Protecting Alberta’s ‘centre of gravity’: New energy regulator wants to restore trust

Jim Ellis, president and CEO of Alberta’s newly reformed energy regulator and a retired Canadian Army colonel, gets this question often: How can a former tank commander like him come out of war zones and segue into one of Alberta’s most senior energy jobs without missing a beat?

“I found the military and what I am doing right now to be very similar,” Mr. Ellis, who in his last major overseas assignment in 2004/2005 was the senior commander for Canada’s mission to Afghanistan, said in an interview in the glassy headquarters of the Alberta Energy Regulator (AER) in downtown Calgary.

Both involve high stakes, high pressure and lots of emotion, and both are about interacting with politicians and the public, fighting issues on the ground and internationally, he said.

The get-the-job-done, keep-it-simple attitude served Mr. Ellis well in the past year, when he led a sweeping restructuring of the province’s energy regulatory regime.

It was the highest profile assignment for Mr. Ellis, 56, since his retirement from the military in 2006, which led to a dazzling second career in Alberta’s public service, including stints as deputy energy minister and deputy environment minister.

The AER overhaul involved merging three entities with lots of history and little interaction — the Energy Resources Conservation Board and the regulatory functions of the provincial departments of energy and of environment — while continuing to oversee a booming industry with 180,000 active wells and 400,000 kilometres of pipelines.

The exercise was so intense it was like changing tires in a moving vehicle

It wasn’t just cosmetic change. The restructuring involved busting silos and crafting a matrixed organization able to call on experts from any area to help out. Some 250 people were moved in from government jobs to join the regulator. Meanwhile, 35,000 applications had to be reviewed.

The change-management exercise was so intense it was like changing tires in a moving vehicle, he said.

But the mission has been accomplished, and Alberta is now home to an independent agency funded by industry, with a budget of $200-million and a staff of 1,200, that oversees all aspects of energy development — from approving putting a fence around a pump jack, to multi-billion-dollar oil sands mines, to restoring land to its natural state when development stops.

Mr. Ellis is now moving to the next stage of his reforms. It involves shaking up many aspects of the energy sector during the next three years — from introducing fixed timelines for development applications to nailing down reduction targets for oil sands tailings ponds.

They are long overdue. Industry has been calling for oversight that is more efficient and more relevant to today’s projects. The AER plans to eliminate duplication of regulations and abandon those that are no longer needed. It’s committed to reducing costs by $60-million annually. It will put greater emphasis on higher risk projects.

But with industry watchers, from environmental organizations to aboriginal communities, clamoring for better environmental protection and tougher rules to reduce the impact of development, Alberta’s energy watchdog will also introduce tighter controls.

In addition to tightening the rules on tailings management, the AER plans to introduce benchmarks to reduce water use in the oil sands and in shale operations, ensure that flaring of gas is within provincial guidelines and clamp down on aging infrastructure.

At the same time, the AER is anticipating it will have to review 60,000 to 65,000 applications this fiscal year as oil and gas production continues to grow.

We are the centre of energy development basically in the world. Everybody is watching

But there is one goal Mr. Ellis is particularly keen to achieve: restoring trust so that anyone watching oil and gas production in Alberta — particularly in the oil sands — can count on its watchdog to deliver.

“In military strategic planning, it’s called the centre of gravity,” he explained. “It’s a piece that you have to protect at all costs, or everything else doesn’t matter. We can be the most protective regulator in the world, but if people don’t trust us, and don’t rely on what we are saying, we don’t have credibility, none of that other stuff matters.”

Alberta’s energy regulations have been highly regarded and copied in Canada and internationally. Mexico, the U.K., Romania, Hungary, Quebec, the Northwest Territories, are among jurisdictions cooperating with the AER.

But they have also been under attack as part of growing international scrutiny of the oil sands. Many believe Alberta’s regulators are too soft on industry.

In a survey in 2010 by the International Energy Agency, Alberta’s regulator ranked in the middle of the pack.

With the world’s third-largest oil deposits, Mr. Ellis said the province must do better.

To that end, the AER plans to hire experts this fall to build a model showing what a best-in-class regulator looks like.

It will then ask stakeholders whether the AER measures up and what it needs to do to get there. The model will be peer reviewed. It will be made available to regulators in other jurisdictions so they, too, implement the best possible oversight of their energy resources.

“We need a trusted regulator to step up and say, this is what industry is doing, and in this area they need to improve. If you want to know what is really going on, come and talk to us,” Mr. Ellis said. “We are the centre of energy development basically in the world. Everybody is watching. We have an opportunity as a regulator to make a huge difference here.”


More Than 10 Million People Got Insurance Because Of Obamacare, Feds Say

The number of Americans without health insurance declined by 10.3 million because of Obamacare enrollment, according to a report from the Department of Health and Human Services and the Harvard School of Public Health, published in The New England Journal of Medicine on Wednesday.

That represents a reduction in the uninsured rate for adults aged 18 to 64 from 21 percent last September to 16.3 percent this April, the HHS analysis concludes. The lower rate remained stable through June. The first open enrollment period under Obamacare began Oct. 1, 2013, and officially ended March 31, 2014.

The adult uninsured rate has declined across all ages, racial and ethnic groups, and among men and women, according to HHS. The report is based on previously reported Gallup survey data and a comparison to health insurance exchange enrollment numbers compiled by HHS.

It doesn’t offer a hard count of how many of the Obamacare insured — that is, the more than 8 million people who enrolled in private health insurance via the exchanges, or of the millions more who signed up for Medicaid or the Children’s Health Insurance Program or bought coverage directly from an insurer — were uninsured before. The New England Journal of Medicine article is nonetheless the closest to an official federal account to date of the Affordable Care Act’s impact on the uninsured.

