Regulatory Appeal – Section 106(1) Declaration
In this decision, the AER considered requests from two individuals (the “Requesters”) under section 38 of the Responsible Energy Development Act (“REDA”) for regulatory appeals. The Requestors sought to appeal the decision of AER Compliance and Liability Management (“CLM”) to issue declarations under section 106(1) of the Oil and Gas Conservation Act (“OGCA”) naming the Requesters (the “Decision”). The AER granted the requests for regulatory appeal.
Section 38(1) of REDA sets out the test for eligibility for a regulatory appeal. It provides that:
38(1) An eligible person may request a regulatory appeal of an appealable decision by filing a request for regulatory appeal with the Regulator in accordance with the rules. [Emphasis added.]
The AER noted that there are three parts to the test. First, the requester must be an “eligible person” as defined in section 36(b) of REDA. Second, the decision from which the requester seeks a regulatory appeal must be an “appealable decision” as defined in section 36(a) of REDA. Third, the request must have been filed in accordance with the AER Rules of Practice (the “Rules”).
The AER noted that the requests were filed in accordance with the Rules, so the key questions to be answered were whether the Decision was an appealable decision and whether the Requesters were eligible persons.
The term “appealable decision” is defined in section 36(a)(iv) of REDA to include:
a decision of the Regulator that was made under an energy resource enactment, if that decision was made without a hearing…
The AER noted that the Decision was made without a hearing under section 106(1) of the OGCA, an energy resource enactment. It was, therefore, an appealable decision.
The term “eligible person” is defined in section 36(b)(ii) of REDA to include:
a person who is directly and adversely affected by a decision [made under an energy resource enactment without a hearing]…
The AER noted that to be eligible persons, the Requesters must be directly and adversely affected by the Decision.
The AER explained that the section 106(1) declarations require the Requesters, or any regulated party directly or indirectly controlled by them, to, upon application to the AER, inform the AER that the declarations are in effect and that the Requesters have control of the licensee or approval holder. In accordance with subsections 106(3)(b) and (c), the AER may refuse to consider any application from the Requesters, or any other regulated party directly or indirectly controlled by them, or require the submission of abandonment and reclamation deposits prior to granting any licence, approval, or transfer of a licence or approval to the Requesters or any regulated party controlled by them. Further, the Requesters are included in a list of individuals named under section 106(1) of the OGCA that the AER maintains on its website.
The AER found that the declarations clearly limit the Requesters’ ability to participate in the energy industry in Alberta. Thus, it is reasonable to conclude that the declarations may result in reputational harm to the Requesters. Therefore, the AER determined that the Requesters were directly and adversely affected by the Decision, and there was some merit to the requested appeals.