Common menu bar
Breadcrumb
Home > Speeches and Presentations > Speeches and Presentations 2005 > Collaborating for Regulatory ImprovementCollaborating for Regulatory Improvement
Please note that certain documents in this section are available in PDF format. To inquire about receiving these documents in another format, please contact us. If you do not have PDF viewing software, you can download a free PDF viewer from the Adobe® Web site.
Introductory Remarks to
NEB Workshop 2005
Monday, 6 June 2005
Calgary, Alberta
Gaétan Caron
Vice-Chairman, National Energy Board
Introduction
Good morning. Welcome to the NEB Workshop. I am so pleased that each of you has taken the time to attend. With over 400 participants from places such as Calgary, Vancouver, Halifax, Montreal and the North, we are going to have some great discussions during the next three days. We are here to share information with you about many NEB initiatives and to hear your opinions and suggestions regarding these initiatives. And that's what this Workshop is all about - collaborating for regulatory improvement.
This collaborative approach is certainly an evolution for the NEB. I have worked with the NEB in a number of different capacities for more than 25 years. In the last 10 years, however, we have become very explicit in consistently seeking feedback and input to help focus our work, so that we may better serve all of our stakeholders.
During the next three days, you will participate in discussions ranging from the recently implemented Filing Manual to emergency exercises. There is a considerable amount of knowledge in this room and we intend to leverage this knowledge to initiate, develop and refine regulatory processes and programs. By working together we will continue to provide favorable conditions for the physical regulation of Canada's pipeline infrastructure.
My main objective this morning is to share with you the NEB's priorities that are shaping our approach to safety, environmental and economic regulation. By focusing on our priorities, the NEB is enhancing its capability to work effectively and deliver on key results.
After discussing our priorities, I will also touch on some specific work that is going on with respect to emergency management, pipeline integrity and environmental protection.
This will give you a general basis that I think will be of assistance to you as you later participate in the more specific sessions of the next three days.
NEB's Goals
These priorities are about the means we will take to achieve the Board's five goals. I am sure you can associate with these goals and, in that sense, as stakeholders, they are yours as much as they are ours. I am providing them here on this slide so we keep them in mind throughout the workshop.
- Goal 1 - NEB regulated facilities and activities are safe and secure, and are perceived to be so
- Goal 2 - NEB-regulated facilities are built and operated in a manner that protects the environment and respects the rights of those affected
- Goal 3 - Canadians derive the benefits of economic efficiency
- Goal 4 - The NEB fulfills its mandate with the benefit of effective public engagement
- Goal 5 - The NEB fulfils its mandate with the benefit of effective leadership and quality management of affected processes
NEB's Regulatory Priorities
Through our yearly strategic planning exercises, the NEB has established six priorities. To establish these priorities we consider evolving social and economic trends, risks; challenges that might influence how responsibilities are carried out; and how to deliver results to Canadians.
The priorities are:
- Goal-oriented regulation
- Energy market information
- Public participation
- Awareness and understanding of the NEB Mandate
- Cooperation and partnerships, and
- Enhanced performance
I'm going to tell you about each of these priorities in more detail.
Goal-oriented Regulation
Goal-oriented regulation is a key priority. The NEB has used this approach to align itself with the federal Smart Regulation initiative. In the next session right after me, before the break, Jim Fox, our Team Leader of Regulatory Development, will speak about Smart Regulation and how this federal initiative strives to "contribute to innovation and economic growth and to reduce the administrative burden on business".
The slide in front of you (Figure 1) displays what we mean by the term "Goal-oriented regulation". The term goal-oriented is used to describe a style of regulation in which a mix of goal-based, performance-based and prescriptive components are used.
Figure 1: Goal-oriented Regulation
Regulations that are goal-oriented identify and focus on desired outcomes. They promote the use of management systems to achieve goals and effectively manage risks, while providing the flexibility for regulated companies to adapt to changing conditions. Management systems also allow companies to use new technologies as they are developed and use the most effective solutions for the particular circumstance.
It is also important to note that within the goal-oriented approach non-legislative requirements exist. These include industry standards and codes of practice as well as documents such as our Guidance Notes that provide a documented representation of acceptable methods.
