The Alberta government is working to resolve what the new Alberta Energy Regulator‘s chief executive officer calls a “breakdown” in how the Alberta government created policies.

“There was a policy disconnect,” said Jim Ellis, the chief regulator of the province. “There was a policy disconnect at government and there was a policy disconnect with the regulator, the ERCB (Energy Resources Conservation Board.)

Until recently there were no mechanisms for dialogue between the ERCB and government, he told a Petroleum Technology Alliance Canada (PTAC) forum on air issues.

“There was a lot of grayness,” he added. “We had the ERCB doing policy, we had the government not doing policy and we had… the regulator coming in and saying “We’ve got an issue. We’re seeing stuff on the ground right now. We need some sort of a policy to fill this gap.'”

The Environment and Sustainable Resources Development, Energy and Health departments were all handling air-related policies and not communicating well together, said Ellis, who was a lead policy deputy on the natural resources side at the time. “It wasn’t going very well.”

But when Alison Redford became premier she organized department deputies to collaborate more, with the aim of trading information on air issues and policies among themselves and with the regulator, he told the meeting.

There is now an assistant deputy minister in charge of ensuring that government policies are being implemented by the regulator and the regulator can inform government when policies need to be enhanced and accelerated, said Ellis, a former Alberta environment deputy minister.

Ellis told the meeting he is determined to solve the problem of odours that seem to be emanating from oil operations in the Peace River area and that technology is probably the answer.

He said he asked the AER board to set up a proceeding to investigate odours in the Three Creeks area which have caused a lot of problems for the regulator.

“It’s all about openness in the way we do business.”

Residents have complained of coughing, shortness of breath, respiratory concerns, exhaustion, joint pain and stiffness, sinus congestion, nausea, headaches and watery eyes.

At the PTAC meeting, several members of the public, who said they live near dozens of oil wells in the Lochend area on the outskirts of Calgary, asked Ellis about protection from hazardous effects and the lack of air quality testing.

“We hear these issues,” Ellis told the residents, adding that the AER is working with the government to create frameworks around air and water issues. “Before we start looking at major development we need to understand what the environment can hold and the aspects both of groundwater/surface water and air emissions.”

The ERCB and the energy and environment departments have been trying to solve the Peace River problem, he said.

An AER spokesperson has said the proceeding could involve a public hearing (DOB, Sept. 18, 2013). A public meeting in Peace River Oct. 7 is being held to provide the regulator with input from residents, industry and government as to the direction it should take.

Ellis said the regulator wants to hear from landowners, residents, industry and especially technology experts.

“We believe that there’s probably some technology opportunities here to help drive this to the ground and there’s clearly operational issues going on that we have to get to the bottom of.”

A 2010 Alberta Environment report concluded there was “a strong likelihood that the emissions from oil and gas production in the area contributed to the reported odour complaints in the Three Creeks area.”

Ellis noted that under the new Lower Athabasca Regional Plan (LARP), the first of the province’s seven land use regional plans, limits have been set for air, land, water and biodiversity. If those limits are exceeded, no further project applications will be approved until conditions are met, said Ellis.

“That’s a significant piece and people are missing it,” he said. “The NGO (non-governmental organization) community is just starting to pick up on it.”

LARP became law last year but much work remains to implement it, he said.

Currently the government is working on the South Saskatchewan region’s land use plan, and is at the planning and consulting stage. The region is home to 45 per cent of Alberta’s population and takes in Calgary.

This year appeared has appeared to be a rough year in the media for the regulator, said Ellis. “Pipelines, for us in Alberta, are the new tailings ponds.”

In contrast to 2008, when the spotlight was on tailings ponds, pipelines are now the focus thanks to Keystone XL and Northern Gateway pipelines, he said.

The pipeline industry is experiencing what oilsands operators went through a few years ago, so the Canadian Association of Petroleum Producers‘ oilsands group is sharing what it learned with pipeline representatives, said Ellis.

“After the Syncrude (Canada Limited) duck event in 2008 (when migrating ducks died after landing on a tailings pond) the entire world changed for all of us and we’re doing things differently,” he said.

Two years ago when Ellis was in the Department of Energy, the province sold about $3.5 billion worth of shale gas leases and the regulator is now working quickly to develop an unconventional gas framework to try get ahead of activity in the Eastern Slopes and in western and northwestern Alberta, he told the meeting.

“Once the gas price starts to creep up and once the opportunities are there, companies are going to come in fast and hard,” he said.

The AER came into effect June 17, 2013 with a CEO, board, commissioners and a new executive team using all the ERCB’s regulations and legislation.

The sustainable resources development personnel are being folded into the new agency and Phase 2 — the geophysical, public lands, landowner registry and enhanced participation by Albertans — is to be in place by December.

Phase 3 – the Water Act and the Environmental Protection Enhancement Act – will also enter the AER at that time, he said.

By March 31, 2014, all aspects of the oil, coal, oilsands and gas, including unconventional, will be regulated by the AER.

The AER will have 1,000 employees, regulating 775 natural gas processing plants, nine oilsands mines, more than 50 in situ schemes, five bitumen upgraders and 10 coal mines.

Ellis said he and Gerry Protti, the chair of the AER’s governance board, will travel to Washington, D.C., next week to spread the word to Americans about its activities.

By Lynda Harrison, The Daily Oil Bulletin