Easy cheap fix Mr. Kenney: Remove AER’s legal immunity.
2009: The Intimidation of Ernst: Members of Harper Government’s Anti-terrorist Squad Intimidate and Harass Ernst after her Legal Papers were Served on Encana, the EUB (now AER) and Alberta Environment
All parts of “Operation Synergy” are worth reading – Alberta energy regulator’s local and global Hanky Panky was in full throttle decades ago, under McCrank’s leadership and for free!
ERCB was EUB became AER after Ernst’s lawsuit went public
2007: Integrity on the rocks, outgoing EUB Chairman Neil McCrank’s new job reviewing his own work [EUB “Brotherhood” became ERCB “Brotherhood.” After Ernst lawsuit went public, gov’t created the 100%-industry-funded AER Brotherhood. Public interest was removed from its mandate the better to enable frac hits ‘n harms/blow outs/acquifer fracs/law violations/pollution and increase profits for the Brotherhood’s boss, the oil and gas industry]
Above image from Justice D. W. Perras September 7, 2007 report on EUB’s (now AER) “repulsive” spying on innocent Albertans (authorized by McCrank!)
Do it yourself by Shirley Bray, September 27, 2007, Calgary Herald
EUB – Re: Discrediting the EUB doesn’t serve Albertans , G. W. Govier, G. J. DeSorcy, M. N. McCrank, Opinion, Sept. 22.
The EUB did a fine job of discrediting the “venerable institution” all by itself. Please don’t give the credit to others, they don’t deserve it.
2006: McCrank was Chair when the EUB incorporated the notoriously evil Synergy Alberta. Synergy slickly rounds up intelligent, concerned, courageous, outspoken citizens, purifies them with ample propaganda, ego fodder and bribery in CAPP’s blender to make them chant, “We are not opposed, we want regulations (and a study, and another study, and another) while our farms and families, children included, are poisoned by industry.”
2005: McCrank was also EUB Chair when the “regulator” violated Ernst’s Charter rights in writing, judged her a criminal, without charges by the RCMP, no fingerprints, no hearing or trial, no evidence, no due process trying to scare Ernst obediently silent. McCrank did nothing to take responsibility for the law violations or fix it. (The regulator did not “in essence” find Ernst to be a “vexatious litigant” as Supreme Court Justice Rosalie Abella wrote in her 2017 ruling in Ernst vs AER)
See “vexatious litigant” anywhere?
AER/ICORE/Jim Ellis Hanky Panky & Deregulation Tried to Go Global. Is CAPP et al making Ellis take the fall for Neil McCrank, EUB Boss (before it became AER)? McCrank authorized spying on innocent Albertans, initiated spreading AER’s evil, lies & propaganda globally, was boss when EUB violated Ernst’s charter rights and refused to make it right.
Subject: What A Crock–What Are The UCP Trying To Pull Here??
Date: Wed, 9 Oct 2019 18:32:51 -0600
What a crock!! Tarnish the reputation of a Conservative Controlled Regulator –that was forced to change it’s name every few years—just to remain relevant?? Tarnish the name of a regulator that used private spy’s to investigate Land –Owners—and private Alberta citizens- that refused to believe the amount of false crap they were being fed by a group who presented themselves as a “Quasi Legal Public Body”—whereas they were believed to be a “Queasy Legal Public Body to any Alberta citizen trying to get a fair deal though their system!!
Neal McCrank and Gerry DeSorcy are two of the biggest hypocrites one man ever told another about!! The amount of scandals under both these two leading members of Alberta Energy Regulators are astounding to the point ICore is no match for the underhandedness that these leaders willed on many a land owner!!
Indeed McCrank was around when the Alberta Regulator of the day turned over in a questionable manner– powers given solely to the Alberta Energy Regulator to a group headed by Shell Canada Ltd. to regulate themselves?? Continued financial support for these privately owned—would be—Energy Regulators- who were also given very private information offered to sour gas developers on terms that they were to be kept strictly PRIVATE??
My problems with the Alberta Regulator came when I discovered the Regulator had offered Shell Canada a Licence to drill a class 3-4 super sour gas well only meters from my new home in the Caroline –Sundre Area!!
This well was very very illegal as it fell within the 1500 meters of the provincially owned Ravine Brood Trout Station and public campgrounds?
Soon the Reorganized Church Of Jesus Christ Of Latter Day Saints- who also felt their small church was also within the 1500 meter set back for a class 4 sour gas drilling- hired a lawyer and started a secret negotiation with Shell Canada in front of our Alberta Regulator without any other land owners knowledge?? My complaints to the regulator went without any proper reply until a major well hearing was in place again involving Shell Canada—and I was able to have the very dangerous 5-25-35-5-w5 well admitted as evidence !!
This I believed livened up my case where I was simply asking the well have a “Slave Nipple” installed to lower it’s production to a far safer level that would allow my family the time to exit our property should a spill happen with this well!!
Indeed a sour spill did indeed happen with Shell Canada Caroline but, not at the aforementioned site!! This became known as the “Caroline Cover-Up” due to how it was handled!!
Not wanting the public at large to know the second thing to happen during this super sour spill was the Shell Canada phone system totally failed during this March 12th 2003 major H2s spills allowing school buses to haul rural school children from clean areas into Caroline while it was under the possibility of evacuation!!
The First thing to happen was the total absence of any sign of the truth!!
The secret meetings between Shell Canada—SPOG [Hideous Synergy Group Extraordinaire] and the regulator- had me floored– and made me continued to sell my property with disclosure- and take the best price I was able to get!! I’m certainly not sorry for leaving an area where the local government could not help but know the Shell well at 1135 meters south of the Ravine Brood-trout Station was in violation of the proper set back distance— demanded as a Minimum!
I can laugh out loud when I now read about the shock crooks with the regulators office that helped Shell and SPOG to illegally gain far more acreage in the “Caroline Unit” than they should have gotten–using legal and proper licensing means—because revenge is sometime vey very sweet payment in itself!!
