Leader of the Pack

How the AER's Patty Johnston navigates the sticky regulations surrounding the Alberta oil sands

Patricia “Patty” Johnston, Executive Vice President of Legal and General Counsel

The Alberta oil sands have been a lightning rod for news and controversy for several years. So it’s no surprise that Alberta’s single regulating body for upstream hydrocarbon exploration, production, and transport by pipeline would feel the heat of all that attention.

However, the role of the Alberta Energy Regulator (AER) is to shed light, reducing bureaucracy as it makes the full life cycle of oil, gas, and coal production a transparent process. Much of that job falls to Patricia “Patty” Johnston, executive vice president of legal and general counsel at the provincial agency.

As Johnston explains it, Alberta passed a law in 2013 so that, in place of a patchwork of agencies dealing with different aspects of natural resource development—from exploration to extraction, production, abandonment, and reclamation—energy companies and stakeholders now have a single regulator to work with.

“The AER now has cradle-to-grave regulatory responsibility for upstream oil and gas activities and coal operations,” Johnston says. “This includes tight oil, shale gas, shale oil, both in situ and mining methods of exploration, and development in the oil sands areas of the province.”

Therefore, given the broad purview of the agency—along with the contentious dialogue around fossil fuels—how difficult is it for the legal department to manage its function?

The Word on Green

The AER and Patty Johnston are the chief enforcers of the Responsible Energy Development Act, which values green objectives along with those affecting economic development. She describes some of her organization’s work as follows: 

TECHNOLOGY

“There are thousands of kilometres of pipelines that have transported products from the oil sands for many, many years without incident and environmental impact.”

SUSTAINABLE EDUCATION

“We hold industry training sessions, conduct inspections, carry out audits, and complete investigations.”

MANUFACTURING

“The AER focuses inspections on higher-risk activities—for example, developments located near populated areas—to make sure they are being operated in a safe fashion.”

Johnston points out that stringent internal conflict-of-interest policies are applied to all AER staff, prohibiting them from having direct or indirect ownership of AER-regulated entities (spouses included). But, just as important, the AER is bound by law and is ultimately “accountable to the courts,” Johnston says. So while the agency works to navigate the difficult terrain between economic development and environmental protection, the law provides fairly clear direction.

“A very large part of the AER’s mandate includes monitoring and enforcing safe and efficient practices,” Johnston says, explaining that this also encompasses the postproduction phases of energy-resource extraction, when wells and mining sites are closed and when pipelines and other infrastructure are decommissioned.

As someone formerly involved in corporate insolvency, investment banking, and securities law, Johnston has been forced to adapt to two key dynamics in the energy field: technological advancements and social media. The first involves “large, unconventional resource plays that are more complex to regulate,” she says.

The second is a bit more unpredictable and a lot more impatient. “Historically, if there was a problem such as a spill, we could look into the root causes before responding externally,” Johnston says. “You need that time to do a considered scientific analysis. But with social media, the expectation is that we will have answers instantaneously. What people know and respond to is often based on sound bites, and it’s not contained within Canada.” 

To help tackle the challenge of social media—which falls under the AER’s legally mandated transparency requirements—the agency established a web-based incident-reporting tool. Licensees (energy companies) are required to report incidents to the AER, and information about those incidents—which may involve hydrocarbon spills affecting water bodies, off-lease lands, or pipeline right-of-ways—are then automatically posted to the tool. “It doesn’t make sense to respond tweet for tweet,” she says. “This at least allows us to be more proactive and transparent.”

WHY LAW? 

“My decision to go to law school was by default after my dream of being an animal vet was shattered. I guess what made it my second choice was the prospect of using my brain to make a difference and help people. Sounds corny, but it is absolutely true.” 

The road to becoming the chief counsel for the regulator began on a school bus for Johnston—actually, a fleet of buses owned by her mother when she was growing up in Calgary. Widowed in the 1960s with six children, her mother started the company to make ends meet, but it also wound up being a big part of Johnston’s education. “She taught me that, with hard work and determination, you can accomplish anything you set your mind to,” she says.

Today, with the Canadian Energy Research Institute forecasting $2.5 trillion in long-term economic activity for oil and gas development in Alberta, Johnston is applying the lessons she learned in her youth to keep her organization on task and compliant with guidelines.

“I believe very strongly in the power of being open and receptive to the viewpoints and perspectives of others,” she says. “It’s important to hire competent, talented people and then actually listen to what they have to say.”