National Energy Board Modernization – Hearings are underway

Public hearings by the Expert Panel on the Modernization of the National Energy Board   began in Saskatoon in January and will conclude in Montreal at the end of March (the schedule is here ).  With transparency and accountability a key concern about the NEB, it is surprising that no transcripts or submissions will be made available online, only government- prepared summaries . Fortunately, press reports are providing the public with some information:  an important example, a report by Andrew Nikoforuk from the Vancouver hearings appeared in The Tyee on  February 9, summarizing the testimony of Marc Eliesen, a former chair of Ontario and BC Hydro and a critic of the NEB since the 2014 Trans Mountain Pipeline hearings.  As quoted in  “Time to Reform Our ‘Captured’ National Energy Board, Says Expert” ,    Mr. Eliesen reiterated his earlier criticism that the NEB  a “captured regulator” that no longer operates in the public interest. “The attitudinal bias that stems from a close interaction between NEB board members, NEB staff and the energy industry, means the goals and aspirations of the Alberta energy sector have become those of the board.” Eliesen recommended that all current NEB board members should be replaced by people from a broader range of expertise, not just the oil and gas industry. He also recommended that the NEB’s head office be moved from Calgary back to Ottawa. In “How to Fix the National Energy Board, Canada’s ‘Captured Regulator’”  , DeSmog Blog (Feb 8) also summarized Eliesen’s testimony, as well as that of  Eugene Kung, staff counsel at West Coast Environmental Law.

Proposals for improving the discredited NEB have come from a Pembina Institute report:  Good Governance  in the era of low carbon: a Vision for a modernized National Energy Board   . From Pembina: “significant reforms to the NEB Act, and to the operating culture and practices at the Board, are required.”  The report lays out 9 essential conditions to transform energy regulation, including : “Energy regulators must be independent of bias and interferences from government and non-government stakeholders. …Energy regulators should proactively  and predictably support involvement of all interested parties and the public as a fundamental component of evidence gathering, decision-making and monitoring.”  Environmental Defence  has also weighed in with “Six key ways to modernize energy regulation in Canada”, and has also called for the restart of the Energy East Pipeline review process to wait until new rules for the NEB are in place. (the previous Energy East Review was declared void in January 2017).   The report and recommendations of the Expert Panel on Modernization of the National Energy Board is scheduled for  submission to the Minister of Natural Resources by mid-May 2017.

A whiff of the bias that so many have noted at the NEB continues, in one of the “related documents” provided at the Expert Panel website: the Interim Report of the Standing Senate Committee on Transport and Communications, titled Pipelines for Oil: Protecting our Economy, Respecting our Environment   (Dec. 2016).  It begins: “Petroleum pipelines, like highways, railways and power line corridors, are long established in Canada. They are instrumental to the quality of life and the standard of living we enjoy in Canada today. Pipelines have no equal when it comes to the safe, reliable and cost-efficient movement of petroleum over long distances. They are critically important to the creation of wealth in Canada and their use and development are in the public interest and the greater good of all Canadians.”  It pronounces on the concepts of social license, the public good, confidence in the regulatory process, then proposes an oil transportation strategy which includes pipelines and tankers.  From the conclusion:  “The Committee believes that new pipelines will act as a lifeline to the Canadian economy, which has been hard hit in the oil and gas sector. Pipelines to the east and west coasts will ensure that Canadian oil producers get the full value of this resource on world markets, reduce refineries’ dependence on oil imports and improve public safety. The Committee has made recommendations to Natural Resources Canada, Transport Canada, and Fisheries and Oceans Canada. The Committee believes that these recommendations will help form a strategy to improve public confidence and break the paralysis preventing the construction of pipelines in Canada.”