Stewart Shields, Lacombe Alberta
Varcoe: Time for AER to step up, speak out and make real changes
by Chris Varcoe, Oct 9, 2019, Calgary Herald
Neil McCrank, who chaired Alberta’s Energy Resources Conservation Board from 1998 until 2007, says the Alberta Energy Regulator’s reputation has been tarnished by the findings of three critical reports released last week. Gavin Young/Post Media
[Alberta’s energy regulator’s reputation was sordid long ago when it was the EUB. The regulator, no matter what “Brotherhood” it belongs to, or how many name changes, has never regained any credibility, integrity or trustworthiness.]
You know an organization has lost its way when two of its formative leaders openly express dismay at its direction, effectively taking it out to the woodshed for a tough talk.
That’s the state of the Alberta Energy Regulator today.
The board of directors was replaced last month and the AER’s mandate is under review by the provincial government.
Its former CEO, Jim Ellis, was found by Alberta’s ethics commissioner to have had a conflict of interest, as several independent investigations into the AER were released last week.
Employees described a “culture of fear” within an organization of about 1,200 people that is mandated with overseeing the efficient, safe and environmentally responsible development of Alberta’s energy resources.
“I was very distressed to read about it and a bit sad, on the behalf of a lot of people who spent a lot of time there,” said Gerry DeSorcy, who led Alberta’s predecessor energy regulatory agency as chairman between 1987 and 1994.
“I think that changes do have to be made.”
Neil McCrank, who chaired Alberta’s Energy Resources Conservation Board from 1998 until 2007, expressed similar concerns.
“I was just shocked to read the reports,” McCrank said.
“Alberta has been known throughout the world as having one of the best oil and gas regulatory systems on the face of the planet. And that has been diminished, tarnished, substantially, by these findings.”
Too funny! Yup, the best alright, while under McCrank’s “Brotherhoodgooeyness,” just like this comment to a Nikiforuk article:
The controversy surrounding the International Centre of Regulatory Excellence (ICORE) saw Ellis help establish the external non-profit corporation in 2017, which used AER resources. It was intended to generate revenue by offering training and services to foreign regulators.
It led to critical reports, released Friday by three independent legislative offices, which found ICORE was outside the mandate of the regulator.
Alberta’s public interest commissioner found Ellis grossly mismanaged public funds in establishing and supporting ICORE, and by “misappropriating or by attempting to misappropriate the intellectual property of the AER.”
Ethics commissioner Marguerite Trussler found Ellis breached the Conflicts of Interest Act, and said the main motivation behind ICORE was to create future employment or remuneration for the former CEO.
The auditor general found the AER spent public money inappropriately on ICORE activities, and oversight by the board of directors was ineffective.
“There are still hundreds and hundreds of people in that organization … very committed, solid individuals, working hard. And they must be looking with their head down at their desk today thinking, ‘Oh my God, what happened?’” said McCrank. [Roaring laughter!]
“It’s not the way the organization is supposed to be run.”
Alberta has a long, proud history of operating a world-class regulator to provide oversight of its oil and gas resource development, dating back to the 1930s.
For years, Alberta’s regulator has been visited by international agencies seeking its expertise, but never charged for it, seeing this role as part of the broader “brotherhood of regulators,” said McCrank.
So why did it change gears and what will it do next to get back on track?
I wish I could tell you.
The AER executive turned down several interview requests this week, although the organization issued a vague statement late Monday, noting it has “initiated improvement in our governance policies, controls and culture.” [Probiotics to the rescue?]
It did an internal audit to recommend improvements and ensure effective oversight, and is reviewing the reports’ recommendations, the AER said.
That’s a start. But it’s not good enough.
It needs to speak out and fully explain how the dysfunction occurred, what precisely the management and board did (or did not) do, and — most importantly — discuss plans to rebuild any lost trust with its staff and the public. [Impossible. Intelligent self-thinking members of the public will never trust the AER or any “brotherhood” version of it, nor will many in other parts of Canada and the world.]
The organization has a duty to its employees, the industry and all Albertans to be forthright about how it will resolve the underlying issues identified in these reports. [AER does not owe any duty to any Albertan. The courts gave AER “No Duty of Care” for any of us, our drinking water, environment and health. Under REDA, the government “repulsively” removed the regulator’s public interest mandate. The Brotherhood only serves industry, egos and failed politicos, eg, Tom Olsen, who has just been appointed Managing Director of Kenney’s $30 Milllion gift to CAPP – the propaganda war room, name changed to Canadian Energy Centre (copying a federal government agency with nearly the identical name). Why isn’t McCrank ripping a strip off Kenney?]
Going forward, the critical issue ahead comes down to one key word: trust.
As DeSorcy and McCrank stressed, a public regulator must be built and operated on a solid foundation of trust. [PFFFFT! What bullshit. The AER is not a public regulator; It is 100% industry-funded and controlled] The AER must trust (but also verify) the industry will operate in a safe manner and will provide authorities with accurate and timely information. [And that’s the biggest AER hanky panky creating problem right there. “Trusting” one of the nastiest, most dishonest, harmful and polluting, and greediest industries in the world.]
The industry must have confidence in the agency, to be fair, efficient and transparent.
And the public (including the government) must trust the regulator to look out for the best interests of all Albertans. [Is this piece of propaganda being paid for by the War Room? Dreadful deception by the media. Under REDA, AER has no public interest mandate, no public health mandate, no economic mandate and owes Albertans nothing but sleazy, legally Immune, No Duty of Care, Lying, Spying, Law-violations including Charter violations, and endless enabling of abuse by polluters and companies refusing to pay municipal taxes, rent to landowners, even refusing to pay their utilities bills with utilities make landowners pay, and move evil, AER enabling companies to walk from clean up.]
“It’s critically important that people have confidence in the AER. [Like how it is critically important that people have confidence in Canada’s horrifically abusive and inaccessible legal system!? No wonder ex-leaders like McCrank pimp the “Brotherhood!”] It’s one of the flagship regulatory bodies in the country on energy development,” said former Alberta energy minister Ken Hughes, who helped create the restructured organization in 2012. [Whose idea was it to remove public interest from the regulator’s mandate? Neil McCrank? Jim Ellis? Ex Encana VP Gerard Protti, who became Chair of the regulator?]
