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Home > Speeches and Presentations > Speeches and Presentations 2009 > Regulating Canada's Energy Infrastructure:  the Next 50 years

Regulating Canada's Energy Infrastructure:  the Next 50 years

Presented by
Gaétan Caron
Chair and Chief Executive Officer
National Energy Board

LDC Forums Canada
in association with IGUA

13 November 2009

Good morning everyone. I am pleased to be here today in beautiful Montreal.

Many of you are aware that the NEB is celebrating its 50^th anniversary this year.

Today I look forward to this opportunity to share with you my vision for the future of Canadian Energy regulation from the National Energy Board.

Getting Better All The Time

I have shared with you our message of "getting better all the time" for a few years, now it  is time to spell out how the NEB will ensure continual improvement.  We have four key themes for our future action plan that I want to discuss today:

• Focus on sustainability
• Lead by dealing with tough issues
• Address the big picture
• Continue to keep our eye on the ball

Focusing on Sustainability

In 1987, almost thirty years after the NEB Act was passed, the Bruntland Commission, summoned by the United Nations, issued a report on sustainable development saying we (nations of the world) need to focus on sustainability. The words in that report are well known: "Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs." The Bruntland report also urged those making decisions on proposals to integrate, in one gesture, the relevant economic, social and environmental considerations.

Canadian legislators in 1959 were indeed visionary when they created the National Energy Board Act: s. 44. of the original Act (now s. 52) read specifically that the Board "must be satisfied that the (pipe)line is and will be required by the present and future public convenience and necessity." Parliament asked the Board to consider all relevant issues, in one gesture, when deciding whether or not to approve infrastructure, and if so, under what terms and conditions. This is very close to what the Bruntland Commission promoted 28 years later. In the language of 1959, Parliament allowed the Board to look at any public interest that may be affected by the granting or refusing of the application. In conformity with that, since the beginning, the NEB has made its decisions in the public interest, typically considering other important factors like markets, economic feasibility, social impacts, safety and environmental protection and what the impact of the infrastructure would be on future generations.

The public interest is always changing. The Board recognizes this on the front page of its Strategic Plan: "The public interest is inclusive of all Canadians and refers to a balance of economic, environmental and social interests that change as society's values and preferences evolve over time."

Focusing on Sustainability

As we prepare for the next 50 years, when we take decisions on energy infrastructure, we will continue to ask ourselves: "To what extent would a given course of action contribute to the public interest, in the present and in the future?" Moreover, thanks to the mandate Parliament gave us 50 years ago, we will consider whether projects are in the public interest throughout the entire life cycle of facilities, since we regulate:

• the pre-filing stage: for instance, the Board expects public engagement and consultation to have taken place before an application may be filed;
• the assessment process: that may include public hearings;
• if a project is approved: its construction, its operation, and its abandonment.

As you can see, our focus on sustainability is not a change of direction. It is a continuation of the Board's regard for the public interest as well as a recognition that Canadians' values evolve over time. We are evolving with Canadians, within the clear mandate Parliament gave us 50 years ago. We will keep listening to Canadians as we contribute to the pursuit of a sustainable energy future on their behalf.

Dealing With Tough Issues - Land Matters

An example of dealing with tough issues is our Land Matters Consultation Initiative (LMCI). It resulted in a Final Report that was published in May 2009. We are taking concrete actions in land matters. In order to improve stakeholder engagement, we are clarifying our expectations for public engagement. In addressing the physical issues of pipeline retirement and reclamation we issued final principles for the end-state of land post-retirement. Next steps for this initiative include the formation of a multi-stakeholder advisory committee, in January 2010, to address gaps in knowledge related to the physical aspects of pipeline retirement and reclamation. The committee will provide a report on the outcomes if its activities to the Board in March 2011.

Financial issues of pipeline abandonment was the subject of a hearing (RH-2-2008) and a technical conference that will occur this month: November 17. We have committed to releasing more specific expectations on the financial aspects of abandonment in February 2010.

Dealing With Tough Issues - ENGO Engagement

Another example is the meaningful engagement of Environmental Non-Governmental Organizations (ENGOs). We believe we can do better meeting their desire to contribute meaningfully to energy debates in Canada. We have worked with the Pembina Institute to reach out to Canada‘s ENGOs. We have met with the leaders of many of them and have made a number of commitments to them. We will:

• enhance the flow of information between the Board and ENGOs;
• improve our assistance to parties, notably ENGOs and landowners, so they understand the NEB process and its many flexibilities and can effectively convey their perspectives on energy matters we regulate;
• consult ENGOs more deliberately in our Energy Information Program.

This project is only beginning. I am very proud of the momentum we have gained, and I look forward to concrete results in the near future.

Dealing With Tough Issues - Working With Arctic Communities

Possibilities exist in Nunavut for future oil and gas development. The NEB is establishing relationships with key decision-makers in Nunavut in preparation for future oil and gas proposals. Our initial focus is to listen, and to seek to understand the perspective of Northerners, who have been taking care of the land for hundreds, if not thousands, of years. This builds on similar work we have done in the Northwest Territories for 20 years and more.

There are many organizations responsible for some aspect of oil and gas development in the Canadian North. The NEB believes that it is through the earning of mutual trust that continual improvement can occur in the regulatory process in the North. The NEB is investing heavily in earning the trust of Northerners. Through partnership with Northern institutions, we also believe that we will improve environmental, social and economic outcomes, when we review proposals in a cooperative way. The North being a fragile environment, we all need to find and use the best knowledge available, including traditional knowledge. Cooperation and collaboration promotes the sharing of this precious knowledge.

