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Home > Speeches and Presentations > Speeches and Presentations 2007 > Don't Forget the Regulator

Don't Forget the Regulator

Presented by
Roland George
Board Member
National Energy Board

Symposium entitled The Role of Nuclear Energy in Energy Systems:
Getting from now to 2050
University of Calgary/Idaho National Laboratory

17 October 2007

Introduction

Good afternoon.

First, I'd like to thank the symposium organizers for their kind invitation. It's not often that I get to talk to a group of nuclear researchers and research managers. In fact, I've never done it. So I had to ask Michal, that's Michal Moore of the University of Calgary's ISEEE, "are you sure that you want to ask a federal energy regulator, especially one that doesn't have direct responsibilities over the nuclear sector, to talk at this type of gathering?" Basically, he asked me to give you a different perspective; a perspective that by the very nature of my job has to be much broader than simply looking at the economics and technology of a project.

Thinking about what I wanted to talk about today, I decided to title my speech "Don't Forget the Regulator", not because it's dramatic or punchy (I don't think that regulators are supposed to be like that) but because it pretty much reflects the theme of this talk.

The National Energy Board

Before continuing, let me answer the question "What is the National Energy Board?"

Maybe I can define the NEB by summarizing our purpose or raison d'être, that is,

We promote safety and security, environmental protection and efficient infrastructure and markets in the Canadian public interest within the mandate set by Parliament in the regulation of pipelines, energy development and trade.

I could go on and on with examples of what that means but since I'm really trying to give you a bit of insight into the mind of a regulator, let me share with you a vision statement that our Board has developed recently:

The NEB is an active, effective and knowledgeable partner in the responsible development of Canada's energy sector for the benefit of Canadians.

In my view the key to this statement is the phrase responsible development. These words are meant to capture our belief that the development of infrastructure by private interests within a competitive market framework serves the public interest, but the regulator must have regard to the potential social and environmental impacts not fully dealt with by markets.

On a more personal note as to the meaning of responsible development let me put it this way. I currently have a daughter in university. When she graduates, I'd like her to have a meaningful and interesting job. That's the "development" part. But I certainly don't want her to be sick because our society, our generation, didn't do the right thing in terms of health, safety and the environment. That's the "sustainable" part.

We see ourselves as a partner with other stakeholders and we work together to ensure that concerns are identified and understood and that the correct balance is achieved among economic, social and environmental factors.

In terms of our culture, we believe we should be active, effective and knowledgeable. That means, for example, that we anticipate and prepare for issues that come before the Board, we are results oriented, and we are capable of dealing with the highly complex multi-disciplinary matters surrounding energy regulation.

By taking these actions in partnership with our stakeholders we are able to use the very best minds and information to help us efficiently solve problems, foster innovation and make wise decisions. Finally, we do our job for the benefit of all Canadians.

Unfortunately, in reality, we can never be quite there. As with everybody else on the planet, perfection is quite ellusive. We have many initiatives to try and get us there. Improvement is a perpetual battle. When we get close, we find that the world has changed so we have to change with it; but, as a vision, it is our guiding light and our culture has been changing to embrace it.

Who Does What

To achieve that vision of excellence in energy regulation, I believe that we all have jobs to do. In what follows, I'll be picking what I currently see as the top jobs:

For the regulator (...from the NEB's perspective):

  • We must establish clear, efficient and effective processes and publish standards of performance (in other words do the right thing and do it right)
  • We have to ensure that all stakeholders have a voice; this is extremely important since the public interest is inclusive of all Canadians and refers to a balance of often competing claims
  • We must inform energy policy by sharing the knowledge and expertise we have

For the government

  • Ensure that regulators have adequate capacity (in other words, qualified appointees and adequate resources - on that last note, our HR department asked me to do a plug for our recruitment drive since I'm at the university today - so we current have 70 staffing initiatives - if your interested in more information, just get in touch)
  • Government must address multi-jurisdictional overlap and incompatible processes
  • And create a policy framework that supports efficient market-based development of energy infrastructure

For industry

  • Please, please, please, consult with stakeholders so that you understand their interests and their concerns with development (if you don't, you have a much greater chance of having a rough ride)
  • Educate the public, governments and regulators (bottom line for any organization, or for any project whatsover, is a fight for, let's call it "legitimicy")
  • And again, please, please, please file a complete application (regulators can only decide on the information in front of them and it's the applicant's responsibility to make it's case)

Sidebar on Successful Project Developers

Let me take off my regulator's hat on for a moment and put on the hat I used to have before becoming a regulator, namely, a senior principal in an international energy consulting firm leading a North American practice.

