The Alberta Energy Regulator (AER) has a new boss, an engineer with 40 years of experience in the oil and gas patch.
Oil patch veteran Rob Morgan stepped into the AER’s new CEO role on February 18.
Interestingly, six of the seven directors on the AER board who appointed the new CEO, also happen to be oil and gas insiders.
Decades of Industry Experience
Morgan will help the AER “turn the page” as a “responsible and effective regulator.” At the same time, the province aims to increase oil and gas production and tap new markets, said Duncan Au, AER Board Chair, in a media statement.
Before taking the reins at the AER, Morgan was president and CEO of Strathcona Resources Ltd. for almost seven years. The Calgary-based company is the fifth-largest oil producer in the country and has oil and gas operations in northeastern BC’s Montney basin, Cold Lake and Lloydminster, Saskatchewan.
During his tenure at Strathcona, Morgan led implementation of an innovative system that uses waste heat recovery to generate carbon-free electricity at the company’s Orion thermal oil facility near Cold Lake. The system, set to be completed in 2025, will cut 740,000 tonnes of GHG emissions over the oil operation’s lifetime.
Morgan’s former company also has 513 inactive wells, accounting for 31% of its total wells that remain uncapped, unsealed, or unreclaimed, according to the very energy regulator he is set to lead. The Globe and Mail reports that Morgan has no concrete plan to address the costly issue of inactive wells—estimated to require at least tens of billions of dollars for cleanup—but intends to consult with staff and stakeholders.
Tasked With Cleaning Up the AER
Morgan, who promises to “provide the necessary safeguards for the environment while ensuring industry can deliver on the safe and innovative development of Alberta’s resources,” has his work cut out.
The energy regulator’s performance on sensitive files has been under the microscope. The AER has also faced accusations of secrecy and lack of transparency and accountability.
Last March, Athabasca Chipewyan First Nation launched a lawsuit against the regulator after it waited almost a year to tell the northern Alberta nation that a 5.3 million litre leak from Imperial Oil’s Kearl mine in 2022 contained toxic tailings.
Over the past several years, the Alberta Court of Appeal has greenlighted at least two appeals of the AER. One relates to a decision to review Northback Holdings’s Grassy Mountain exploratory drilling application as an advanced coal project.
Another appeal concerns reclamation work and what University of Calgary resource law specialist Nigel Bankes calls the energy regulator’s “opaque decision-making” process.
“I have long argued the AER needs to provide a more transparent and publicly accessible record of its decision-making,” wrote Bankes in a blog post last October.
More AER Secrecy
Last January, the AER was caught intentionally downplaying the cost of cleaning up abandoned oil and gas wells at $33 billion. Internal documents obtained by The Canadian Press revealed the actual cost to be much higher at $88 billion. Also, they uncovered a staff recommendation to keep the higher estimate secret not to scare investors or the public.
Martin Olszynski of the University of Calgary’s law school likened this information holdback to the delayed release of Imperial Oil’s toxic spill at Kearl north of Fort McMurray.
“This is all a manifestation of the same disease — regulatory capture of the regulator by the industry,” he told CBC News.
All eyes will be on Morgan to see if he can fix the AER’s accountability, transparency and independence challenges.
