Business

Tweaks planned for the NEB, but it may need an overhaul

While the federal government is intent on tweaking the country's national energy regulator, a former pipeline review panel member suggests the NEB needs to overhaul how it reviews major pipeline projects.

How about thinking about the people who live along pipeline routes for a start?

Security guards try to restrain a demonstrator from interrupting the National Energy Board public hearing into the proposed $15.7-billion Energy East pipeline project proposed by TransCanada on Aug. 29 in Montreal. (Paul Chiasson/The Canadian Press)

The federal government wants to tweak Canada's national energy regulator, but a former pipeline review panel member believes the NEB needs more than cosmetic changes.

Hans Matthews, one of three NEB panel members to evaluate Enbridge's Northern Gateway pipeline proposal, is convinced the regulator needs a complete overhaul to be effective. 

One thing that kept coming up was that the National Energy Board very rarely turns down a project- Hans Matthews, former NEB panel member
The NEB will decide later this week at the earliest how and when it will continue with hearings into TransCanada's proposed Energy East pipeline after protests in Montreal delayed the proceedings. Minister of Natural Resources Jim Carr wants the timing of continued hearings resolved immediately. 
A demonstrator is taken away by a police officer after disrupting the National Energy Board public hearing into the Energy East pipeline project. Canadians distrust the NEB, a survey shows. (Paul Chiasson/Canadian Press)

The federal Liberals campaigned on a promise to modernize the NEB and are acting on that pledge through a series of proposed changes, as outlined in a document sent to Carr in April, which was obtained by CBC through an Access to Information Act request.

There are six areas of primary concern with the NEB and its processes, according to the document:

  1. Environmental assessment and regulatory reviews (public participation and the scope of NEB reviews)
  2. Indigenous participation and engagement
  3. Governance (board's composition and structure)
  4. Lifecycle management (tracking, monitoring and reporting on compliance after project approvals)
  5. Safety and emergency Preparedness (safety standards and best available technology)
  6. Mandate (whether to expand the role of the NEB into emerging areas such as marine renewables)

The question is whether the regulator needs small tweaks in these areas or an overhaul.

Matthews sat through 180 days of hearings, which sometimes lasted 12 hours, in large cities and small communities along the pipeline route. Before conducting further reviews, he says, the NEB needs to fix how it handles environmental and First Nation issues.

The National Energy Board has to find a way to embrace those issues before any more reviews go ahead, if it wants to be truly comprehensive in its work, he says.

"They may have to look at some kind of re-engineering, instead of being on the defensive all the time," Matthews added. 

Public trust lacking

Canadians generally lack trust in the NEB and the document suggests the federal government wants to make changes before it fully supports the regulator. A survey commissioned by the CBC earlier this year suggested half of Canadians are not confident in the energy regulator. 

The federal government changes to the NEB should be fully implemented by June 2018, according to a letter from deputy minister Bob Hamilton to minister Carr.

"The NEB process has been subject to significant criticism and public debate," writes Hamilton. "The objective is to position it as a modern, world-leading energy regulator."

National interests vs. local concerns

Matthews wants the regulator to put more of a focus on the people who actually live along the route of a pipeline, instead of its current focus on whether a pipeline is in the country's national interest. 

The federal government recently said a lack of pipeline infrastructure to access global markets cost Canadian producers $7 billion a year between 2011 and 2013, a total of $21 billion over three years. That amounted to one per cent of Canada's GDP. That finding plays to the argument that pipelines are in the national interest, but glosses over local concerns.

While there were always protests outside of the Northern Gateway hearings and occasionally inside, few were as serious as those in Montreal last week in which police had to remove protestors. Matthews suggests the disruptions are because people are frustrated.

"One thing that kept coming up was that the National Energy Board very rarely turns down a project," he said. "Many people feel that their voices aren't going to be heard."

That has led some people to question the usefulness of participating, if the project is going ahead anyway. If they do participate, it could be in a different form, such as protesting.

While the NEB may be a green light machine, it doesn't always give a rubber stamp. Matthews and his two other panel members recommended Northern Gateway be approved, but imposed a significant number of conditions, requiring Enbridge shore up its design and improve First Nations consultations, among other issues. 

Many people feel that their voices aren't going to be heard- Hans Matthews

"That was the compromise we had as a panel," he said. "We felt that [Enbridge's plans] didn't go far enough, so we imposed the 209 conditions to hopefully address those shortcomings."

Those conditions, as well as court challenges and other opposition, effectively shelved the pipeline proposal.

Caught in the middle of the process to restore trust in the NEB are the companies trying to construct new export pipelines. The initial changes to the NEB announced in January impacted both Kinder Morgan's Trans Mountain and TransCanada's Energy East proposals. While Trans Mountain didn't need to start the review process from scratch, the changes delayed the deadline for the federal government to make a decision to December of this year, instead of August. 

Energy East was also delayed. In total, the project will undergo 27 months of review.

About the Author

Kyle Bakx

Reporter

Kyle Bakx is a Calgary-based journalist with CBC's network business unit. He's covered stories across the country and internationally.

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