For more than ten years the NEB has been moving towards goal-oriented regulation. A recent survey told us that regulated companies favor the goal-oriented approach and support the development of more regulations in this format.
Currently the NEB has two goal-oriented regulations which have become law, the Onshore Pipeline Regulations, 1999 and the Processing Plant Regulations. Two other regulations, the NEB Damage Prevention Regulations and the Canada Oil and Gas Diving Regulations, have been drafted and are in the final stages of review by the Department of Justice. We are also working on several other goal-oriented regulation projects. The Canada Oil and Gas Drilling and Production Regulations and the Production and Conservation Regulations are being combined and adapted to the goal-oriented format.
At this workshop, our facilitators will seek your input on a new regulation, the NEB Submerged Pipeline Regulations and on the updated version of the Onshore Pipeline Regulations, 1999. The concept of the "Health, Safety and Environment Case" approach that are being proposed for the Submerged Pipeline Regulations will be introduced. Known in an earlier version as the Safety Case, this regulatory model originates from the U.K. and is based on more of a risk-based approach. Participants will have an opportunity to provide feedback on this model, which is new to the NEB.
The NEB will measure its performance towards this key priority by measuring and communicating the percentage of regulations within the NEB's jurisdiction that have been developed, implemented and maintained in a goal-oriented format.
Energy Market Information
The second priority is energy market information. This priority is key in continuing to deliver independent information and analysis on energy markets to Canadians.
In 2003 and 2004, the NEB asked for comments from numerous stakeholders on the effectiveness and content of its energy market monitoring program. Feedback indicated that the NEB has an important role and is in a unique position to provide objective and impartial information to federal and provincial policy makers.
The Board will measure its performance in providing energy market information through feedback received on its energy market analysis's as well as evaluating if policy makers are advised of key regulatory and energy issues that need to be addressed.
At this workshop, we do not have a specific session on energy market information, or on economic regulation more generally. However, we are interested in your input in this area and we will seek it in other ways.
Public Participation
The next priority is public participation. There has been a recent trend towards increased public participation in government decision making. The NEB is continuing to build its capacity in the area of public participation. Understanding how the public can and wants to be involved with NEB processes helps us to offer effective public engagement options.
Identifying public participation as a key priority will provide an opportunity to focus on identifying new tools in selected areas as well as refining and updating existing tools.
One example is the increased number of opportunities for the public to participate and contribute to the regulatory decision making process. During the past few years the Board has increased the number of information meetings and hearings held in affected communities. The NEB has also moved towards holding community consultation sessions to provide information and seek input on many of its new processes.
More recently, the Board has had considerable success with the Appropriate Dispute Resolution process, commonly known as ADR. ADR includes different strategies outside of hearings and court proceedings that people can use to resolve their differences. ADR offers less formal and more cooperative options than the hearing process. These options include negotiations, mediations and workshops. During the ADR session on Wednesday, the facilitators will provide more detail around the ADR process as well as explore methods to evaluate the success of ADR.
The NEB has not only increased and improved the means by which it communicates and engages the public on a face-to-face basis, but it is also reaches out to its stakeholders electronically. With approximately 400,000 hits to our Web site each year, the NEB recognizes its Internet site has become the preferred point of contact for many stakeholders. Our current NEB Web site requires revitalization to ensure that it is accessible to all Canadians. To ensure the Board is meeting the needs of its stakeholders, a session will be held later this morning to offer you a glimpse of the new NEB Web site. The facilitators look forward to hearing your views on this prototype.
The NEB will measure its performance towards contributing towards this priority by measuring the increase in dialogue with our various stakeholders and by soliciting feedback on both new and old processes.
Awareness and Understanding of NEB Mandate
As we have interacted with out stakeholders during the last few years, we have realized the scope and breadth of the NEB's regulatory role is unclear to many people. In particular, we have heard that our responsibilities on pipelines and facilities from construction through operation to decommissioning and abandonment (I'll call this complete life-cycle) could be better understood. We need to communicate our role more clearly to our northern partners as well, and also when dealing with the routine applications and operations aspects of our business with the smaller Group 2 companies.
By identifying the NEB mandate as a priority, the Board will consciously deliver specific activities to improve stakeholder awareness of the NEB and increase the understanding of its mandate.
