The government of the Northwest Territories has opted to model several other Canadian jurisdictions in appointing its energy minister as head of the new NWT regulator.
As of Apr. 1, Industry, Tourism and Investment (ITI) Minister David Ramsay will be in charge of mining and onshore oil and gas regulation in the NWT, outside of the Inuvialuit Settlement Region and Norman Wells Proven Area, where the National Energy Board (NEB) will remain in charge.
The move to appoint a cabinet minister to the position is one modeled after Saskatchewan, Manitoba and Yukon.
“Appointing Minister Ramsay as regulator is consistent with our goal of having Northerners in charge of decision making and will ensure that regulatory practices reflect Northwest Territories priorities, support sustainable development and provide industry with a clear and predictable regulatory process,” said Premier Bob McLeod.
Environment and Natural Resources Minister Michael Miltenberger said the GNWT chose to harness its own regulatory capacity rather than continuing to employ a federal agency in the spirit of true devolution.
“We initially were looking at, early on, keeping the NEB as regulator. But what it meant to us politically is that we’d have a federal board, federally appointed – I’m trying to think if there’s even any Northerners on it – making decisions on our behalf, but responsible first and foremost to the federal system and to the federal minister and a mandate that’s not ours,” Miltenberger told The Journal.
“We made the decision that we, the government, were going to be the regulator…We have enough links to the federal side with the MVRMA (Mackenzie Valley Resources Management Act), we didn’t want to have an additional link on the devolution side.”
Ramsay said the model will be the most “economical, efficient and accountable” way to ensure NWT priorities, public health and safety, environmental protection and the needs of industry are met.
He said there would be measures in place to ensure an appropriate degree of separation between his duties, and that he would be guided in the role by an “integrated resource management approach” to ensure “fair and equitable” decision-making.
“It should be noted that many decisions of the regulator will not be taken directly by the minister,” Ramsay said. “Where it makes sense, responsibility for decision-making will be delegated to independent, expert staff in the department of ITI.”
Regulator creates conflict of interest worries
The move to assign a cabinet minister to the regulatory portfolio has created some concern in the legislature. Weledeh MLA Bob Bromley said the shift from having an arm’s-length agency, such as the NEB, in charge of petroleum to a member of government is troubling.
“Just like we don’t let cabinet decide court cases, there are very good reasons to keep oil and gas, land use planning and land and water permits out of the political realm and under the control of impartial boards,” Bromley said.
“We know ITI interprets its role to be one of promoting and subsidizing industry. This is clearly a conflict of interest,” he added, accusing the GNWT of making “power grabs” during the transition.
But according to Miltenberger, there are firewalls in existence to prevent political interference in what is supposed to be an impartial decision-making process.
“When you talk responsible ministers, some people think it means the ministers are going to do everything, but in fact that’s not the case,” he told The Journal. “Responsible ministers implies that there’s some powers of delegation under common law…We have to be very careful, very aware of these administrative law principles in how we act and structure ourselves so that we are seen to be as neutral and objective as we can be. We’ve got to know what our authorities are, what we do directly ourselves or delegate down, and we want to be very careful about creating any kind of apprehension of bias.”
The premier added that Lands would be primarily looking after the environmental assessment process, not ITI, and that having three responsible ministers alongside the review board system would ensure decisions made on development are transparent.
New oil and gas office created
A new Office of the Regulator of Oil and Gas Operations is being integrated into ITI, which will include a Chief Conservation Officer and Chief Safety Officer, as established under new mirror legislation for petroleum operations.
Funding for the new office will be drawn from the reserves established for unanticipated devolution-related costs since the decision to create the office was made after the 2014-15 main estimates were completed. In the future, it will be funded through the regular business planning process.
The two new officers will be responsible for ensuring public health and safety, conserving resources and protecting the environment.
The department plans to apply policies inherited from the NEB initially, making adjustments going forward through a “devolve and then evolve” strategy, Ramsay said. Both the NEB and the Alberta Energy Regulator will provide technical support services to the oil and gas office after devolution for two years.
“These technical services will assist with the decision-making process, but ultimately, the decision will be made by the NWT Regulator, consistent with NWT legislation and regulations,” Ramsay said.
New responsibilities for mineral development taken on by ITI will include policy and planning, issuing licenses and permits for prospecting, and recording mineral claims.