doesn't make Alberta safer. In fact, it could tie up our resources on low-risk issues and hinder action where the risks are greater. Creating efficiencies makes development safe, protects the environment better, and helps the economy. In this way, everyone affected by energy development—be they public stakeholders, indigenous communities, or Albertans in general—benefit from more efficient and effective regulatory requirements.

Making the regulatory system more efficient can be complicated, but here in Alberta it's made somewhat easier because we have only one regulator, not multiple ones with competing interests.

The savings we've achieved have been significant, and because they are applied to operations year over year, the value of this regulatory efficiency work will be realized by industry and Alberta for the next 30 years and beyond.

For Everyone’s Benefit

It's rare that a change can benefit everyone, but when it happens, it leaves one wondering why the change took so long in the first place.

The creation of the AER was one such change—it brought together all energy-related regulatory activities under one umbrella. Being responsible for all spill response and clean up has allowed us to be more effective in our approach to remediation, which benefits landowners, the energy industry, the regulator, and Albertans in general.

“Previously, the regulatory agencies had different pieces of the puzzle. There were different computer systems, different compliance structures, and different legislation,” said Sandra Blais, an advisor withthe AER.

Historically, contamination was allowed to remain in place until the site was decommissioned. But the AER has taken a different approach, requiring more active clean up at the time of a spill instead of waiting for decommissioning, which reduces the likelihood of contamination migrating over years in underground plumes.

While Blais said monitoring a spill and remediating in the location instead of immediately removing contaminated soil works well for some spills, in most cases the longer it remains in soil, the greater risk it will contaminate groundwater.

This change also means the land is returned back to what it was before the spill—farmland, forest, or grassland—much quicker.

The benefits also apply to the ones responsible for the spill.

“Cleaning up spills immediately can mean a cost savings to industry,” said Sasha Desjardins, manager of Remediation, Contamination Management, and Reclamation. “For industry to do nothing is the most expensive option.”

Companies can remediate a spill before it spreads and forego the cost to continually monitor the spill.

Energy companies need to prove to the AER that they have the financial ability to return the land back to a comparable state to what it was before energy development. So for the AER, these changes allow us to better assess how much it may cost companies to clean up once their facility is no longer needed for energy development.

Better data on spill cleanup costs make our calculations much more accurate and can sometimes involve an energy company needing to pay financial security to the AER that can be used to clean up any spills if the company goes defunct. That means the company—not Albertans—is held responsible for cleaning up energy infrastructure and their associated sites. And that benefits all Albertans.