Kinder Morgan’s Trans Mountain expansion project – which has its federal approvals – re-emerged as a hot political issue in the British Columbia election this month.The Canadian Press
The National Energy Board's identity crisis won't be fixed easily.
It's a problem that's snowballed over at least a decade, to the point where pipeline hearings have become noisy skirmishes and the board's decisions are routinely criticized for ignoring some environmental impacts, notably climate, or excluding voices.
A new report from a government-appointed panel looking into how to reverse eroding public confidence in the regulator contains a number of recommendations aimed at pulling it into modern times.
It's a laudable goal, but the agency, which weighs major energy infrastructure projects and makes sure they operate safely, will never please everyone. Shifting national priorities and politics see to it that the board remains a target of some criticism.
In the document, the five-member panel, assembled by Prime Minister Justin Trudeau's Liberal government, spells out in no uncertain terms the NEB's crumbling credibility with Canadians. A major problem, it says, is widespread belief that the NEB has been co-opted by the oil and gas industry – that approvals of contentious pipeline projects are almost a foregone conclusion.
Some of that gripe comes from the fact that the board is staffed by Calgary-based industry experts who, by definition, have experience in the sector and therefore are biased toward it.
Not helping its case were allegations of bias in the approval process for TransCanada Corp.'s $15-billion Energy East pipeline that knocked the proceedings embarrassingly off course.
The panel recommends more inclusive, expansive and lengthy consideration of projects to help calm the public fears. That's risky. Proponents could find it takes so long that their business cases evaporate due to market changes before they can begin digging. Confidence, among investors in this case, would suffer.
So, it's a tricky balance.
First, the Expert Panel on the Modernization of the National Energy Board recommends nothing less than a national energy strategy. The report calls for a blueprint that brings in social, economic and environmental considerations in consultation with the provinces and Indigenous peoples – a set of principles that square oil sands development with climate-change-fighting efforts to guide to the regulator's actions.
This would presumably prevent such debates from erupting at hearings for specific applications, but it seems akin to asking for the sun, moon and stars. The concept has bedevilled politicians, especially Alberta premiers, for years.
In the last month alone, Canadians have watched Kinder Morgan's Trans Mountain expansion project – which has its federal approvals – re-emerge as a hot political issue in the British Columbia election and threaten relations between that province and Alberta. Politics is never too far when it comes to energy development.
The panel also recommends the board – which would be renamed the Canadian Energy Transmission Commission – undertake a new process for decisions on major projects that includes a year to come up with whether the application is in the national interest, then another two years of environmental assessment.
In 2012, the Harper government put a 15-month deadline on proceedings and also gave Ottawa the power to turn a "no" from the board to a "yes" if the federal cabinet determined a project was in the public interest.
As far as perceptions that the NEB has become a part of the home team in energy development, the panel suggests some functions be moved out of Calgary, including the board of directors, which would be located in Ottawa to bolster "representativeness."
Alberta Premier Rachel Notley was less than thrilled with the idea when asked about it on Tuesday: "Just let me just say that moving the NEB to Eastern Canada is dumb. We are absolutely opposed to that and it shouldn't happen."
Natural Resources Minister Jim Carr welcomed the report, but said the government will consult more with Canadians about how to overhaul the board. He's got time.
Any changes won't affect the Energy East proposal, and Ottawa has already approved oil pipelines including Trans Mountain and Enbridge's Line 3 replacement.
It could be many years before there's another major pipeline application to argue about.
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Jeffrey Jones