Previous surveys by Gallup, the Henry J. Kaiser Family Foundation, the Commonwealth Fund and others also have found significant reductions in the numbers of uninsured.

According to HHS, the drop in the uninsured was more pronounced in the 25 states and the District of Columbia that adopted Obamacare’s expansion of the Medicaid program before this year, and wasn’t statistically significant in the 25 states that didn’t. In the Medicaid-expanding states, the uninsured rate for people newly eligible fell 6 percentage points, compared to 3.1 percentage points in non-expanding states.

Uninsured Rate Among Adults 18-64 From January 2012 to June 2014

Source: New England Journal of Medicine

Scott Walker Received Money From Companies That Outsource Jobs, Despite Criticizing Rival

Wisconsin Gov. Scott Walker (R) has received $68,500 in campaign donations from corporations that outsource jobs, according to a report from Eau Claire, Wisconsin-based WQOW, which referenced data from Walker’s latest campaign finance report.

The outsourcing corporations that contributed to Walker include, but are not limited to: WellPoint, Caterpillar, Deloitte, General Motors and Pfizer.

The news of these donations come as Walker has criticized his Democratic opponent Mary Burke over the fact that her family business, Trek Bicycle, makes some of its bike products in China, Germany and the Netherlands. noted that Walker helped create the Wisconsin Economic Development Corporation — which included Trek in a marketing campaign. Walker is also lagging behind in his promise to reach his goal of creating 250,000 private-sector jobs in Wisconsin during his first term.

HuffPost Pollster has Walker leading Burke ahead of the November general election:

Law Firms Took Money From Struggling Homeowners To Pay For Cars, Stuff: Feds

For more than two years, the Hoffman Law Group of Palm Beach, Florida, told clients it was converting their legal fees into justice. The firm was suing banks over abusive practices, it claimed, actions that would force the banks to lower mortgage payments and even pay cash damages to aggrieved borrowers.

But the cases fizzled and clients grew angry. On Wednesday, federal law enforcement officials unsealed a civil complaint that appears to validate the worst fears of those who trusted the firm with thousands of dollars: that instead of funding viable legal challenges, the firm’s managing partner and his two non-lawyer business associates allegedly used the fees to pay for car leases and meals, and directed thousands of dollars to personal American Express credit card accounts.

“Defendants do little or nothing to actually assist consumers,” the Florida attorney general and the Consumer Financial Protection Bureau allege in the legal action, brought in West Palm Beach federal court. “Instead, they usually exacerbate consumers’ problems — sometimes pushing them into foreclosure or bankruptcy — while pocketing astonishing profits.”

The Hoffman complaint was made public as part of “Operation Mis-Modification” — a crackdown by the CFPB and Federal Trade Commission on mortgage modification scams. Such schemes typically collect large upfront fees in exchange for assistance that seldom comes. The attorneys general of 15 states, including Florida, also brought cases against 32 other alleged mortgage modification scammers on Wednesday, in addition to the three brought by the CFPB and six filed by the FTC.

“We are trying to send a strong message to the industry that we are watching, and that this behavior won’t be tolerated,” said Ori Lev, the deputy enforcement director at the CFPB, in a call with reporters.

It wasn’t immediately clear how many of the operations targeted by regulators are going concerns. The Mortgage Law Group and the Consumer First Legal Group, accused by the CFPB of scamming $19.2 million from homeowners, were previously sued by Indiana and Arizona law enforcement officials, respectively.

Lawyers are increasingly involved in mortgage modification schemes, usually as frontmen for boiler room-type operations, a previous Huffington Post examination found. The HuffPost report focused closely on the Hoffman firm, which former employees said had scammed thousands of clients.

The firm’s pitch was crafted to capitalize on mistrust and anger felt by untold thousands of homeowners who had sought a mortgage modification under one of the government-backed programs, only to see paperwork lost and claims denied. Most clients of the firm paid an upfront fee of $6,000, plus an additional $500 a month to retain the firm’s services. According to the complaint by the CFPB and state attorney general, one client claimed he was told that his case would take six to nine months, and that when the firm prevailed, he would own his house and have no mortgage.

HuffPost found that most of the cases filed by the Hoffman firm purportedly on behalf of clients lacked the most basic elements of a valid legal filing — and that almost all had been tossed out of court by irate judges or withdrawn by the firm itself. State and federal law enforcement officials contend that the Hoffman firm continued to collect fees even after most filings had been dismissed or withdrawn.

“Many, if not all, of these lawsuits are flagrant abuses of the federal court system adding up to a massive misuse of court resources,” the complaint alleges.

Federal law bans mortgage foreclosure rescue and other loan modification services from collecting fees until homeowners have a written offer from their bank that they find acceptable.

Two days after legal documents were filed in the Hoffman case on July 14, law enforcement officials raided the firm, freezing the firm’s assets as well as those of its managing partner, Marc Hoffman, and the two non-lawyer managers of the firm, Michael Harper and Benn Wilcox.

According to legal filings, Harper had already signed an agreement with the Florida attorney general’s office promising not to participate with attorneys in mortgage rescue businesses, after the state investigated an earlier operation.

Hoffman, Harper and Wilcox have not responded to repeated requests for comment.

All told, the Hoffman firm reaped more than $5 million in fees from thousands of clients, according to the lawsuit. The firm has been placed in receivership by the court, with an outside attorney, Mark Bernet of Tampa, overseeing its assets. Receivership usually precedes liquidation. Bernet will likely be tasked with figuring out how much money is left, and how best to return it to clients.

Also on Wednesday, regulators released a consumer advisory guide to assist homeowners who are seeking mortgage modification assistance.