Proposed National Energy Board reforms will be a red-tape nightmare

Proposed National Energy Board reforms will be a red-tape nightmare


pipeline bloody canadian flag

A panel of experts charged with modernizing the National Energy Board has recommended sweeping changes to the way major pipelines are approved in Canada, including getting the federal cabinet to determine if a project is in the national interest before regulators follow up with a more technical review. At the same time, the panel wants to expand the role of indigenous communities, move some leadership jobs to Ottawa from Calgary and establish an independent energy information agency.

By recommending changes to so many aspects of Canada’s approval process and expanding the circle of people who have a say, the panel offers much to many.

But the recommendations are also a red-tape maker’s dream. The reforms are so vast and propose to fix so many unresolved issues they would make an already-onerous regulatory process even more daunting. Meanwhile, the upside is uncertain. Most likely, those who are opposed to pipelines will continue to oppose them, regardless of how they are approved.

On Monday, after months of public input, the five-member panel handed its 100-page report to Jim Carr, Canada’s minister of natural resources, suggesting ways to improve the structure, role and mandate of the Calgary-based NEB, with the goal of restoring “public trust,” and so that it performs as a regulator, not a policy-maker.

Its recommendations include replacing the NEB with a Canadian Energy Transmission Commission that would be governed by a board of directors based in Ottawa; requiring major projects to undergo a one-year review by the federal cabinet to ensure they are in the national interest before an additional two-year environmental and more technical review by the commission jointly with the Canadian Environmental Assessment Agency.

“Before going too far down the road of considering a new project, cabinet must decide if, at a high level, that project is in the national interest, (followed by a detailed project review covering the full range of issues),” the panel says. “At this stage, “yes” means yes, subject to further regulatory approval after a detailed project review,” and “no” means “NO.”

So “yes” would still be a maybe, since the second review would also have the authority to approve or deny major projects.

The two-step process means reviews would take three years instead of 15 months. In practice, reviews have taken a lot longer than 15 months, which raises questions about whether three years actually means a lot longer.

The panel recommends to “radically increase the scale and scope of its stakeholder engagement,” to improve the relationship with landowners, and to create a new, Ottawa-based Canadian Energy Information Agency.

It also recommends a much-expanded role for aboriginal people to ensure their treaty rights are taken into account.

“We see ourselves situated at the beginning of a new era in the industry and evolution of Canada, an era where Indigenous peoples will, at long last, assume their rightful place at the table of Confederation as leaders, knowledge keepers, and most importantly, as equals, bringing to bear distinct and valuable experiences and wisdom,” the panel says.

But that’s not all. The federal government would play a central role to coordinate a Canadian Energy Strategy, in partnership with aboriginal people, provinces and territories, so that “a proposed energy infrastructure project aligns with Canada’s big picture goals for economic, social and environmental progress.”

Given the slow progress made on such energy strategy over the past decade — conflicting and changing views by aboriginals on resource development, the evolving climate change policy debate, conflicting views between provinces about the future of energy — the proposed reform could take years.

With the Canadian energy sector facing “increasingly difficult competitive headwinds” from the United States, where President Donald Trump is cutting red tape, re-imagining the regulatory process at the same time could mean even greater challenges, said Trevor McLeod, director of the Natural Resources Centre at the Canada West Foundation.

We see ourselves situated at the beginning of a new era in the industry and evolution of Canada

Still, McLeod said the report does a good job in many areas, including pushing political decisions upfront to improve regulatory certainty, increasing public engagement, and creating an independent energy information agency, which many believe is long overdue.

It also comes up with better recommendations than a parallel report on reforms to the Canadian Environmental Assessment Agency, McLeod said. That report envisioned an expanded role for the agency on energy projects, which would threaten Canadian competitiveness even more, McLeod said.

For its part, the West Coast Environmental Law Association said the panel completely missed the mark on how projects such as oil pipelines should be assessed.

“The panel has effectively recommended replacing environmental assessments – our main tool for publicly and thoroughly evaluating the risks and benefits of proposals – with a politicized ‘national interest determination’ made without all the information about a project’s environmental implications,” staff counsel Anna Johnston said in a statement. “It is inconsistent with the recommendations by the expert panel appointed to review Canada’s environmental assessment process, and totally out of step with leading-edge thinking.”

Both panels envision a greater federal role in energy issues, which means a lesser role for provinces to determine the future of their economies. For Alberta and Calgary in particular, the heart of the oil and gas sector, the transfer of jobs and decision making to Ottawa means further loss in stature.

The irony is that all these reforms could be much ado about nothing, since both industry and the panel envision fewer major pipeline projects in the future. In that case, the panel recommends that the new commission apply its talents to facilitating interprovincial electricity transmission systems to take full advantage of new and emerging sources of renewable energy.




About prosperitysaskatchewan

Consultant on Saskatchewan's natural resources.

Posted on May 16, 2017, in economic impact, oil, political. Bookmark the permalink. Leave a comment.

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