Building Bridges with Albertans through ADR

Swiss psychologist Carl Jung once said that the most intense 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 term that 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.

“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 happy with the knowledge that the ADR team brought to the table.”

Roy and Melanie Schulze

ADR was developed to help people resolve disputes—in this case, disputes related to energy development and activity. 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 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, and excessive noise.”

The following principles apply to all mediation conducted by AER staff mediators and hearing commissioners:

  • ADR is confidential and without prejudice
  • Responsibility for resolution rests primarily with the parties
  • Parties are fully informed of the ADR process and their options
  • Mediators are impartial
  • The procedures are fair to all parties

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

Collectively, the ADR team has more than a century of experience in dispute resolution and is highly specialized. 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 the chief 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 matters for a hearing, such as procedural matters, statements of fact, and expert witnesses. Parties who think their dispute is destined for a hearing have the opportunity to request ADR by hearing commissioner.

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.

“Our team is currently working on best practices when working with indigenous peoples,” confirmed Rose. “This includes a variety of ADR models such as transformative and narrative mediation and indigenous processes for conflict resolution like sharing circles.”

With a focus on the future, innovative ways to resolve disputes, and important discussions still to be had, ADR will always be a cornerstone of our business.

What I Learned About Excellence

Tiffany Novotny, director of the Transformation Management Office, shares what she learned from her work on the AER’s regulatory excellence project.

Most don’t aspire to be average, and no one can be exceptional on their own. The AER is no different—we aspire to excellence, and the way we achieve that is by working together.

I would like to personally thank Albertans who came together last fall to weigh in on our model for regulatory excellence.

More than 1500 people across the province, both inside and outside our doors, rated the AER’s approach to the Penn Program on Regulation’s general framework for excellence, ranked our current performance against that approach, and shared their top priorities.

What I am personally most proud of is how we worked together, respected what each person brought to the table, and truly listened to ensure we had a holistic view of what regulatory excellence is.

I certainly had a great time being a part of this initiative, and I’d like to share a few lessons I learned along the way:

“All stakeholders want to see themselves reflected in the system, and I was excited to be involved in the regulatory excellence process and have an opportunity to redefine how the regulator conducts business. The entire process was very valuable.”

Graham Gilchrist, a surface rights agent and a member of the AER’s multistakeholder engagement advisory committee

There are many ways to involve people - a new digital age means new expectations for engagement. Through workbooks, an online engagement tool, social media, a web survey, and face-to-face conversations across the province, we cast a broad net to hear from diverse groups of people (including our employees, indigenous peoples, landowners, communities, industry, nongovernment organizations, the Government of Alberta, synergy groups, national and international regulators, academic institutions, and more).

Vulnerability is powerful - we knew we could not simply declare ourselves “excellent” through this work; to understand what regulatory excellence meant we needed help. This means admitting we’re not perfect and asking others where and how to improve. Asking allowed us to collectively define regulatory excellence and develop a model that we can continually measure ourselves against.

Listening says more - we had to set aside an old belief that top executives had to unilaterally set strategic direction. Through this initiative, we evaluated more than 20 research reports written by academic powerhouses from around the globe and listened to more than 1500 people. We can confidently say that we have learned by including the public and our employees in creating our path forward.

We have to walk the talk - once you put the questions out there and you get answers, you need to do something. We embraced the recommendations from the Penn Program on Regulation, and through the What We Heard report, we showed how the data we collected helped shape our model for regulatory excellence. The information we gathered helped drive tough decisions about gaps, priorities, and next steps.

As we embark on the next phase of our journey, the proof will be in how we embody excellence in all that we do.

As you can imagine, the process was both humbling and immensely valuable. We still have a lot of work to do, and now we have a model that we built together to help us get there.

The AER Shores up Dam Safety

“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.”


When you’re tasked with protecting dams related to oil and gas development, the last thing you want to do is hold back, especially when you’re trying to hold everything back.

So when the Auditor General of Alberta asked for the creation of a new dam safety program in 2015, the AER promised it was going to be robust, efficient, and relevant for the future.

The report recommended that a reliable registry of dams be maintained, risks and consequences 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 our jurisdiction hold process fluids and tailings from mining operations, so the impact of a breach or dam failure would be a major concern.

Armed with a series of recommendations, new information, and unwavering determination to meet our standards, the AER was ready to build a watertight dam safety program.

Despite the fact that owners are responsible for the safety of 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 established control 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.

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

With the structure in place to inspect the full spectrum of facilities in our jurisdiction, it was time to put it to the test.

In November 2015, we released our findings from the first series 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 coal mines, and 14 oil and gas operations structures revealed only one significant deficiency.

Although we’re happy with the results, we know this is simply 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 the recommendations from the auditor general’s report, and we will continue to strengthen the program.

Leader of the Pack

Rondine Cabot, a 10 year veteran of the AER’s inspection team, drops her four-year-old daughter off at daycare and climbs into her pickup to begin her commute to work. But today’s drive isn’t into her office in Edmonton; she’ll be driving for three hours this morning to check on a high-risk sour gas facility near Fox Creek and an indigenous reserve.