All my colleagues were engineers. I was the only non-engineer. I provided all the diversity for that Houston-based  organization: a French Canadian straight out of a University of Calgary research institute with a weird background of mathematics, economics, and an MBA.

So why would an engineering firm specializing in the commercial and technological interface of project development want with somebody like me?

That's easy. Given their world wide experience with project development, they knew that if their clients strictly focussed on project economics and "cool" technologies, their projects were in trouble.

Basically, successful project developers know they have to fight to gain "legitimicy". That means they have to seriously consider other factors than strictly economics and technology. They also had to deal with political, social, environment and regulatory considerations. So even if the project leaders were hard-nosed project engineer or science types, they knew they had to deal with a lot of "unquantifiables". My colleagues used to call it the soft stuff. That's where I came in.

Hopefully these brief comments give you some idea of what regulators are looking for and why there are successful project developers and why some are less so.

Other Considerations

At this point I'd like to change gears a bit. First I'd like to share a few relevant results out of our Energy Futures work that will officially come out on November 15th and can be downloaded from our website. Then I'd like to mention a few words on what I see as a trend in the increasing intensity and complexity of regulatory hearings.

I'm not revealing any big secrets when I say that energy has and always will be extremely important to Canadians. Energy is essential to our comfort and our economic prosperity.

At the same time, there is growing awareness of the consequences of energy use to our physical environment, the air quality in our cities, our health and the potential impact on the climate of our planet. Finding ways to produce and use energy that minimize the impacts on our environment is one of the key challenges Canadians face in the 21st century.

The NEB's Canada Energy Future report highlights the issues Canadians face with respect to energy, as well as brings to light future implications for Canadian energy producers and consumers. The report examines different possible energy futures that may unfold for Canadians up to the year 2030. Here are a few results.

Energy demand will remain primarily a function of population and economic growth. With these two factors on the rise, energy demand is growing. The way Canadians use energy will change, but slowly.

There will be a continued demand for natural gas including the need for gas in oil sands processing and electricity generation. But there is also a move towards gas alternatives including substitution to other forms of energy and improved efficiency.

What we see when it comes to nuclear is that all existing units have one life extension. This brings us to a 2030 timeframe except maybe for two Pickering units that come off a few years before that.

In terms of new nuclear units, we have the addition of four new ones in Ontario given their off-coal policy and replacement of some older units. We also have an additional unit in New Brunswick later in the forecast period.

As for steam raising and electricity generation in Alberta's oil sands projects, we don't include it in our scenarios but we do indicate that it's a possibility (I'm sure that you'll have some questions on that one afterwards).

Now let's change gears again and talk about the increasing intensity and complexity of regulatory hearings.

Given a trend toward more informed stakeholders, given some concerns with development and the pace of development in general, given more vocal and active groups of landowners, First Nations and Aboriginal Peoples, local communities, NGOs and many others, given an increased number of legislated processes in general, given the rules of natural justice and our legislated mandates, this means that the regulatory and environmental processes are likely to be quite involved and certainly will not go away as an important consideration for project developers.

You have to remember that many of the regulators with direct responsibilities for the nuclear industry are quasi-judicial bodies just like the National Energy Board. For example, the Federal Nuclear Safety Commission issues your licenses to build and operate nuclear facilities. They are under some similar drivers such as respecting their legislation, the rules of natural justice and court decisions as well as an increasingly complex and changing context.

Conclusions

In conclusion, I'd like to leave you with four thoughts.

As you can see from my remarks, the world is changing and sometimes at an accelerating pace.

The regulators, by necessity, are trying to adjust to these rapid changes while at the same time respect their legislated mandate to make decisions in the public interest as well as respect the rules of natural justice.

Everybody has a job to do in order to achieve efficient and effective environmental and regulatory processes.

There certainly is a continuing role for nuclear energy in Canada, but if you want to play that role or even increase it, you'll have to listen, consult, educate, and seriously deal with all those "unquantifiables" instead of strictly focusing on "cool" technologies and project economics.

Thank you.

Any questions?

 

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Date Modified:
2011-10-28