2017/2018
AER Annual Report
Financials and Management's Discussion & Analysis
Annual Report 2017/18 Executive Summary
Sheila O'Brien
Chair
Message
from the Board
As we celebrate the five-year anniversary of the Alberta Energy Regulator, we can pause and record our tremendous progress. The Responsible Energy Development Act was proclaimed in the spring of 2013, creating the broad framework for the AER. On April 3, 2013, Gerry Protti was appointed chair of the board of this new regulator, and he was a “band of one.” He subsequently hired Jim Ellis as our CEO and a diverse and talented board of directors, and together they fashioned this innovative regulator from whole cloth. This model had never been implemented before, and there were myriad issues, challenges, and unanticipated roadblocks to getting it up and running and getting it right.
At that time, the energy industry was white hot, and there was record-breaking activity in almost every sector of the industry. In the face of tremendous demand for regulatory services, Gerry and Jim set the tone at the top, ensuring that our standards, our ethical framework, and our corporate culture not only reflected the best of Alberta, but also formed the foundation of the excellent organization we can all be proud of. On behalf of Albertans, I would like to thank Gerry for his tireless leadership over the past five years.
I have come home to the AER. I was on the original board of directors for three years, and my term expired in 2016. I am delighted to have been reappointed to the board for the fall of 2018 and to assume the role of board chair. Even in the short time I was away from the board, there was demonstrable progress in fulfilling the mandate of the organization.
While we were dealing with boom times in the early years, the current challenges of the energy industry call for a different way of thinking. The exceptional leadership team here, and the 1200 dedicated women and men who are the AER have risen to the issues arising from the current industry downturn. Resilience is in the DNA of this organization, and everyone has remained focused on our core values: we are protective, effective, efficient, and credible, balancing the needs of all our stakeholders.
While there will always be challenges ahead, and this year is no exception, I am confident that we have the regulatory expertise, the people, and the resources we need to ensure that we can respond to an ever-evolving environment and to emerging opportunities.
Jim Ellis
President and CEO
Message
From the President and CEO
It was June 2013, and the way Alberta’s energy resources were regulated was about to take a dramatic turn. Then the rains came, the rivers rose, and almost half of Alberta faced unprecedented flooding.
The newly launched Alberta Energy Regulator—created by the Government of Alberta through the Responsible Energy Development Act—suddenly found itself responding to oil and gas emergencies caused by the floodwaters. It was an unexpected way to start a new organization, and as the new president and CEO, I was unsure about how our employees would perform faced with such adversity. But perform they did, with exceptional dedication and professionalism, and I knew right away that we’d be able to accomplish a lot for Albertans.
Since then, we’ve made great strides toward having the right requirements to effectively regulate and ensuring that industry follows those requirements. This is a result of having a skilled workforce and good planning; not long after we launched, we released a strategic plan with a vision of becoming an excellent regulator. That plan has guided our work over the past five years, allowing us to focus on protecting what matters: public safety, the environment, and economic benefit.
However, just as energy development evolves to adapt to new challenges, the way we regulate must also evolve. So, this past spring we unveiled a new strategic plan built on a new vision: “Alberta is recognized for excellence in sustainable energy development.”
In everything we do, we strive to deliver on the key outcomes of protecting the public and the environment, ensuring that the public feels confident about how energy is developed, and building a regulatory system that enables economic benefits for Albertans. To achieve our vision and deliver on our outcomes, our plan has new strategic goals that relate to
- basing decisions on environmental, social, and economic factors and taking into account company performance;
- listening to—and building relationships with—stakeholders and indigenous peoples, while considering their perspectives in our work;
- helping to make Alberta a more competitive province;
- reducing the impacts of development by enabling innovation; and
- ensuring that companies fulfil their obligations to clean up the land once they’ve ended an energy development.
But a plan is only as good as the people who put it into action. Given the commitment of our leaders and the talent of our technical experts, I believe that we are well positioned to achieve our goals and realize our vision.
Today, as we celebrate the AER’s fifth anniversary, I marvel at how far we’ve come as a regulator and what we’ve accomplished. Our achievements—and challenges—from the last fiscal year are shared in this our fifth annual report. I hope you take some time to click through the stories on this site—you might find them a good read and learn more about the work we do and the people who do it.
Jason Veness
Senior Advisor, Indigenous Engagement
Message
AN EMPLOYEE’S PERSPECTIVE
In the two years I’ve been working at the AER, I’ve spoken to a lot of the staff about the regulator’s relationship with indigenous peoples. What I’ve learned from my colleagues has both surprised me and fueled my passion: there is an eagerness and interest for change. I honestly thought that I would be pushing this message onto people, not the other way around.
One of the early landmarks for me was when I was asked to help put together a meeting between Jim Ellis, the rest of the executive leadership team (ELT), and the treaty chiefs. I remember watching Jim speak with the chiefs, who were skeptical and unsure, and the rest of ELT as they committed to repairing the relationship between the indigenous communities and the AER. They made this commitment not because it was good for business, but because it was the right thing to do, and that was a powerful transaction to witness as a new AER employee.
Later, when I had the opportunity to meet Jim again, he asked me to read the forward in the Achieving Regulatory Excellence book. That forward is what I hold Jim accountable to; it lists eight ways the regulator can demonstrate itself as being excellent, but point number four is the one that resonates with me: “building and maintaining public trust and relationships that gives regulators the credibility to operate confidently with poise and stature” (Coglianese, 2017). To me, that is really the embodiment of indigenous engagement and what Voices of Understanding is all about.
Our leadership has taken a leap of faith by putting trust in a worldview that they don’t really have access to, that they know very little about, and that in the past had put constraints on the way that they sought to do business. That tells me that the organization is willing to do things that are going to be uncomfortable and, at the very least, they’ll take it as a learning opportunity—even if it goes sideways. Having said that, I want every single employee to know that our leaders are not putting us in a place that we can’t handle.
Voices of Understanding is about restoring indigenous peoples to their rightful place. We cannot be afraid of the conversations needed to get there. I think it makes us more competitive because it enhances our decision-making capabilities, it breaks down barriers between the AER and the communities, and it gives them certainty that the regulator works for them; they are no longer just a product of this regulation, they are a partner in it.
AER Social Research Report Executive Summary