Now let’s match up the ideals with what the auditor general’s report found:
• The former AER chief executive held multiple potentially conflicting roles;
• The “tone at the top at AER did not support a strong control environment or compliance with policies;”
• AER staff, in interviews with the auditor general’s office, commonly talked about a “culture of fear” at the regulator and employees who expressed concerns were at risk of losing their job. [Pathetic! AER staff ought to be speaking out publicly by the hundreds, exposing the corruption in all corners of all departments. Losing your job or being afraid of losing it, is no where near as terrible as watching the regulator — under McCrank’s watch — allowing industry to frac illegally into your community’s drinking water supply, rendering your well water too dangerous to even use to flush your shit away, then have the “regulator” judge you a criminal without any due process or evidence, violate your Charter rights, trying to slam you into silent submission to protect the polluter. Where are the whistle blowers for the endless law violations and abuses against innocent Albertans who don’t have a salary and benefits like staff do at the regulator?]
Both DeSorcy and McCrank said structural changes made in 2012 to set up the AER with a separate CEO and board should be examined to see if it’s the most effective way to run the organization.
SUPER SIMPLE SOLUTIONS TO START FIXING THE AER:
REMOVE ITS LEGAL IMMUNITY AND CRIMINALIZE HYDRAULIC FRACTURING
PUT PUBLIC INTEREST BACK UNDER ITS MANDATE and ADD PUBLIC HEALTH AND ECONOMICS.
WASTING $30 MILLION OF TAXPAYERS’ MONEY NOT NEEDED!
It’s also clear the AER and its board need to be open with the public about what it’s doing to address the issues head-on, not worrying about saying the wrong thing or waiting for the issue to blow over.
Yet, it can take solace that it was a whistleblower at the AER — and others inside who expressed concern — that led to these problems coming to light.
“The core of the organization — the very dedicated people that are in the organization today and have been for years — they remain. They just have to be reassured the people at the top … (are) in line with their thinking,” said McCrank. [What rot!]
And what should the new management and interim board of directors do next?
“They have to talk to the people about a new day, but more importantly, they have to mean it,” added DeSorcy.
“They have to open the door to their offices and mean it. That’s all there is to it.”
A few of the comments to above article:
So why hasn’t the AER’s absentee former chairman been sued for breaching his fiduciary obligations to the organization? They paid him a great deal of money to manage the AER over the years, but he mismanaged it instead. The interim board should go after him, personally. It would send a message that this sort of garbage won’t be tolerated.
The idea that mismanagement and the culture of fear began with ICORE is faulty. The AER’s treatment of landowners has been counter to the interest of Albertans for years. The complaints around high pressure fracking have been ignored, shrugged off or denied since it began in 2009 [and long before that, when it was ERCB and before that, when it was EUB!]
Common knowledge that Alberta’s energy regulator operated in favour of the industry has been current for decades. This present issue is just the tip of the proverbial iceberg. An agency paid by industry will operate for industry, not for the common good.
The AER mess offers Kenney a rare opportunity by Jeffrey Jones, Mergers and Acquisitions Reporter, Oct 7, 2019, The Globe and Mail
Damning conclusions of three investigations into the case of the Alberta Energy Regulator’s runaway CEO are all Premier Jason Kenney needs to remake the agency in his own image.
It’s an ideal time for Mr. Kenney’s United Conservative Party government to turn the page on the Alberta Energy Regulator (AER) after a period of scandal and blunder [ya, running decades long and still going strong!] that has shaken the industry’s and the public’s confidence in it. [Pfffft, what confidence?]
It will now be up to the both constituencies to determine whether the government strikes a balance between running a regulator that does not bog down responsible oil and gas and making sure a multibillion-dollar problem of underfunded environmental liability is dealt with. [With Kenney voted in, that will never happen, he does what the USA, industry and the Koch Bro tell him.] The government’s messaging has so far been very light on the latter.
The government, elected on its pro-oil policies, has been adamant that the regulator must be much more industry-friendly [which can only mean zero regulations and f*cking frac’ing madness], and has talked about removing hurdles for the oil patch in its quest to regain investors. [Even zero regulation in Alberta’s oil, gas and tarsands industry isn’t going to bring the investors back. They know sanity and profits are elsewhere]
These are not ideal circumstances for the province’s dominant industry, which is under severe financial strain after nearly half a decade of downturn. [More like excessive greed by the industry destroyed itself.] The AER is funded by industry levy, and its job is to make sure companies operate safely and within environmental rules. It also determines whether producers that buy assets have the financial wherewithal to clean them up. It has fallen down in that regard key times in recent years, in the name of keeping the wheels of commerce turning.
Now, though, it is clear that the UCP wants a clean slate, and more control, at the AER. Check out its changes so far: The government first put the industry-funded regulator on a tight financial leash, imposing a $150-million interim budget, about $100-million less than last year. That prompted the need for staff cuts, which could begin later this month.
Then, in September, the Premier and his Energy Minister, Sonya Savage, fired the board of directors and installed a new five-member slate. Two of them, chairwoman Beverly Yee [One of the worst possible choices! https://www.ernstversusencana.ca/deputy-env-minister-bev-yee-helped-cover-up-encanas-crimes-diverting-water-without-permit-under-water-act-illegal-aquifer-fracing-community-wide-drinking-water-contamination-to-chair-aer/ ] and Grant Sprague, were deputy ministers in the provincial government, pointing to a much shorter arm’s-length relationship. If the public has any concerns about objectivity, the UCP can point to the expensive mess that occurred under a more independent board.
When she announced the new directors, Ms. Savage formally launched a review of the AER, stressing that it had become too slow in dealing with industry applications, [AER granted Encana non-routine approval to drill under my already dangerously contaminated property in half a day! What does industry want? Instant approval yesterday?] a problem she said had plagued it for years. It was “not competitive,” she said then, using a favourite phrase of the Canadian Association of Petroleum Producers.
