Administrative Penalties

 

Administrative Penalties

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The Alberta Energy Regulator (AER) has strict requirements to protect public safety and the environment. When companies fail to follow these requirements, they face enforcement action, which can include an administrative penalty.

The AER may issue a penalty under more than 10 different pieces of legislation.* Penalty amounts differ under each piece of legislation, but all penalties are based on the seriousness of the contravention and its impacts on public safety, the environment, or production of the energy resource.

The AER may issue penalties that are higher or lower than the base amount set out in the legislation depending on seven factors, including the degree to which the company was negligent, whether the company willfully committed the offence, steps taken by the company to address the contravention or limit the extent of loss or damage, and the company’s history of compliance with AER requirements.

If the contravention occurs over a number of days, the AER can issue a penalty for each day. The maximum daily penalty is $5000.

The diagram below explains how penalties are determined. In short, the more serious the contravention and the greater the impact, the higher the penalty.

Admin Penalties Graph

How contraventions are assessed

Major: release of a substance to the environment with the potential to cause an impact; failure to report a release; threat to public safety; activity is unauthorized and wouldn’t have been approved; failure to conserve an energy resource; or intentional disregard of requirements.

Moderate: failure to meet performance requirements, immediately report a contravention of the conditions of an approval, submit a required report, or perform required tasks in authorization or legislation; or activity is unauthorized but might have been approved.

Minor to none: administrative issues related to documentation (e.g., late submission of required report).

How impact or loss/damage is assessed

Major: release of a substance to the environment or a risk to public safety occurred or was likely to occur; release of a substance to the environment that would have caused lasting damage over a significant period of time if immediate action wasn’t taken; or the loss of an energy resource.

Moderate: moderate risk to the environment or public safety if the contravention wasn’t addressed.

Minor: loss or damage unlikely to occur.

None: no potential for damage or resources loss.

Examples

Many different situations that will result in a penalty. However, to help put things into context, here are a few examples of what actions could result in a penalty if an oil spill occurred. Please note that these are only examples, and the AER will look at each situation individually in deciding how to classify a contravention.

1. Contravention: Minor

Impact: None
The company failed to submit an administrative report on time, and there was no potential for impacts on the environment.

2. Contravention: Moderate

Impact: Moderate
The company failed to operate the well according to the regulatory requirements, resulting in a small oil spill off lease that was easily cleaned up and had minimal potential for impact, and the environment naturally returned to its original state.

3. Contravention: Moderate

Impact: Minor
An AER inspector identified several areas that have minor oil staining on the well site and directed the company to clean it up. Loss or damage was unlikely, and if there were impacts, they would be minor.

4. Contravention: Major

Impact: Major
Oil spilled into the wetland and had the potential to impact wildlife. Significant effort was needed to clean up the spill and restore the environment to its original state.



The Compliance Dashboard demonstrates how the AER is involved in incident response, investigations, compliance, and enforcement. The AER also publishes a number of educational resources—presentations, FAQs, brochures, and guidance information—that relate to AER directives, rules, and regulations.

*Please note that the information on this page does not apply to administrative penalties assessed under the Mines and Minerals Act.