“We have the authority to shut a company down. There are a lot of tools at our disposal to make sure energy companies follow the rules: warnings, more inspections of their facilities, fines, ETC.”

Rondine Cabot, AER regional coordinator”

Two days earlier, Rondine began her intensive investigation into the facility by checking Government of Alberta software programs to understand the full scope of the operation. She checked the company’s Water Act approval to identify the company’s maximum withdrawal rate so she could verify it during the inspection and checked for any environmental protection conditions the company must meet above and beyond the standard requirements.

She also combed through old records to see where the energy operator had been deficient in the past, if there had been any complaints from the public about it, 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, whether it’s an abandoned well or pipeline or a currently operating facility. The program also helps Rondine and the other AER inspectors focus on the wells, pipelines, mines, and facilities that pose the greatest threat to Albertans or the environment. The program identified this facility as high risk because it processes a high concentration of lethal sour gas.

“We look at everything,” she said. “We start with anything that may affect public safety and go from there.”

As Rondine makes her way northwest, she considers her plan of action for inspecting the site. The most important thing she’ll look for: that the company has measures in place 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 toward the facility, knowing that although she’s here to inspect the facility, if there’s an oil and gas emergency nearby, she’ll be responding to that instead. She needs to be able to react at a moment’s notice to energy incidents.

“If there’s an emergency, the first thing we do is make sure the operator has enacted their emergency response plan. But we always send the person that’s closest to respond.”

And sometimes that means helping out other field offices if the emergency is near the office boundaries.

“We have the flexibility to go where we see the need,” she added.

Thankfully, major incidents in the energy industry are rare; there were just four well blowouts and 1.17 pipeline spills for every 1000 km of pipeline in the province in 2015. And on this day, Rondine makes it to the sour gas facility without being called away.

As she inches her way up the rutted, muddy lease road in her pickup, our logo—the shield depicting Alberta’s diverse landscape and bold black letters spelling out Alberta Energy Regulator—is immediately recognizable to the men 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. “There have maybe been two times in my 10 years that I haven’t been.

“They understand my job isn’t to get people into trouble; it’s to help them find areas where they can improve. Whether it’s because of the impact to the public or environment or because of the cost to clean it up, nobody wants spills to happen.”

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

“They usually like to walk around the site with us to see what it is we’re looking for; to make sure that they’re following 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 nothing that put the public at risk. Rondine will have to check in on them again soon to make sure they’ve been fixed.

And if it’s not?

“We have the authority to shut a company down. There are a lot of tools at our disposal to make sure energy companies follow the rules: warnings, more inspections of their facilities, fines, etc.”

“But one of the most effective ways is to shut them in. If they can’t produce, they can’t make any money. And that’s a big incentive to follow the rules.”

Rondine’s story represents one of the 11 216 inspections the AER conducted in fiscal 2015/16. AER staff wield significant power when it comes to ensuring Alberta’s energy industry follows the rules, and industry personnel recognize that.

Learning Why the Earth Moves in Fox Creek

Residents of Fox Creek felt the ground tremble on January 12, 2016. The reason: a 4.8 magnitude (ML) earthquake just 35 km from the northern Alberta town.

The quake was the fourth over 4 ML to shake the area in the past year, all linked to hydraulic fracturing in a province that, traditionally, has been relatively quiet on the earthquake front.

“We need to continue to study the links between hydraulic fracturing operations, geology, and geomechanics and their effects on induced seismicity.”

Kristine Haug, AGS geological engineer

When it hit, seismologists at the AER’s Alberta Geological Survey Branch (AGS) were assessing data from previous earthquakes in the Fox Creek area as part of a formal study into “induced seismicity,” earthquakes that are triggered by human activity. The latest earthquake would provide them with even more data to analyze.

The AGS is using data from more than 53 monitors that measure seismic activity across the province, and the January event showed up on monitors almost immediately.

The activity also caught the attention of area residents, the media, and Alberta Premier Rachel Notley, who asked the researchers to provide an interim report this spring. The study’s final report is due to be published in November 2016.

“Our initial findings indicate a strong link between geological features in the area, for example faults and ancient fossil reefs, and induced seismicity,” said AGS geoscientist Todd Shipman, manager of the Landscape and Geological Hazards Group.

“We need to continue to study the links between hydraulic fracturing operations, geology, and geomechanics and their effects on induced seismicity,” said Kristine Haug, AGS geological engineer. “This information will be included in the final report.”

And while none of the earthquakes linked to hydraulic fracturing have caused any impact to infrastructure or the environment, energy operators in the area continue to be bound by AER’s
Subsurface Order No. 2 when hydraulically fracturing in the area.

Using a traffic light protocol, licensees fracturing in the Duvernay Zone in the Fox Creek area must monitor seismic activity and report any earthquakes within 5 km of their wells during hydraulic fracturing operations. They must also have a response plan and be prepared to apply that plan to any induced seismicity above 2.0 ML.