Any push to streamline the AER must be done with the realization that risks are never far. Two days before investigators released their reports, Bellatrix Exploration Ltd. [https://www.ernstversusencana.ca/another-frac-dust-biter-bellatrix-expl-ltd-daunheimer-lawsuit-fame-seeks-buyer-court-supervised-restructuring-given-level-of-debt-no-assurance-creditors-will-be-satisfied/ ] filed for protection from creditors so it could restructure and seek a buyer, showing how [deadly industry’s insatiable greed is] depressed natural gas prices keep threatening the financial health of the industry.
2019 08 07: Frackers have spilled billions of dollars in red ink. Fracked oil & natural gas have been financial disasters. “Cash flows from fracking-focused oil and gas companies across the US have been negative for decades — even when oil and gas prices were higher than they are now.”
End Reality Check.
Meanwhile, lenders have become nervous about extending credit after a Canadian Supreme Court decision that prioritizes environmental cleanup over the interests of secured creditors.
Mr. Kenney has a rare opportunity now to bring in fixes that restore confidence in what is arguably the most important regulatory watchdog in Alberta. Removing some of its teeth could be very expensive indeed.
Where was oversight inside Alberta energy regulator over ICORE debacle? by Chris Varcoe, October 7, 2019, Calgary Herald
What an unmitigated mess. [AER mess that was also ERCB mess that was also EUB mess. Nothing’s changed except the names of the “repulsive” law-violating actions by endless dickheads at Alberta’s name-changing energy regulator.]
What the heck were the Alberta Energy Regulator, its former board of directors — and, most importantly, its former chief executive — doing in the ICORE debacle, as the head of the province’s powerful energy regulator helped establish a non-profit entity to train international regulators.
The AER is funded by an industry levy, and it’s no surprise most industry players were reluctant to talk deeply about problems inside the organization that regulates their sector. [Of course not! Companies get to rape, take their profits, pollute however much they like, and walk from clean up, with the AER’s blessings!]
In a statement, the Canadian Association of Petroleum Producers called the findings upsetting and said the investigations reiterated concerns that CAPP “has raised to senior Alberta Energy Regulator leadership.”
One of the most disconcerting issues in this entire episode is why the AER’s board wasn’t able to spot these problems earlier. [Or, did everyone know, and chose to do nothing? As is the usual way things are done in the filthy Hanky Panky “Brotherhood?” It seems much more likely that the massive reactions exploded because of Diana Daunheimer’s comments! Without her comments, ***posted publicly***, Ellis and Protti likely would have been given their pet ICORE padded future (as reward for their massive deregulation for industry), and quietly waved goodbye into the sunset with huge severance packages and other nice gifts]
“The AER board, including the chair, the deputy minister of energy and the (former) minister of energy, were selectively briefed throughout. They were not told things that would raise concerns,” the ethics commissioner report noted.
Auditor general Doug Wylie’s report specifically raised several issues on this front, concluding the AER board oversight “was ineffective” and that controls to protect against potential conflicts of interest failed.
“The AER board lacked both the extent of skills and full complement it needed to properly oversee ICORE actives,” the A-G report states.
“An over-reliance on management, particularly with respect to legal matters, contributed to a lack of property oversight.”
… But is there more to learn? Are there other issues inside the AER to examine? [If there are, they will be quickly hidden]
If the UCP really wants to hold a public inquiry into an energy issue, perhaps it should redirect forensic accountant Steve Allan — who’s in charge of the inquiry into foreign funding of anti-oilsands campaigns — to conduct public hearings into this situation. [That’d be hilarious! Triple farce of the “Brotherhood!”
With an organization as important as the Alberta Energy Regulator, each and every problem should be fully examined, rooted out and repaired. [All that industry ever allows when the regulator’s rot is publicly exposed and the agency humiliated, is more and more deregulation and lies, more and more freebies and subsidies to the polluters, while enabling more and more abuses to the Albertans burdened with the harms and liabilities.]
How board members at Alberta Energy Regulator were duped repeatedly, Little oversight as executives withheld information, racked up bills and pursued an expensive side project by Kyle Bakx, Oct 12, 2019, CBC News
If business school professors are looking for new material about the importance of having a strong and effective board of directors — the Alberta Energy Regulator provides a gripping case study of what not to do.
The AER’s board oversaw a regulator whose executives travelled by air first-class and stayed at $500-per-night hotels, plotted how to privatize the province’s intellectual property, and spent millions of dollars in public money on a private venture in order to secure their future employment.
In some instances, the board knew of the behaviour and allowed it to happen, while at other times, it was completely unaware of activities. Board members not only failed to provide oversight, but they often didn’t even question senior leadership. [On orders to look the other way? Keep the Hanky Panky going?]
These are the conclusions of three different investigative reports by Alberta’s Auditor General, Public Interest Commissioner and Ethics Commissioner. Each agency launched separate probes into the AER last year after whistleblower complaints about senior management.
Costly side project shut down
The AER, which is funded by a levy charged to the energy sector, oversees the province’s massive energy sector and is expected to ensure the safe and environmentally responsible development of the industry.
The reports focus largely on the AER’s failed attempt to launch a side project, called the International Centre for Regulatory Excellence (ICORE). The private venture was supposed to provide training to foreign energy regulators. In the end, ICORE was shut down less than two years after it launched and cost the AER millions of dollars.
Investigators found Jim Ellis, who was president of both the AER and ICORE, was anticipating a significant pay cut because of a change in Alberta’s provincial government and he was looking for a way to maintain his compensation level as one of the highest paid civil servants in the province. In 2017, his total compensation is stated as $728,000. [How much was McCrank paid?]
At ICORE, he and his inner circle planned to continue with lucrative salaries and luxury travel. They planned to get the venture running with AER resources, then take senior jobs there. In text messages to each other, they mused about collecting hefty compensation, suggesting $650,000 for Ellis and $500,000 for his close colleague, with a profit-sharing model as a bonus.
Even as recently as September of last year, when problems with ICORE were apparent, the AER board reasserted its support for the international project.
Hiding money, misleading board
By definition, a board of directors is supposed to provide oversight of management.
The regulator spent more than $5 million creating and operating ICORE, although investigators say the total figure is difficult to pinpoint considering how poorly expenses were recorded.
Executives hid costs and staff were told to “remove references to ICORE in their expense reports,” according to the Public Interest Commissioner’s report, to purposely “avoid attracting attention when the expense reports were posted on the AER website.”