When we feel ready together, we take concrete action, sometimes in the form of a Memorandum of Understanding (MOU). For example, we have signed an MOU with the Northwest Territories Water Board on cooperation with respect to down-hole injection. In the Yukon, we are providing consulting services to them so they can exercise their oil and gas authority under devolution, without having to hire technical specialists. There are many other examples.

Dealing With Tough Issues - North American Regulatory Collaboration and Coordination

These Northern examples illustrate a growing trend in energy regulation: collaboration and coordination among regulatory and government agencies. One great example of this collaboration is the work of Canada's Major Projects Management Office (MPMO) that was set up in 2007 to improve coordination within Canada's regulatory system. Its goal is to provide industry with a single, efficient point of entry into federal processes while ensuring that projects, which are approved, are built in a safe manner and the environment is protected.

The federal government has recently created the Northern Project Management Office (NPMO). The NEB will strongly support the work of the NPMO, and we look forward to contributing, in whatever way they choose, to their success.

An example of our cooperation with provincial governments is our MOU with the British Columbia Environmental Assessment Office (B.C. EAO) to promote a coordinated approach to achieve environmental assessment process efficiencies for pipelines or electric transmission lines which extend beyond B.C.'s boundaries, and which are subject to NEB jurisdiction. The B.C. EAO accepts that any NEB/CEAA review of a project in British Columbia that triggers the Reviewable Projects Regulation will constitute an equivalent assessment under sections 27 and 28 of the BCEAA.

In addition to working with the MPMO, the NEB pursues an ongoing dialogue among other provincial, state and international agencies through associations like Canadian Association of Members of Public Utility Tribunals (CAMPUT) and the U.S.' National Association of Regulatory Utility Commissioners (NARUC). Another example is the tri-lateral collaboration which takes place between the U.S. Federal Energy Regulatory Commission (FERC), the Mexico Comisión Reguladora de Energía (CRE) and the NEB. Three times a year, our executive staff meet to compare notes on what is going on in energy and in regulation, so we all see what's coming in terms of applications, supply and markets. We remain independent and sovereign for sure, but with a common base of knowledge on what is going on and what is coming, we are well prepared when things do happen, so that our regulatory processes are mutually informed, leading to comparable timeframes for regulatory action where possible. We also learn from each other on leading regulatory philosophies and share best practices.

Addressing The Big Picture

Addressing the big picture is not a new focus for the NEB. In 1959, Mr. Diefenbaker's government thought that Canada needed an impartial and independent view on energy, and it proposed to Parliament a requirement that "The Board shall study and keep under review (energy) matters over which Parliament has jurisdiction". 50 years after, under an NEB Act which is essentially the same, we publish a variety of Energy Information Products to help us and Canadians understand the energy system.

The NEB has a broad mandate that includes environment, safety, security, conservation, economics, tolls and tariffs, and public engagement, throughout the life-cycle of the infrastructure we regulate. By dealing with all these matters, our team of 360 people wants Canadians to benefit from all of the knowledge we acquire dealing with the many dimensions of our regulatory mandate. This is achieved through our Energy Information Program.

Some recent work includes the Energy Futures Reference Case Update, released in July 2009.

Our Energy Futures Conference is coming up in Ottawa on January 28 and 29 to look at energy supply, demand, climate change, and infrastructure. I hope you will participate in those discussions.

Addressing The Big Picture

We released in October 2009 an Energy Market Assessment (EMA) on energy infrastructure. This EMA discusses new infrastructure connections that could be required to handle the changes that may occur in energy supply and demand, as outlined in the EF Reference Case Update. We did this study to inform Canadians about potential infrastructure changes and as a planning exercise for ourselves to know what our future work could be. Despite the challenges inherent in building large energy infrastructure projects, the Board believes that Canada is well poised to meet the energy demands of Canadians in 2020 with safe, secure and reliable energy infrastructure.

Understanding energy demands and the underlying behaviours is a key component for envisioning our energy future. To address that topic, we will also be publishing shortly, a new Energy Briefing Note on Energy Behaviour and Attitudes.

Keeping Our Eye On The Ball

Meanwhile the NEB will continue with its day-to-day work to promote pipeline and power line integrity through our outstanding oversight services.

As you may be aware, TransCanada recently experienced two mainline pipeline ruptures in Northern Ontario within 14 days of each other. Both incidents are under investigation by the Transportation Safety Board (TSB), which is the lead agency looking into the causes and contributing factors. We are collaborating with them in their independent investigation. The causes and contributing factors of these two incidents have been not fully determined; however, we know enough about the incidents to say they are unrelated - we believe the timing was coincidental.

These incidents remind us that one of the Board's primary roles is to promote safety and the protection of the environment.

Keeping Our Eye On The Ball

Here is another example of the need for the NEB to keep its eye on the ball: regulation of the Alberta System (NOVA facilities).

The transition from provincial to federal jurisdiction was both historic in importance and relatively uneventful in terms of degree of public profile of our proceedings. The consequences are clear, however. Effective 26 February 2009, the NEB became responsible for an additional 23 500 km of natural gas pipelines, in addition to the 45 000 km we already regulated. In one fell swoop, we acquired significant new responsibilities.

Thanks to the outstanding relationship that exists between the Energy Resources Conservation Board, the Alberta Utilities Commission, and ourselves the transition was totally seamless.

Thank You!

I trust this gave you a flavour of where the NEB is going, as it embarks upon its second half-century. Thank you for allowing me to express my vision of the future for energy regulation from the NEB and I look forward to continuing this dialogue with you. I'll be pleased to answer your questions.

 

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Date Modified:

2011-10-28