An Alberta Energy Regulator’s Close Ties to Danielle Smith

On March 4, an association of landowners with abandoned wells on their property met to hear from David Yager, a director of the powerful Alberta Energy Regulator, the authority tasked with regulating all energy and mineral development in the province.

“Sixteen years ago, I met this woman, you might know the name ‘Danielle Smith,’” Yager told the assembled members of the Wheatland and Area Surface Rights Society, according to a recording of the annual general meeting obtained by The Tyee.

“We went for lunch one day and it turns out that she was an energy policy nerd and I'm an energy policy nerd. So we clicked.”

When Yager handed out his business card to landowners later, it set off an alarm bell for Mark Dorin, a landowner and oil industry veteran.

The card stated Yager — appointed to the Alberta Energy Regulator, or AER, nearly a year earlier in April 2024 — was also a “Special Adviser to the Premier, Executive Council.”

To Dorin, these were incompatible roles.

“You can't have your foot in one board at the AER and be in cabinet,” Dorin said. “The AER is supposed to be arm's-length. That is fundamental in a democracy.”

Smith defends Yager appointment

The government of Conservative Premier Alison Redford established the AER on June 13, 2013, as part of the Responsible Energy Development Act. It was to regulate energy development in Alberta in what was supposed to be a safe, environmentally responsible manner that nonetheless promoted development of energy resources.

Most importantly, it was meant to operate independently of the provincial government. Critics say it never has and some, like the Alberta NDP and environmental groups, have long accused the AER of being co-opted by the energy industry.

In the Alberta legislature on March 18, NDP Opposition Leader Christina Gray questioned Yager’s dual roles.

“Mr. David Yager has been representing himself as a special adviser to the premier and executive council,” she said.

“Is it appropriate for him to be paid by the executive council and by the arm’s-length AER?”

The Tyee has confirmed Yager has received at least four sole-source contracts totalling nearly $500,000, two from the executive or cabinet, which the premier heads, including a current contract that runs until February. The third contract is from Alberta Energy for “professional services.”

In response to Gray’s query, Smith defended Yager’s appointment without addressing the inherent conflict-of-interest allegation.

“Dave Yager has more than 50 years’ experience in the upstream oil and gas industry,” Smith told the legislature.

“There are very, very few individuals who know the industry as well as he does. That is what I have discovered as I have been learning the industry myself.”

“I made a joke to him one time, asking him what percentage of energy knowledge I now have after studying under him for some 16 years, and he said: about 10 per cent of what he knows. So that is not bad. I expected it actually to be a little bit less.”

Yager’s well equipment business

Smith tagged Yager to lead an advisory panel she assembled to develop a long-term plan for Alberta’s energy future, Global News reported in 2023. The panel was made up of more than 150 energy company CEOs.

“Of course I’m going to take advice from CEOs,” Smith told Global. “Who else am I going to take advice from?”

Critics argued Yager’s role constituted yet another conflict of interest. At that time, Yager was also the CEO and owner of Winterhawk Well Abandonment, a company that rents equipment to reclaim abandoned wells. In his advisory role to Smith, Yager made suggestions for providing incentives to clean abandoned and orphaned wells.

Drew Yewchuk is an expert in environmental law and has written extensively about Alberta’s energy regulatory regime during his time at the University of Calgary and now at the University of British Columbia, where he is completing his PhD.

“The regulator is supposed to have independence from the elected party and the immediate executive branch,” Yewchuk said. But given that the United Conservative Party cabinet appoints AER board members, there is no “serious guarantee that the board members are going to be independent from that cabinet.”

Yewchuk pointed out that Smith could directly influence the AER’s direction through Yager.

“And Smith will say, ‘I had nothing to do [with it]; it is an independent regulator,’ and that is a consistent concern for administrative bodies in Canada, that the government sets them up, then controls them through appointments,” Yewchuk said.

Recently Yager came under fire for a report on how the province should deal with its decades-old problem of unreclaimed, inactive wells. The Globe and Mail obtained a draft version of Yager’s “Mature Asset Strategy” report, for which he had consulted with landowners like Dorin.

Yager’s draft report recommended taxpayer money ought to cover insurance liabilities for companies to plug and reclaim about 80,000 inactive wells in Alberta. But the final version, released earlier this month, instead recommended that an industry-financed insurance fund should be managed by the province.

‘We were not the gamblers’

Dorin has fought with the AER for years regarding decisions on his land. He is adamant that landowners and taxpayers should not be on the hook for abandoned-well cleanup costs.

“We were not the gamblers that decided to drill these unprofitable wells,” he said. “We are indemnified under the laws of Alberta. We got to keep it that way. They are the ones that want to change that.

“So they want to privatize the profits and socialize the liability.”

Yager’s report included a section that shifted the blame for struggling small oil companies away from their own decisions to external factors like costly regulations and environmental policies.

Yewchuk, the environmental law expert, said it is unrealistic to believe that “Yager would serve anyone's interest but the small and medium producers in the oil and gas service industry, because that is what he has done for his whole public life.”

Yager did not respond to email and voice mail messages left for him in which he was asked about his alleged conflict of interest.

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