Ellis displayed “reckless and wilful disregard” for the proper management of public funds, according to the government watchdogs.
[Why are three separate investigators calling the funds public, when the money was 100% industry’s, and why are no media correcting them? Are they all working for the war room?]
From the beginning, Ellis withheld information and misled the board, according to details in the investigative reports.
For instance, in early 2016, Ellis introduced a training concept with the board that would improve the skills of AER staff, however, he was already planning to use the training material internationally, selling it through ICORE, and was reportedly holding meetings with Mexico.
In February 2017, Ellis told the board that ICORE was created with a board consisting of AER staff. He did not disclose that he was actually the only board member nor did he mention how he was holding private talks about securing future employment related to ICORE.
In addition, investigators say Ellis also told the board that Mexico had formally joined ICORE and at least two other countries were also interested. The Auditor General discovered Mexico never formally joined ICORE and there wasn’t any evidence that two other countries were seriously interested in joining.
‘I will crucify him’: Inside the workplace culture at Alberta’s energy regulator
The board never did approve the creation of ICORE. The board also wasn’t even aware Ellis had applied for a $30-million federal grant for ICORE (which the government ultimately rejected).
According to investigators, one way Ellis tried to raise money was by monetizing a software program developed by the AER by transferring it to ICORE. OneStop is an online tool for the energy industry to submit project applications, reclamation work and renewals, among other information.
Ellis wanted to boost the coffers of ICORE by offering the software to foreign countries like Ukraine, which expressed interest.
This amounted to selling Alberta’s intellectual property. No wonder lawyers at the AER pushed back against the plan, highlighting concerns about the use of AER resources and pointing out how the OneStop program could be used to raise money for the AER itself.
Still, Ellis persisted, and according to the reports, suggested renaming the program before selling it through ICORE, writing “There must be another option. Take the experts out of the AER and recreate it. Call it something else.”
One of the Public Interest Commissioner’s recommendations is for the AER to “take any necessary measures to protect its intellectual property” relating to OneStop and to AER training programs.
Ellis and the AER’s vice president of national and international affairs, Zeeshan Syed, travelled frequently and often would book business class airfare, upgrade their seats, and stay at $500-per-night hotels.
The luxury travel was against AER policy, which states staff should use the most cost-effective method of transportation and accommodation.
One trip by Syed from Calgary to Copenhagen and London cost $8,089, while one trip by Ellis to London cost $8,789. Ellis also racked up more than $5,000 in flight change fees between March and November last year.
The ICORE-related trips were covered up, according to the reports, by often classifying them as “AER reputation meetings.”
Only after [comments by Diana Daunheimer posted publicly, including to CBC articles, led to] a series of CBC News stories about excessive executive travel at the AER, did the board conduct a review of regulator’s travel policy.
At times, there were multiple vacancies on the AER board between 2015 and 2018.
Those who were on the board did not pay enough attention to ICORE, did not ask useful questions about ICORE, and lacked certain expertise to be effective, according to the reports.
Specifically, board members needed more experience with information technology and corporate law.
Among the information they failed to gather was an ICORE business plan, governance structure, AER staff involvement, and how AER policies and legislation would be followed.
The board’s general lack of interest in ICORE was noticeable, since ICORE was not included as an agenda item at their meetings for more than a year while ICORE was ramping up.
While the board was often oblivious to ICORE activities, the chairman seems to have had more knowledge than the others.
Former chair Gerry Protti had his own ICORE email address and travelled abroad [and expensed two steak lunches for himself?] to promote the initiative, according to the provincial watchdogs. He also actively recruited prospective members for ICORE’s advisory board.
AER board members are supposed to list any potential conflicts, but Protti never disclosed his involvement with ICORE. [Protti was a VP with Encana and Cenovus, he created and Chaired CAPP, Canada’s biggest oil and gas industry lobby group. He was in conflict of interest soon as he was appointed Chair of the AER, long before the ICORE problem.]
The overwhelming support for ICORE by Ellis and Protti “deterred [other board members] from questioning ICORE further,” according to the Auditor General’s report.
Protti knew Ellis was planning to leave his job to head ICORE and also envisioned a role with ICORE himself [gotta keep those two steak lunches going!], according to the Ethics Commissioner’s report.
“He now remembers very little [intentionally?] and is trying to distance himself from ICORE,” the commissioner wrote in her report after interviewing Protti.
Neither Ellis or Protti returned messages seeking comment.
“The AER Board … did not receive complete and accurate information about ICORE. The AER board’s challenges were further aggravated by the former AER board chair’s failure to disclose his involvement in ICORE,” the Auditor General’s report states.
Since the ICORE affair, the provincial government replaced the board of directors. Ellis and members of his inner circle are also no longer with the AER or ICORE. Despite the personnel change, it’s not clear whether fundamental improvements have been made. [Of course there are no improvements made! Industry/CAPP/Kenney Gang appointed Bev Yee – who helped cover up Encana’s frac crimes to Chair the AER. She’s as Hanky a Panky a leader as Protti and Ellis combined!]
When presenting her findings, Ethics Commissioner Marguerite Trussler said she was troubled by the senior management culture at the AER under Ellis, one which attempted to mislead the board and the government.
“It still needs to be ascertained if that culture still exists,” she said.
The Auditor General’s recommendations to improve oversight of the AER board:
Establish effective processes to evaluate corporate culture and senior executive performance.
Obtain formal and periodic assertions from management that activities comply with legislation and AER policies, including policies related to conflict of interest.
Ensure officers in key risk management, compliance and internal control roles are well-positioned and supported to provide complete information about AER activities.
Review and approve CEO travel and expenses.
Ensure the primary channel of communication to the responsible ministers is through the board.
Establish processes to engage with executive staff, and other staff within the organization, to gain comfort that all significant matters have been brought to the attention of the board. [Much cheaper, more efficient and highly effective would be to remove the regulator’s legal immunity, put public interest back under its mandate, remove all its (industry’s) control of water, and include public health and economics under it’s mandate. Super simple, instant improvements in behaviour guaranteed!]