We already publish an annual report, a Report on Plans and Priorities, and an annual Performance Report. But there is an opportunity to broaden the reporting capacity and leverage communication efforts to increase stakeholder understanding of the NEB's role.
Part of the NEB's mandate is regulating safety. In April 2003, the NEB published its first in a series of reports on the safety of the companies we regulate. Focus on Safety - A Comparative Analysis of Pipeline Safety Performance was aimed at providing a clear understanding of the safety performance of the NEB-regulated oil and gas pipeline industry. The second report, published in March of 2005, is entitled Focus on Safety and Environment - A Comparative Analysis of Pipeline Performance and provided data on the safety, integrity and environmental performance of our regulated companies. Copies of this latest edition of the Focus on Safety and Environment are available and the results of this report will be reviewed and discussed during a session on Wednesday.
Incident reporting is also within the mandate of the NEB and companies regulated by the NEB are required to report certain events as prescribed under a number of regulations, Board Orders, Certificates and Board letters. To address some confusion around reporting requirements, we are developing a guidance document to clarify the requirements. This guidance document will be introduced at the workshop with considerable opportunity for discussion and input.
The NEB will measure its performance towards building a better understanding of its federal role by evaluating awareness of the NEB and its role and by improving the reporting of safety, security and environmental knowledge.
Cooperation and Partnerships
The NEB continues to work with a number of regulatory agencies to ensure that environmental assessment and regulatory issues are dealt with in a coordinated and timely manner. The NEB has identified cooperation and partnerships as a priority as it provides opportunities to improve processes and use resources more effectively for all parties involved.
One such partnership is resulting in the development of a memorandum of understanding between the National Energy Board and the Office of Pipeline Safety, or commonly known as OPS. The OPS regulates safety, reliability and environmental soundness for U.S. natural gas and hazardous liquid pipeline facilities while the NEB regulates aspects of the energy industry in Canada including the construction and operation of inter-provincial and international pipelines. The pipeline infrastructure in Canada and the US is interconnected. Therefore, we recognize that cooperation and partnerships between the two agencies could contribute to the development and implementation of a more efficient regulatory program.
The terms of agreement of the MOU have been drafted. They support the exchange of information between the two agencies and outline that initiatives may take the form of staff exchanges, emergency management planning sessions or exercises or other joint training initiatives intended to increase skills and knowledge. The agreement also extends the opportunity to observe when either party undertakes a compliance audit on a pipeline that crosses the border. And finally, the MOU indicates that if an enforcement action is taken on a pipeline that crosses the border, the regulator commencing the action shall notify the other. This MOU will serve to better protect the pipeline infrastructure of both countries and better utilize our limited resource base.
We will measure our success in this priority by the number of process improvements and partnerships built through inter-agency cooperation such as this one.
Enhanced Performance
The last priority targets enhanced performance. You may have noticed that each of the proceeding priorities have performance indicators to measure our success in achieving the objective. We aim to have a performance based culture of excellence. This culture will be based on the expectation of enhanced results both internally in how the NEB operates its business as well as externally for its stakeholders.
Internally, the Board has begun implementing an ISO-based quality management system which will help guide improvements in our organization. We are currently defining inputs, ensuring our work processes are documented, and measuring outputs against our stakeholders needs. In learning about management systems and the efficiencies that can be gained from well coordinated processes and effective resource utilization, the NEB has chosen to reorganize and create a new business unit. The new business unit, called Policy, Planning and Coordination, will manage the "plan", "measure" and "improve" activities within the NEB management system cycle. The "Do" type activities, such as facility applications, and NEB inspections and audits, will continue to be managed within the Applications and Operations business units.
One of the first improvement initiatives based on the principles of a quality management system is the development of an integrated compliance program. This initiative will integrate knowledge gained from application, inspection and audit processes to better determine a compliance plan and allocate appropriate resources for further inspections or audits. The details of our quality management system and its integrated compliance program will be discussed at sessions being held this afternoon.
Enhanced performance will first be measured through a full implementation of the quality management system. An external auditor will visit the NEB next March to evaluate the level of implementation and identify gaps.
This concludes my discussion on the NEB priorities yet; I would like to take a few moments to mention some specific work that has been going on with respect to emergency management, pipeline integrity and environmental protection.
