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National Energy Board carries on as political winds swirl

The threaded end of one of hundreds of drill pipes is shown in front of the Baytex Energy Ltd.'s Pembina oil rig near Pigeon Lake, Alta., in 2012.

Norm Betts/Bloomberg

Is the National Energy Board suffering through a midlife crisis?

Watch the federal election campaign, and you'd think so.

Once the staid setter of pipeline tariffs and arbiter of whether energy projects are in the public interest, today's NEB holds hearings that have become battlegrounds for environmental controversy. Its methods for reaching decisions are increasingly under fire.

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Some 56 years into its existence, federal leaders including the NDP's Thomas Mulcair and the Liberals' Justin Trudeau say Canada's main energy regulator needs to be yanked into the more environmentally conscious present and that climate change must be part of the calculus for saying Yea or Nay on developments.

Stephen Harper's Conservatives have done what they can with the board's legislation to keep reviews humming along as the oil industry complains that market opportunities are slipping away owing to incessant regulatory delays and opposition.

Meanwhile, NEB regulators are dutifully going about their appointed rounds, considering the social, economic and environmental impact of massive pipeline proposals, such as Kinder Morgan's Trans Mountain Expansion Project, using the tools they currently have at their disposal while salvos are volleyed overhead.

I don't envy NEB chairman Peter Watson, who, realizing the snowballing environmental concerns early in his seven-year tenure, launched a campaign to familiarize Canadians with the workings of the agency – what it is responsible for and what it isn't. Now, those responsibilities are being debated on the political stage.

Mr. Mulcair has said on the campaign trail that the board must take into account carbon emissions as it weighs the costs and benefits of projects. Not doing so has hurt Canada's reputation, he asserts.

This calculation, of course, is a head scratcher for pipelines, because it is almost impossible to assign specific emissions from production facilities – say, three or four oil sands projects – to one new transport conduit without having done a similar assessment for the previous ones that may have already been fed by them.

But that has been a top criticism of the board's mandate among pipeline opponents – one that the City of Vancouver trumpeted last year when it sought a judicial review of the NEB process for the $5.4-billion Kinder Morgan project, which runs to the Vancouver area from Alberta.

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In March, the environmental group ForestEthics Advocacy and some allied citizens went to the Supreme Court of Canada to complain their rights of free speech were being violated because the NEB was restricting who could speak at hearings and the topics that could be discussed (for instance, climate change).

Mr. Mulcair has said an NDP government would make sure projects are assessed to ensure they are consistent with Canada's climate-change goals, but the party has been vague on whether that can be done while oil sands production rises – and how exactly the NEB fits into it.

Mr. Trudeau said he wants to "modernize and rebuild trust" in the board, and has pledged to replace Mr. Harper's streamlined project approval process with a process that allows the public to "meaningfully participate" at hearings and bolsters oversight.

At the root of these arguments are the changes that the Harper government made in 2012 under sweeping legislation aimed at speeding up approvals for major projects, starting with the hearings for Enbridge Inc.'s Northern Gateway pipeline.

Among numerous changes, Bill C-38 reduced the number and scope of environmental assessments, and pushed some of that responsibility to the provinces. It gave the federal cabinet final say on whether to accept the board's decisions and imposed strict timelines on hearings.

Critics have said the moves, and others that were part of the omnibus bill, amounted to a "gutting" of environmental legislation, and the federal challengers have adopted similar language.

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Summary oral arguments for the Kinder Morgan hearings are set to get under way next week in Calgary as the federal campaign plods along toward an Oct. 19 vote.

The board that was born of controversy over pipeline debates in the late 1950s will be surrounded by politics again as it goes about its business. Depending on who wins the election, it may end up with different tools to do its job and new measurements on which to base its decisions.

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