‘I will crucify him’: Inside the workplace culture at Alberta’s energy regulator, Watchdogs find a ‘culture of fear’ stifled concerns about the activities of an international side project by Tony Seskus and Kyle Bakx, Oct 10, 2019, CBC News
As provincial investigators probed allegations of wrongdoing at the Alberta Energy Regulator last year, the hunt was on at the top of the AER to identify the whistleblower who’d brought them knocking on the door.
Initially, the regulator’s CEO, Jim Ellis, thought the complainant was a long-serving geological engineer who was recently let go, a conclusion he shared with a member of his inner circle, who didn’t mince words.
“If it is Corey I will crucify him on the private side with everything in my possession in response to this,” the confidant texted to Ellis, as documented in a provincial investigation released last week.
The text was one of many communications reviewed by Ethics Commissioner Marguerite Trussler as her office examined the behaviour of the energy regulator’s former leader.
Her investigation — as well as those of Alberta’s auditor general and public interest commissioner — made headlines last Friday.
Among their conclusions was that Ellis displayed “reckless and wilful disregard” for the proper management of public funds. Their focus was the creation and operation of the International Centre of Regulatory Excellence (ICORE), established two years ago as a separate entity that would offer training to regulators around the world, which was found to be outside the AER’s mandate.
The reports also highlight what the auditor general’s investigation said was described by staff as a “culture of fear” at the public agency that stifled concerns about ICORE activities.
Even AER lawyers who were uncomfortable with ICORE were worried that speaking up would hurt their career.
[Why are the commissioners not investigating the horrific abuses and culture of fear AER regularly slams Alberta landowners with (including violating Charter rights to try to terrify citizens silent), notably those with oil and gas industry liabilities, pollution, damages, and frac’d water?]
“What struck me was almost like an atmosphere of arrogance and, on the other hand, a culture of fear that existed,” Public Interest Commissioner Marianne Ryan told a news conference Friday.
According to Ryan, it was a culture that did not support AER staff bringing forward concerns.
‘They weren’t very happy with me’
A whistleblower — who remains anonymous — ultimately did step forward in June 2018 to tell Ryan’s office about allegations of “serious wrongdoing.”
The person Ellis seems to have assumed was the complainant, Corey Froese, told CBC News he’d raised concerns about ICORE with both Ellis and human resources. Ten days after seeing human resources in the fall of 2018, Froese says he was told his skill set was no longer required and was terminated.
The text threatening to “crucify” him was sent to Ellis a week later.
Interviewed after the release of the reports on Friday, Froese said he’s happy the investigations went into such detail about what happened.
“These were things that people whispered about but nobody wanted to come out and say.”
He wasn’t even surprised to see the text exchange about him.
“I chuckled a bit,” he said. “I got to know how those people worked and how they treated people that didn’t move along with their direction, so I expected they weren’t very happy with me.”
Froese did speak with investigators whose work formed part of the three separate probes into ICORE.
Ellis, who resigned in January, has not responded to CBC’s requests for an interview to discuss the reports’ findings.
The reports also found evidence of a conflict of interest involving Ellis, gross mismanagement and waste of public resources, and critical failures related to the AER board’s oversight role.
The ethics commissioner’s report says the primary motivation behind ICORE was to provide future employment for Ellis and others.
During Friday’s news conference, Ryan acknowledged the courage of staff who spoke up and raised their concerns about ICORE.
She said her report is not a condemnation of the AER as a whole.
“It was employees of the AER that brought this matter to my attention and assisted with the investigation.”
Some AER employees were fearful about raising concerns about ICORE, Ryan’s report says.”Further, when an anonymous complaint to another authority was shared with Mr. Ellis, he and other AER executives attempted to determine the identity of the complainant.”
For Ryan, this raised “serious concerns” about the management of employee complaints within the AER.
Trussler’s report noted lawyers with the AER’s legal branch raised objections to doing ICORE legal work but they “were concerned that not supporting ICORE would have adverse career consequences.”
Her report says when the legal department started to push back, Ellis approached AER’s executive vice-president of law and, “under the guise of succession planning, suggested she step down” months ahead of her intended retirement.
Ryan said her report confirmed that some AER employees reported being fearful of disagreeing with Ellis.
She also said there were concerns within the law branch about ongoing ICORE-related requests for advice and how there “was the impression that refusing to assist, providing adverse advice or being critical of ICORE could result in adverse consequences, including termination of employment.”
The auditor general’s report found the internal whistleblowing process at the AER — separate from the public interest commissioner’s process — was ineffective and not widely known by employees.
“AER’s designated officer for the whistleblower system told us she had concerns because any complaints brought forward were to be taken to [Ellis], which would have been problematic,” Wylie’s report says.
In his comments Friday, Wylie said effective whistleblowing mechanisms are essential, and must be seen by employees as safe, secure and reliable.
The interim board of the AER, put in place recently by the UCP government, said it will take the recommendations made in the three reports seriously and take any required action to enhance public confidence [Impossible! Way too late.] in the regulator.
The board said it’s clear now “a small group of senior leaders” used AER resources in a way that is unacceptable. It also noted these individuals, including Ellis, are no longer employed there.
“There has been substantial progress already to improve governance, policies, controls, and culture,” the board said in a statement.
“We have also reinforced the value and importance of employees coming forward with concerns about questionable practices and behaviours.”
Did the NDP appoint Jim Ellis?
Read below to find out who did.
BOARD MEMBERS AND HEARING COMMISSIONERS APPOINTED, AND TWO MORE REGULATIONS MADE — THE ALBERTA ENERGY REGULATOR HAS “OFFICIALLY LAUNCHED” by Neil McCrank and Michael G. Massicotte, July 8, 2013, BLG Bordner, Ladner Gervais
By News Release issued June 17, 2013 by the Alberta Energy Regulator (the “AER” or “Regulator”), notice was provided that the AER had “officially launched today after the Government of Alberta proclaimed the Responsible Energy Development Act, ushering in a new era in energy regulation.”1
In the June 2013 edition of this Oil and Gas Bulletin (found here), we discussed the proclamation of the Responsible Energy Development Act2 (“REDA”) as of June 17, 2013 (save and except for Part 3 and other specified sections), and the making of four Regulations under REDA.