Emergency Management
At our last Workshop in December of 2003, participants told us that they would like the opportunity to explore different methodologies to identify potential hazards and put in place effective emergency management programs. On Tuesday, a full day of sessions will be held to focus on emergency management and explore the required components of an effective emergency management program including emergency exercises.
Since the last workshop the NEB Act has been amended to provide the Board with a clear statutory basis for regulating the security of energy infrastructure under its jurisdiction. The NEB has completed a number of Pipeline Security Assessments on NEB-regulated companies to provide a better understanding of how pipeline facilities are currently managing security and the security issues that are facing the regulated companies. These assessments will in time, assist the NEB in developing and implementing security focused regulatory tools.
The most recent Pipeline Public Awareness Workshop was held in Montreal, Quebec in September 2004. This regular workshop continues to serve as a means of increasing the awareness of pipelines and the precautions to be taken when undertaking any activity having the potential to damage a pipeline. This latest Awareness Workshop included first responders as well as other local stakeholders and emergency personnel.
Integrity Management
The NEB's oversight of integrity management currently consists of integrity audits, inspections and periodic meetings with regulated companies.
The meetings with regulated companies have been insightful and served as an effective method of sharing information. The results from audits and inspections have been interesting and have helped better define our challenge. An adequate integrity management program does not necessarily mean that adequate company field practices are in place. Twenty two percent of findings identified through NEB audits were related to integrity management.
Considerable time and effort has recently been dedicated to the development of integrity performance indicators. Integrity indicators will provide some indication of the effectiveness of the companies' integrity management programs as well as the effectiveness of the NEB's regulatory program.
Both of these topics will be discussed in detail later today. In the Integrity Performance Indicators session NEB, CEPA and Company panelists will discuss proposed indictors and their status.
Environmental Management
The Environmental sessions at the 2003 Workshop took a lifecycle approach towards the discussion of environmental issues and topics. From design and construction through to abandonment and decommissioning, the requirements for environmental protection were discussed and successful methods to minimize disturbance or mitigate effects were shared.
Since 2003, the NEB Filing Manual has been issued and implemented. The new manual has been used to guide and shape several applications through the approval process. At this workshop, a session will be held to receive feedback on the new NEB Filing Manual and it is hoped that users will openly share their experiences and opinions.
For several years the NEB has used the percent of environmental conditions that achieve their desired end result (or DER) as a key performance indicator for evaluating environmental protection. This performance indicator has successfully guided companies to define and focus on the desired result of environmental protection as opposed to simply completing an identified activity. With the continued attention on environmental protection and the increased attention towards improving environmental performance, there is an increased desire to identify and engage additional environmental performance indicators. The session on Tuesday afternoon will enable participants to share their experiences in the development of environmental performance indicators and successes they have had in improving environmental performance.
Conclusion
Over the course of this workshop, you will be asked to contribute to discussions and share your experiences. Please be open and direct. Comments provided today will contribute tremendously to the NEB achieving the priorities I have spoken about today, and ultimately to achieve our common goals.
We share a common goal, the continued safe, reliable and environmentally sound operation of Canada's pipeline infrastructure. With true collaboration between industry, regulatory authorities and other stakeholders, we will develop a better understanding of each others' interests, our priorities and responsibilities. Delivering on our priorities will ensure continuous improvement in the way we regulate and we will be well positioned to carry out our role in the development of Canada's energy industry.
When you return to your office, you will be asked to provide feedback on this event through on on-line survey. Please take a minute to give us your feedback. Your response will help us identify key topics and plan for future events.
On our side, after the workshop, we will produce a summary report in both languages by mid September. The summary report will be mailed to you as a registrant and it will also be made available on our Web site. Therefore, you'll be able to know what went on, even at those sessions you were enable to attend, because you cannot be at more than one place at a time! Further follow-up will occur of course in each of the subject matters being covered at the workshop. So the process of consultation and engagement will not end on Wednesday!
Thank you all for choosing to attend NEB Workshop 2005. Have a great three days!
Primary navigation (left column)
The NEB
- Who we are & our governance
- Public Participation
- News Releases
- Careers
- Hearings and Information Sessions
- Major Applications and Projects
- Regulatory Documents
- Cost Recovery
- North / Offshore
- Site Map
- Links