Finally, the National Energy Board Modernization process is underway

The Review process for the Modernization of the National Energy Board has begun.  The Terms of Reference  are here, summarized on the website as focussing on “ governance and structure; mandate and future opportunities; decision-making roles, including on major projects; compliance, enforcement, and ongoing monitoring; engagement with Indigenous peoples; and, public participation.” Twelve Discussion Papers are available   to guide input.  Comments can be submitted online here , with a deadline of  March 31, 2017;   cross-country “engagement sessions” for the public will begin in Saskatoon on January 25, and end in Montreal on March 29.  The Expert Panel will deliver its report to the Minister of Natural Resources, with a  May 15 deadline.     See an article in the  National Observer (Jan. 16) , which notes that the process launch comes amidst legal challenges: Two First Nations of Northern Ontario have named the National Energy Board and the government of Canada as defendants in their suit against TransCanada pipeline, for failing to consult with them before  allowing work on a 30-kilometre stretch of the pipeline that runs through their traditional territories  (details here) .  A second  court challenge was filed on January 10 by community group Transition Initiative Kenora, asking that the entire Energy East consultation process be voided and re-started, because of the conflict of interest allegations of the Charest Affair  in  Fall 2016.     (more details about the court challenge from Energy Mix here or from Ecojustice here  )

Update: National Energy Board suspends Energy East hearings, Regulatory review process underway

On September 9, public outcry about  the NEB “Charest Affair” became too strong to resist, and the NEB announced  that the Energy East hearings are adjourned, that all three panelists have voluntarily recused themselves, and the hearings will be reconvened once a new panel can be constituted.  In addition, the the Chair and Vice-Chair are recusing themselves  from administrative functions related to the Energy East process, and will not be involved in the selection of the new panel.   For a recap of this unexpected turn of events,  and the series of investigative reports which led to the exposure of the entire “Charest Affair” , go to the National Observer.  See also the Environmental Defence blog (Sept 9)    and the Energy Mix coverage here and here.

In mid-summer, WCR  wrote:  “Canada’s National Energy Board was served a legal notice on August 11, the latest fall-out from news reports in July which revealed  that Jean Charest, former Premier of Quebec and a paid consultant to TransCanada at the time, met privately with NEB Board members to discuss the Energy East pipeline proposal. The panelists met privately with other registered intervenors, including the Board of Trade of Metropolitan Montreal  and Équiterre – a Quebec-based environmental group, despite NEB’s own rules that require it to review projects in public, keeping a full record of discussions, and to use a fair and transparent process.  The revelations would not have come to light without the digging of a National Observer reporter and his Freedom of Information requests;  the NEB has now apologized for the meetings and released some records and emails.  According to a series of reports in the Globe and Mail in March 2016 (here  and here)  Jean Charest has also been investigated for his attempts to contact the Prime Minister’s Office about Energy East, but was cleared of breaking lobbying rules in March.

The NEB officials who conducted the “off-the-record”  meetings  are now panelists on the NEB hearings on Energy East,  currently underway in New Brunswick . The legal letter  sent on August 11 demands that the Energy East hearings be suspended; a new panel be struck  to conduct hearings into the private meetings; and two senior members of the NEB ( the Chair and Vice-Chair) who both participated in the controversial meetings, must be excluded from any duties related to Energy East during the course of the investigation . The legal letter was sent on behalf of two Quebec advocacy groups: Stratégie Énergétiques and the Association Québécoise de la Lutte contre la Pollution Atmosphérique (AQPLA).

Reaction to the controversy is summarized in  “Charest pipeline controversy flares as May calls for resignation from federal panel”   in the National Observer (August 8).  And Chantal Hebert sums it all up succinctly in “National Energy Board’s credibility as an independent agency at stake: Hébert”  in the Toronto Star, (August 11). To date, the federal Minister of the Environment and Climate Change hasn’t addressed the NEB controversy directly, but urged Canadians to have confidence in the system during a news conference in Halifax in August.

In September, environmental groups, including Greenpeace Canada, the David Suzuki Foundation, the Association québécoise de lutte contre la pollution atmosphérique, Nature Québec, and the Council of Canadians sent a letter to the Minister of Natural Resources,   demanding a suspension of hearings and an investigation into the NEB. (See a summary at the National Observer ) .

The National Energy Board controversy is part of the poisoned chalice passed down from the Stephen Harper government, which the current Liberal government is attempting to deal with through regulatory review.  In June,  the federal government announced   a comprehensive review of environmental and regulatory processes – including “modernizing” the National Energy Board, and restoring protections in the Fisheries Act.  On August 15, a second announcement  described the creation of a four-member Expert Panel to undertake the review of federal environmental assessment processes, and stated that public consultation would begin in September. The Terms of Reference for the Panel are here   ; the Review website is here.