As stated in that Bulletin, at this time, the new single regulator, the AER, has only assumed the energy development regulatory functions currently administered by the ERCB. The enforcement of “private surface agreements” under Part 3 of REDA will only become available, and the AER’s assumption of regulatory functions and responsibilities from AESRD [aka, giving industry control of Alberta’s fresh water] under the Environmental Protection and Enhancement Act3, the Water Act4 and the Public Lands Act5, and from Alberta Energy under Part 8 of the Mines and Minerals Act6, will only occur, once the corresponding sections of REDA have been proclaimed in force.
This Bulletin is intended to provide an update summarizing further developments in connection with REDA and the AER, including:
The appointment of the members of the AER Board of Directors;
The appointment of the chief hearing commissioner and other full time hearing commissioners; and The making of two new Regulations under REDA: the Alberta Energy Regulator Rules of Practice, and the Alberta Energy Regulator Administration Fees Rules.
Appointment of AER Board of Directors
Under REDA, the Lieutenant Governor in Council must appoint a board of directors of the AER, consisting of a chair and at least 2 other members8, responsible for the general management of the business and affairs of the AER.9 To this end, on June 12, 2013, Cameron B. Bailey, Fred Estlin and Andrew Neigel were each appointed for a 2 year term, and David A. Chalack, Elizabeth (Liz) Dowdeswell, Peter Flynn and Sheila O’Brien were each appointed for a 3 year term.10 Earlier, in April of 2013, [Ex Encana VP] Gerri Protti11 was made Board Chair and Jim Ellis12 was named the Chief Executive Officer of the AER.
As stated by Energy Minister Ken Hughes:
With these appointments, we have built a team that will truly usher in a new era of energy regulating for the province…This team, led by Board Chair Gerry Protti and CEO Jim Ellis, will ensure our province leads the country, and the world in [Hanky Panky?] balancing resource growth with our strong environmental commitment. [Pfffft! Fraud, lies & cover-up, more like it] 13
Appointment Of Hearing Commissioners
Under REDA, the Lieutenant Governor in Council must establish a roster of hearing commissioners consisting of a chief hearing commissioner and such other individuals as are appointed.14 To this end, on June 12, 2013, Bradley T. McManus was appointed chief hearing commissioner, and Alex Bolton, Robert C. McManus, Barbara McNeil and Christine Macken were each appointed “full- time” hearing commissioners for a 1 year term.15 It has been reported that part-time hearing commissioners will be appointed in the near future.16
A panel of one or more hearing commissioners selected by the chief hearing commissioner from the roster will conduct hearings of applications, regulatory appeals and reconsiderations under REDA.17
Two Additional Regulations Made Under REDA
In addition to the four Regulations identified in our June 2013 Bulletin18 (found here), by Ministerial Orders dated May 28, 2013, the Minister of Energy has made the following two new Regulations:
a) Alberta Energy Regulator Rules of [Hanky Panky]
Practice, Alta Reg 99/201319 (the “AER Rules of [Hanky Panky] Practice”); and
b) Alberta Energy Regulator Administration Fees Rules, Alta Reg 98/201320 (the “AER Administration Fees Rules”).
These new Regulations, each in force as of June 17, 2013, are similar to and replace the corresponding Regulations previously in place21 under the now repealed Energy Resources Conservation Act22 (the “ERCA”).
a) AER Rules of [Hanky Panky]
While the AER Rules of [Hanky Panky]
Practice are similar to their predecessor in place under the ERCA23 (the “ERCB Rules”), there are some differences between them. What follows is a short summary of some of the more significant changes, as well as other commentary comparing the two sets of Rules.
i) Public Interest
Section 1 of the ERCB Rules provided as follows:
These Rules must be liberally construed in the public interest to ensure the most fair, expeditious and efficient determination on its merits of every proceeding before the Board.
Consistent with the removal of the reference to “public interest” in section 3 of the Responsible Energy Development Act General Regulation24, section 1 of the ERCB Rules has not re-appeared within the AER Rules of [Hanky Panky]
ii) Standing and Rights Afforded an Intervener
In the November 2012 edition of this Oil and Gas Bulletin (found here), we commented on the absence from REDA of the equivalent of section 26(2) of the ERCA, which affords a person standing where a decision on an application may directly and adversely affect the rights of that person.25
Section 34(2.1) of REDA, which was a late addition to the legislation26, provides that if the Regulator conducts a hearing on an application27, a person who may be directly and adversely affected by the application is entitled to be heard at the hearing. Under section 18 of the AER Rules of [Hanky Panky]
Practice , if the Regulator sets an application down for a hearing, the Regulator shall give a person who is entitled to be heard a reasonable opportunity of learning the facts bearing on the application, a reasonable opportunity to furnish evidence, an opportunity of cross-examination if the person will not have a fair opportunity to contradict or explain the facts or allegations in the application without cross examination of the person presenting the application, and an adequate opportunity of making representations in the Regulator’s presence.
These two sections largely contain the equivalent of old section 26(2) of the ERCA.
iii) New Deadlines
Consistent with the unprecedented level of sweeping regulatory reform at both the provincial and federal levels in the past year28, with the objective of streamlining the regulatory process for major economic projects, a number of time limits have been introduced in the AER Rules of [Hanky Panky]
Practice , including the following:
v) Other Changes
Other changes and things of note include the following:
Under section 3(2) of the AER Rules of [Hanky Panky]
Practice, applications must now be served on:
the registered owner of the land on which the energy resource activity that is the subject of the application is or will be located29; and
any other person that the Regulator requires,
as opposed to any person whose rights may be directly and adversely affected by a decision of the ERCB, which was formerly the case under the ERCB Rules30;
Sections 35, 36 and 37 of the ERCB Rules, allowing the ERCB to direct the parties to participate in a settlement meeting, and providing for the filing and acceptance or rejection of a settlement proposal, have not been re-introduced in the AER Rules of [Hanky Panky]
Section 37(2) of the AER Rules of [Hanky Panky]
Practice the equivalent of which did not exist under the ERCB Rules, addresses conflicts of interest of hearing commissioners by prohibiting any hearing commissioner having an interest in the subject matter of a hearing or other proceeding, whether directly or because of the hearing commissioner’s position, affiliation or involvement in or with an organization, firm or business, from participating in the panel of hearing commissioners that conduct the hearing or other proceeding;
In accordance with the Energy Resources Conservation Board Administration Fees Rules, by Notice mailed April 30, 2013 to operators of facilities in the oil and gas, oil sands and coal sectors, an industry levy was charged to fund the revenue requirement of the Energy Resources Conservation Board (the “ERCB”) for 2013.31 The fees were allocated on an industry sector basis, and calculated having regard to the ERCB’s operational requirements for each sector. Payment was due May 30, 2013. Unlike prior years, where the ERCB’s annual costs were funded by both government and industry, its revenue requirement for 2013 (determined to be almost $155 million) was funded solely by industry, in accordance with announcements made by the Government of Alberta in its 2013 Budget.
