How does the AER Regulate the Oil and Gas Industry?


How does the AER Regulate the Oil and Gas Industry?

The government of Alberta owns about 80 per cent of the province’s petroleum and natural gas mineral rights, which include crude oil, natural gas, coal, and the oil sands. In other words, most resources are owned by the people of Alberta through their government.

Companies can develop Alberta’s resources by purchasing rights to develop them. The AER is empowered by the Government of Alberta to regulate energy development, ensuring that it is done in a manner that is safe, efficient, orderly, and environmentally responsible over its entire life cycle.

The AER regulates the development of oil, natural gas, oil sands, and coal, as well as the delivery pipelines within Alberta’s borders. Regulation is done through two core functions: adjudication and regulation, and information and knowledge. AER approval must be given at almost every step of an energy project’s life.

The AER works to ensure that those affected by development have a fair chance to be heard. When conflicts regarding development remain unresolved among industry competitors or between companies and landowners, the AER works to help settle the issues with balance and fairness. Conflicts can be resolved through Alternative Dispute Resolution or, if required, through an AER hearing.

Finally, the AER plays an important role in collecting, analyzing, and distributing energy information—including estimates of Alberta’s energy reserves.

An AER hearing is a court-like proceeding where those who might be directly and adversely affected by an application for an energy project may participate. An AER hearing is a formal and quasi-judicial proceeding. It provides a level playing field for all participants, giving each the opportunity to present their position and question the positions of others.

Normally, a panel of AER hearing commissioners hears evidence from the applicant and from the participants (who may be represented by a lawyer). The panel considers the evidence and arguments presented and issues a written report giving the decision and the reasons for it, usually within 90 days after the close of a hearing. The report is then made public and is given to all participants.

The panel will decide to approve the project unconditionally, approve the project subject to certain conditions, or deny approval of the project.

For more information on the AER hearing process, visit AER’s Hearing webpage or see EnerFAQ: Having Your Say at an AER Hearing.

If a company is found to be operating outside of prescribed regulatory rules and regulations, the AER field inspectors may, among other options, shut down the operation immediately. If the company is unable or unwilling to comply with AER regulations, the facility could be issued a closure order until they can operate the facility safely and responsibly.

In Alberta, industry compliance with AER rules and requirements averages over 98 per cent. In the event that a company is found operating outside AER rules and requirements, the AER takes enforcement action against the company. If the infraction is minor, the company is required to correct the issue and the operator receives a notice of enforcement on the spot. A copy of the enforcement notice is also sent to the company’s head office and to the AER’s Field Surveillance and Operations Branch. The company’s compliance records are made publicly available on the AER’s website at