By: Nigel Bankes

Matter Commented On: Minister of Energy, Ministerial Order 060/2023, Delegating certain powers of the Minister under the Mines and Minerals Act and the Carbon Sequestration Tenure Regulation, to persons holding particular positions within the Alberta Energy Regulator, April 25, 2023

PDF Version: The Department of Energy and Minerals Finally Releases the Text of a Ministerial Order Delegating Technical CCS-Related Decision-Making Authority to the Alberta Energy Regulator

On April 25, 2023 Peter Guthrie, then Minister of Energy for the Province of Alberta, signed Ministerial Order 060/2023 delegating certain of the Minister’s powers with respect to carbon capture and storage (CCS) projects to staff within the Alberta Energy Regulator (AER). In my view this, in principle, is a sound decision and reflects the recommendations made by the Steering Committee of Alberta’s Regulatory Framework Assessment more than a decade ago. In the interests of transparency, I disclose that I was a member of that Committee. The Committee took the view that while the Department of Energy (now the Department of Energy and Minerals) should have responsibility for decisions related to carbon sequestration tenure and broad questions of policy, responsibility for the more technical decisions related to a CCS project, such as the conditions for issuing a closure certificate, should be made by the AER. The distinction between these different types of decisions had been blurred with the adoption of the CCS amendments to the Mines and Minerals Act, RSA 2000, c M-15 (MMA) in 2010.

On the other hand, I deplore the fact that the Minister and the Department have treated this delegation of authority as a state secret for the last eight or nine months. As I noted in an earlier post on this matter, I first learned of the existence of this delegation in late August 2023. That led me to request a copy of the Order from both the AER and the Department. The AER told me to ask the Department while the Department simply stonewalled for nearly five months before providing me with a copy of Ministerial Order 060/2023 on January 24, 2024.

In my view there is zero justification for this secrecy, and while I have a copy and ABlawg has with this post provided a secure link to the Ministerial Order (MO), the Government of Alberta (GoA), so far as I can see, has yet to publish the MO on the GoA’s “Open Government” site (yes, that’s not a joke even if it is an oxymoron), which is where ministerial orders usually appear if they are ever published.

In my previous post I canvassed at some length when there is a duty to publish a ministerial order and discussed the relevant statutes and some of the case law. I refer interested readers to that post. The bottom line is that a ministerial order must be published if it is of a legislative rather than an administrative nature. I speculated in that earlier post that MO 060/2023 was likely of a legislative nature, but I could not reach a conclusion in the absence of the text. Now that I have the text, I am convinced that the MO is of a legislative nature as it establishes general rules for all who hold or wish to hold sequestration leases and permits under the MMA.

What is the Authority for the Ministerial Order?

MO 060/2023 indicates that the Order is issued pursuant to the authority of two statutory provisions, s 21(1)(b) of the Interpretation Act, RSA 2000, c I-8 and s 9(1) of the Government Organization Act, RSA 2000, c G-10 (GOA).

Section 21 of the Interpretation Act provides as follows:

Powers in name of office

21(1)  Words in an enactment directing or empowering a Minister of the Crown to do something, or otherwise applying to the Minister by the Minister’s name of office, include

(a) a Minister acting for another Minister or a Minister designated to act in the office,

(b) the deputy of the Minister or a person appointed as acting deputy.

(1.1)  Subsection (1) applies to an enactment that authorizes a Minister to delegate, subject to any restriction imposed by an enactment or by order of the Minister.

(1.2)  Nothing in this section authorizes a deputy or acting deputy to exercise any authority conferred on a Minister to enact a regulation as defined in the Regulations Act.

(2)  Words in an enactment directing or empowering a person to do something, or otherwise applying to the person by the person’s name of office, include

(a) a person acting for that person or appointed to act in the office, and

(b) that person’s deputy or a person appointed as that person’s acting deputy.

(3)  This section applies whether or not the office of a Minister or other person is vacant.

Section 9(1) of the GOA provides that:

9(1)  A Minister may in writing delegate to any person any power, duty or function conferred or imposed on the Minister by this Act or any other enactment.

(2)  Subsection (1) does not apply to any power or duty of a Minister to make regulations as defined in the Regulations Act. (emphasis added)

The principal source of authority to delegate seems to be s 9(1) of the GOA as I anticipated in my earlier post, and I am not sure what s 21 of the Interpretation Act adds.

What does the Ministerial Order Do?

The Ministerial Order provides that numerous powers and functions that Part 9 of the Mines and Minerals Act, (Sequestration of Carbon Dioxide) and the Carbon Sequestration Tenure Regulation, Alta Reg 68/2011 (CSTR) confer on the Minister can now be exercised by persons within the AER holding particular titles or offices, such as: Director, Oil & Gas Subsurface; Waste & Storage, Director; In Situ, Manager; In Situ Applications Approvals, Manager; Oil & Gas Subsurface Applications, Manager; Geology & Hydrogeology, or Senior Reservoir Engineer.