Following the proclamation of REDA on June 17, 2013, an assessment of the funding requirements for the operations of the AER must now be determined and all of the ERCB’s funding transferred to support the AER’s operations.32
Apart from adding “all wells categorized by the Regulator as commingled at December 31 of the base year” to the list of excepted wells in section 3(4)(d), and providing in section 8(7) that the Regulator may conduct the hearing of an appeal from a notice of an administration fee “orally, including by telephone, or in writing”, there are no changes of significance to the AER Administration Fees Rules, relative to the predecessor Regulation under the ERCA.
We intend to continue monitoring and reporting on further developments with the AER.
1 AER News Release, June 17, 2013 (the “News Release”), which appeared on AER letterhead containing its new web address: www.aer.ca.
2 Responsible Energy Development Act, SA 2012, c R-17.3.
3 Environmental Protection and Enhancement Act, RSA 2000, c E-12.
4 Water Act, RSA 2000, c W-3.
5 Public Lands Act, RSA 2000, c P-40.
6 Mines and Minerals Act, RSA 2000, c M-17.
7 AER News Release, June 17, 2013.
8 EDA, section 5(1).
9 REDA, section 6(1).
10 Order in Council 174/2013.
11 In the News Release, Gerry Protti is quoted as stating:
This new structure will allow the regulator’s Board of Directors to set the direction for the organization’s business, approve regulatory change, and set performance expectations for the regulator…The Alberta Energy Regulator board will operate as a corporate-style board.
12 In the same News Release, Jim Ellis is quoted as stating:
We look forward to working with the Government of Alberta to ensure we manage the transition to a new regulator in a manner that is strategic and practical, balancing the need for consistency and regulatory certainty while bringing new environmental regulatory responsibilities into the AER…This is an exciting time for energy development in Alberta, and we believe that the Alberta Energy Regulator marks an exciting change that will make a difference in the way we conduct our business and deliver results for Albertans…Albertans can be assured that the regulator’s highly trained technical staff remain dedicated to public safety, environmental protection, and conservation of our hydrocarbon resources throughout the transition.
13 CTV Calgary, “Alberta Energy Regulator fills board positions”, June 12, 2013.
14 REDA, section 11(1).
15 Order in Council 175/2013.
16 CTV Calgary, as www.ctvcalgary.ca, “Alberta Energy Regulator fills board positions”, June 12, 2013.
17 REDA, section 12(1). See also sections 12(2) and (3), and 13 of REDA.
18 Miscellaneous Corrections (Alberta Energy Regulator) Regulation, Alta Reg 89/2013; Responsible Energy Development Act General Regulation, Alta Reg 90/2013; Security Management for Critical Upstream Petroleum and Coal Infrastructure Regulation, Alta Reg 91/2013; and Responsible Energy Development Act Transition Regulation, Alta Reg 92/2013.
19 M.O. 62/2013.
20 M.O. 61/2013.
22 Energy Resources Conservation Board Rules of Practice, Alta Reg 98/2011 and Energy Resources Conservation Board Administration Fees Regulation, Alta Reg 114/2008.
23 Energy Resources Conservation Act, RSA 2000, c E-10.
24 Energy Resources Conservation Board Rules of Practice, Alta Reg 98/2011. 24 Responsible Energy Development Act General Regulation, Alta Reg 90/2013.
25 See our June 2013 Bulletin (found here) under b)(i) Section 3 – Public Interest. 25 BLG Oil and Gas Bulletin, November 2012 edition, at page 2.
26 REDA was amended November 7, 2012, before Bill 2 received Third Reading on November 21, 2012.
27 Notwithstanding that sections 7(1) and (2) of the AER Rules of Practice use the word “may” as opposed to “shall”, the net effect of these sections, similar to that under section 24 of the ERCB Rules, appears to be that a hearing must be set down if: a) a person files a statement of concern within the time set out in the notice of application; b) the person filing the statement of concern has demonstrated that they may be directly and adversely affected by the application; c) the Regulator does not consider the statement of concern to be frivolous, vexatious or without merit; and d) the Regulator determines that the objection raised in the statement of concern has not been addressed. See also sections 32, 33 and 34 of REDA, and sections 5 and 6 of the AER Rules of Practice.
28 See our January 2013 Bulletin (found here) for a summary of these reforms.
29 AER Rules of Practice, section 3(2). See section 48(1)(b)(ii) of the AER Rules of Practice for direction as to the manner of service of a document on a registered owner of land.
30 ERCB Rules, section 20(3).
31 As in past years, in response to a request by the Canadian Association of Petroleum Producers (“CAPP”) and the Explorers and Producers Association of Canada (“EPAC”), the administration fee process was also used to collect almost $2.4 million (payment of which is voluntary) to fund “broad industry initiatives” for 2013, deemed to be of general benefit to the upstream oil and gas industry (the funds were passed through to CAPP and EPAC, and used to fund non-oil sands initiatives determined by a panel comprised of CAPP and EPAC board members).
32 Energy Resources Conservation Board Bulletin 2013-16: 2013 ERCB Administration Fees (Industry Levy), April 30, 2013, at page 1 and Attachment 2, page 1.
Neil McCrank QC, P.Eng.
Michael G. Massicotte