In anticipation of the Review, the West Coast Environmental Law Research Foundation convened a Summit of Experts in May 2016, and in August, published an Executive Summary of the proceedings, setting out twelve “pillars” of a next-generation environmental assessment,  based on the key principles discussed.  Amongst the pillars: a call for recognition of the rights of Indigenous people, improved consultation and information flow to the public, and the consideration of the impact on Canada’s GHG reduction targets as agreed to in the Paris agreement.

News updates for June 2016: Canada

 REVIEW OF THE NEB AND ENVIRONMENTAL ASSESSMENT:   On June 20, the Federal government announced  a “Comprehensive Review of Environmental and Regulatory Processes” , involving six ministries: Fisheries and Oceans; Environment and Climate Change; Transport;  Science and Innovation; Indigenous and Northern Affairs; and Natural Resources. A dedicated website houses consultation documents and allows for public input,  since “Consultation will be at the core of this review”.  An expert panel will review the National Energy Board and submit its findings in early 2017; similarly, another panel will review the Environmental Assessment Agency .  The Navigation Protection Act and the Fisheries Act will be reviewed by parliamentary committees starting in the Fall 2016, with a report due January 2017.   See the CBC  or the National Observer    for summaries.

CANADA AND G7 NATIONS PLEDGE TO END FOSSIL FUEL SUBSIDIES: At the G7 Summit in Japan at the end of May, member nations, including Canada, set  a deadline to end government support for coal, and  oil and gas by 2025. The text of the Final Leaders’ Declaration  doesn’t define “subsidy” and  leaves wiggle room by indicating “inefficient” subsidies (see page 7).  And an article in The Guardian singles out Britain for new North Sea tax breaks, Japan for coal expansion,  and Canada for extending subsidies for natural gas production in the February 2016 budget.

Northern Gateway Supreme Court Decision, and Kinder Morgan Pipeline battles in British Columbia; NEB improvements promised

On January 13, the B.C. Supreme Court ruled that the B.C. government breached its duty to consult the Gitga’at and neighbouring First Nations on the Enbridge Northern Gateway pipeline. The decision is seen as a major victory for Coastal First Nations , effectively nullifying the federal government’s initial approval of Northern Gateway , and also providing a precedent protecting First Nations rights in the Trans Mountain pipeline hearings. “ First Nations win court challenge against B.C. over Enbridge pipeline”  includes a copy of the Court’s decision. The West Coast Environmental Law group provides a history of the Northern Gateway case, and its implications for the Kinder Morgan NEB review in Province Can’t Pass the Buck on Oil Pipelines: BC Supreme Court.

The B.C. government formally submitted its letter of opposition to the Kinder Morgan Trans Mountain Pipeline  to the National Energy Board on January 11 , citing the grounds of safety and the risks of an oil spill. Unifor has also consistently opposed the project, seeing it as a exporter of energy jobs, and a threat to its members in the fisheries industry. (Alberta submitted its letter of support on January 12 ).    Even U.S. Aboriginal tribes have filed complaints before the NEB regarding the threat of Kinder Morgan, according to a report in The Guardian . Read an overview of the arguments against KinderMorgan from EcoJustice  . The Tar Sands Reporting project of the National Observer, based in Vancouver, has compiled a series of articles documenting the NEB hearings and the many public protests.

The Kinder Morgan NEB hearings have developed as a symbol of the new Liberal government’s intention to live up to its campaign promises  to review the NEB process and restore transparency and evidence-based decision making in environmental assessments, according to DeSmog Blog.

The Report of the Commissioner of the Environment and Sustainable Development  was tabled in the House of Commons on January 26, and was strongly critical of the National Energy Board’s regulation of pipeline projects. (The CBC summary is here ) . In response, the government has promised additional climate tests and First Nations’ consultations for the Kinder Morgan Trans Mountain pipeline, Energy East pipeline, and Pacific NorthWest’s planned LNG export terminal in B.C., according to the Globe and Mail on January 25. (“Ottawa to mandate climate tests for proposed pipelines, LNG terminal ” )