Alberta’s Regulator Met with Northback Before Reversal. Why?

The Alberta Energy Regulator refused to answer questions about a meeting between its senior executives and representatives of Australian billionaire Gina Rinehart’s Northback Holdings Corp. held less than a month before the regulator granted it permission to do exploratory work on the controversial Grassy Mountain project.

On April 17 two representatives of Northback, Patrick Donnelly, a prominent Vancouver-based mining geologist, and Sanjiv Manchanda, one of the most senior executives inside Gina Rinehart's private mining empire, met with Alberta Energy Regulator CEO Rob Morgan and AER board chair Duncan Au at the AER’s offices in downtown Calgary.

Four years ago, the regulator said no to the same Grassy Mountain mining project. But on May 15, the AER approved a $2.5-million exploration and drilling plan — a step that could reanimate the controversial development.

The AER, which has existed under different names since 1938 in the province, describes its role as providing for “the safe, efficient, orderly and environmentally responsible development of energy resources.” Its decisions are required to be “fair, transparent and impartial.”

The Tyee learned of the April 17 Calgary meeting and sent questions about it to the AER. The regulator refused to answer these five questions:

Why would the AER’s CEO and its board chair meet with members of a corporation just weeks before the publication of a major regulatory decision that affects the operations of that corporation in Alberta?

What was discussed at this meeting and did it include Northback’s outstanding lawsuit against the AER?

Could public perception of such interactions prior to a major decision undermine confidence in the impartiality of the AER?

Who called the meeting?

What was the agenda?

The Tyee asked an additional question, which did garner a response from AER media management specialist Renato Gandia:

Were any of the hearing commissioners on the Northback decision involved or any of the technical or legal staff assisting the hearing commissioners?

“Hearing commissioners did not attend the meeting referenced,” said Gandia.

He added that “hearing commissioners are independent adjudicators appointed by the Government of Alberta’s Orders in Council” and that they must adhere to a code of conduct. In other words, they must be impartial.

“No further information will be provided,” wrote Gandia.

The public deserves a better accounting of the meeting, according to Nigel Bankes, a legal scholar and University of Calgary professor emeritus.

Bankes told the Tyee that “common sense if not the law suggests that principles of transparency and accountability demand that the AER be more forthcoming, especially given the public’s demonstrated interest in Northback’s renewed drilling on Grassy and what was seen by many as illegitimate interference by the minister in the AER decision to accept Northback’s application.”

The road to the meeting and the reversal

In 2021, a joint panel review, a public hearing process that included two members of the AER, rejected Rinehart’s mining project as uneconomic, a threat to water security and not in the public interest. The provincial government then classified the project as “cancelled.”

Rinehart, however, aggressively sought to overturn that joint panel review decision unsuccessfully in three different courts. When that effort failed, she sued the government directly, accusing it of a conspiracy. Her company also submitted three new applications for coal exploration in the fall of 2023.

But to get AER approval Northback somehow had to sidestep a popular 2022 provincial moratorium on coal exploration and development that banned any new applications with the exception of “advanced coal projects” — meaning those already approved and underway.

In November 2023, Alberta Energy Minister Brian Jean wrote a letter to the AER suggesting that the regulator effectively ignore its 2021 decision and now consider Grassy Mountain to be an “advanced coal project.”

At the time, Bankes told The Tyee that Jean’s directive “smacks of political interference with the regulatory processes of the AER.”

The courts agreed, calling Jean’s letter to the AER highly questionable and possibly an error in law. In 2024 the Court of Appeal granted the Municipal District of Ranchland, where the mine will be located, leave to appeal on the question of whether the AER had relied excessively on the minister’s letter and not the 2022 ministerial ban in deciding to accept the applications.

After Jean’s intervention, the AER, despite the legal challenge, appointed three commissioners and held hearings on Northback’s exploration applications, which ended in January 2025. It has never held a hearing on a coal exploration application.

Shortly afterwards the government cancelled the 2022 coal moratorium altogether in response to $15 billion worth of lawsuits from Australian coal speculators.

The government reversal reactivated nearly 400,000 hectares of coal leases in the eastern slopes and effectively killed the Court of Appeal case. At the same time the government invited the coal industry to help write a so-called coal modernization initiative without public input.

Smith’s latest remarks

Just after the AER made its May 15 decision greenlighting Northback’s mining plans for Grassy Mountain, Premier Danielle Smith intimated on a radio talk show that Northback was re-exploring the well-bored mountain to see if an underground mine might be feasible.

No evidence in the AER application or decision supports Smith’s assertion. Rinehart’s project has always been an open-pit mine. Moreover, Energy Minister Brian Jean signalled in 2024 that an open-pit rather than an underground method would be allowed for Grassy Mountain and grandfathered into any new coal regulations.

Bill Trafford, who served on the government-created Coal Policy Committee that in 2021 warned that the majority of Albertans remain opposed to coal mining in the eastern slopes of Alberta’s Rockies, accused Smith of flip-flopping with much at stake.

“How do you believe in the honesty and respect for Albertans of our political leaders when they decide to put a moratorium on coal mining and then decide to remove it as soon as lawsuits are being brought forward?” asked Trafford.

“Then go on a radio show and say no open-pit mining. That’s two flips and I expect a flop next.”

For years now, landowners, ranchers, conservationists, musicians, hunters, irrigators and many First Nations communities have strongly opposed the Grassy Mountain project and related mining proposals in the eastern slopes because of the threat they pose to wildlife habitat and drinking water critical for hundreds of thousands of Albertans.

AER’s impartiality under scrutiny

The AER’s credibility as the impartial regulator in charge of preventing destructive projects has been compromised, critics say.

They point to the appointment of David Yager as an AER board member last year.

Yager is Smith’s friend and special energy adviser and has earned half a million dollars in contracts from her government.

In his role as adviser to Smith, Yager recently wrote a report on Alberta’s multibillion-dollar abandoned wells problem that advised the government to deregulate the cleanup process and blame environmentalists for changing industry’s economic fortunes.

Critics panned most of Yager’s report as superficial and biased.

The recent appointment of Rob Morgan as CEO has also raised eyebrows about the agency’s claim to independence. Morgan, an oilpatch veteran and lobbyist, served for seven years as the CEO of Strathcona Resources, Canada’s fifth-largest oil producer, before being appointed as the AER’s CEO last year.

Indigenous and environmental groups have characterized Morgan’s appointment as a sign the AER has become a “captured regulator.”

The AER also faces legal troubles. In oilsands country, the Athabasca Chipewyan First Nation sued the AER and Imperial Oil in 2024 for negligence, nuisance and violation of treaty rights by allegedly failing to notify the community of massive oilsands mining waste spills between May 2022 and February 2023.

“The AER is supposed to regulate the energy sector in Alberta to ensure safety and environmental responsibility. They have spectacularly failed on this front,” Athabasca Chipewyan First Nation Chief Allan Adam said last year.