If monitoring picks up an earthquake of 4.0 ML or greater, they must immediately cease operations and report it to the AER. They will not be allowed to resume operations without AER approval.

Animating Conversations about the Oil Sands

You shouldn’t have to be an engineer, geologist, seismologist, or biologist to understand what’s going on in Alberta’s oil sands.

When Albertans asked for clear, straightforward information about oil and gas activity, we realized that we needed to communicate our work from a different perspective. It was time to pool our experts’ knowledge and deliver the facts in a more creative and transparent way. Numerous brainstorming sessions later, Conversations that Matter, a six-part animated video series, was born.

Conversations that Matter gives Albertans easy-to-understand information about energy development and regulation in their province. Each episode makes sense of a complex, highly technical topic by presenting it in an accessible way; animation, plain language, candid storytelling, and relatable characters help break down technical material and industry terms for all audiences to understand.

The videos offer a solution to the unfamiliarity and confusion about energy development and regulation that many Albertans experience. Several studies conducted by the AER over the last decade reveal that Albertans continue to have specific concerns about oil sands development, including safety, environmental protection, and incident response.

With these key areas in mind, 45 industry and subject matter experts worked together to provide credible and objective information in a digestible format. Fran Hein, senior geological advisor, lent her technical expertise to the episode “How Big are the Oil Sands?” She said one of the project’s greatest challenges was translating complex terms into more common language.

“Moving away from the specialized language we use among our colleagues was difficult,” explained Hein. “Initially, I thought animation would make the videos seem less scientific and would make them lose meaning. But it’s part of our mandate to inform the public. As scientists, we should be able to communicate with those who don’t have that background.”

“As things came together, I realized the animation and plain language makes the subject matter more approachable, to the point where Albertans can actually identify with the characters and their level of understanding.”

By reducing technical language and adopting an Albertans-first approach, Conversations that Matter invites anyone to become aware of and learn more about energy regulation. Each video then becomes a tool that Albertans can use to assess the AER’s work and be able to hold us accountable for it.

Find Conversations that Matter at ABEnergyRegulator

“It’s a rewarding experience, to effectively deliver the same, transparent information to everyone regardless of their background knowledge,” said Hein.

This kind of approach is new and unconventional, and it’s working.

Since its official release in October 2015, Conversations that Matter has been viewed almost 60 000 times on YouTube and has been shown at conferences, trade shows, and other events worldwide.

But the conversation’s not over yet: we’re now looking to expand the series to inform Albertans on topics like hydraulic fracturing. And as long as Albertans have questions, the AER will continue to answer them in innovative ways.

Conversations that Matter can be viewed on YouTube.

Focus On Area-Based Regulation

What if decisions on oil and gas development addressed the individual needs and concerns of an area? What if residents in communities collaborated to find solutions to issues?

“We will be asking stakeholders for their help to come up with solutions. It will be a much more collaborative process for everyone.”

Scott Millar, director for the AER’s area-based regulation project

This is the direction the AER is going over the next few years. It’s a new vision for the future that considers the needs of each individual community. “As the regulator, we haven’t always done a great job of acknowledging the individual needs of an area or a community beyond those directly affected by an individual activity,” says Scott Millar, director for the AER’s area-based regulation project.

It’s a direction the regulator needs to go, he adds. The way energy resources are developed has changed significantly in the past 20 years. It’s no longer the drilling of scattered vertical wells. Development occurs now on a larger scale, in a project style with larger impacts like multiple wells and infrastructure—like roads, batteries, and pipelines—instead of single wells.

The AER needs to look more closely at how multiple development activities could affect a specific area and at the cumulative effects of those activities over time.

Fortunately, the AER has already done some of the groundwork in shifting how we regulate. In 2014, we launched our play-based regulation project in the Fox Creek area of Alberta.

That project looked at how resources would be developed and how that development impacted the land and the community. For example, when a company applies to drill a well, applications for many other activities, such as building an access road, connecting to a water supply, and building a pipeline, may follow. All of these activities have an impact, and under the play-based regulation pilot, the applications to conduct all of those activities came in as one, so the AER could have a better sense of the big picture.

While this pilot included discussions with interested stakeholders, it focused on generating awareness of the project as a whole. And while stakeholders found the complete project picture helpful, they told the AER that engagement could still be improved.

“We know that residents, indigenous peoples, industry, and other stakeholders have unique concerns, specific to their area,” says Millar. “Through area-based regulation, we’ll be working with those who work and live in an area to come up with solutions, instead of addressing an issue after decisions have been made.

Will the AER get everything right on the first try? Unlikely, admits Millar. That’s why the AER is going to test the concept by conducting a pilot in the Fox Creek area. The community and people have concerns about water use and seismic events in an area of the province with active development.

“It’s a fundamental change for the AER, but also for our stakeholders and our industry,” says Millar. “This evolution is going to take a lot of hard work and commitment on our part over the next few years. And we will learn from our first pilot and adjust along the way.”

What is the ultimate goal?

Millar hopes that through a collaborative process, stakeholders and the AER will develop meaningful solutions to community-based issues.