The MMA Delegations

The Ministerial Order delegates to officials with the AER the following powers, functions, and designations of the Minister under the MMA:

  • The monitoring, measurement, and verification (MMV) plans of a Part 9 sequestration lessee must now be submitted for approval to the AER rather than the Minister (MMA at s 116(3)(a));
  • MMV compliance reports must now be submitted to the AER rather than the Minister (MMA at s 116(3)(c));
  • Closure plans must also go to the AER (MMA at s 116(3)(e));
  • An application for a closure certificate goes to the AER rather than the Minister (MMA at s 120(1));
  • It is the AER rather than the Minister who can reject an application for a closure certificate if the AER considers that the application is not complete or accurate (MMA at s 120(2));
  • And crucially, it is now the AER rather than the Minister who must be satisfied that the sequestration lessee has fulfilled all of the preconditions to the issuance of a closure certificate, including the question of whether “the captured carbon dioxide is behaving in a stable and predictable manner, with no significant risk of future leakage.” (MMA at s 120(3)(f)).

The Delegations Under the Carbon Sequestration Tenure Regulation

The Ministerial Order delegates to officials with the AER the following powers, functions, and designations of the Minister under the Carbon Sequestration Tenure Regulation:

  • It is now the AER rather than the Minister that approves the MMV plans that must be filed by permittees and lessees (CSTR at ss 7(1) and 15).
  • Similarly, the AER now has the authority to approve closure plans and the renewal of those closure plans: (CSTR at ss 18 and 19).

What Sorts of Powers has the Minister Retained?

The MO 060/2023 delegates significant powers to the AER, or more precisely certain officials within the AER. The most significant delegation decision is the delegation of the authority to determine if an applicant has met the conditions for the issuance of a closure certificate. This is significant since the issuance of such a certificate is the trigger for the transfer of liability from the lessee to the Crown.

But the Minister does retain important powers. For example, the Minister retains, logically enough, all of what might be considered to be the Crown’s proprietary powers, that is to say the right to enter into permits and leases on behalf of the Crown. The Minister also retains responsibility for the Post-closure Stewardship Fund (MMA at s 122) including the power to establish the contribution rates for the Fund (CSTR at s 20).

The Minister also retains some powers that one might have expected to be included in the delegation. For example, the Minister continues to have the power to approve an application to group sequestration leases for the purposes of submitting a single MMV plan for the grouped leases (CSTR at s 14). It is surprising that this power is not included in the delegation since the decision to approve or not should be a technical decision and the AER will be better placed to make this decision than the Department.

Scope of Application of the Delegation Provisions

These delegation provisions apply to ministerial powers under Part 9 of the MMA and the CSTR. They are of no significance to those cases in which a party obtains sequestration rights under some other provision of the MMA, such as a s 9 Crown agreement (see my earlier posts on some of the distinctions between Part 9 permits and leases and Crown agreements here and here). The Minister and the Department have yet to release the form of the sequestration agreement that will be issued to the operators of storage hubs, notwithstanding the announcement of the successful bids in March and October 2022.

Judicial Supervision

The delegation in MO 060/2023 brings to the fore a question relating to judicial supervision that I had not considered before. The question is this: how are decisions made by AER officials pursuant to this delegated authority to be reviewed by the courts? Should it be on the basis of an application for judicial review in the Court of King’s Bench on a reasonableness standard of review (which would be the case if the Minister made the decision), or on the basis of the permission to appeal (confined to questions of law or jurisdiction) provisions of the Responsible Energy Development Act, SA 2012, c R-17.3, s 45. I can think of arguments both ways, but I have not done the research to assess what the authorities say on this general point.

Conclusion

I think that this delegation is a step in the right direction in terms of clarifying technical decision-making in relation to CCS permits and leases, but it does nothing to clarify the nature of hub sequestration agreements or how the MMV and closure issues will be dealt with in these agreements.

And finally I reiterate a recommendation that I made in my earlier post on MO 060/2023, namely that, at a minimum:

… all ministries and departments, including the office of the premier, should be required to publish a monthly list of all ministerial orders with a brief title and abstract and that such lists should be made available on the Open Government Program portal.

This post may be cited as: Nigel Bankes, “The Department of Energy and Minerals Finally Releases the Text of a Ministerial Order Delegating Technical CCS-Related Decision-Making Authority to the Alberta Energy Regulator” (29 January 2024), online: ABlawg, http://ablawg.ca/wp-content/uploads/2024/01/Blog_NB_Ministerial_Order_060_2023.pdf

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