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NEB Chairman: Regulator Needs to Change For New Era

The Canadian government is being pressed by its own National Energy Board (NEB) to heal political sore spots that have slowed the regulatory process to a crawl through barrages of environmental, community and native protests.

“We know we cannot satisfy everyone,” NEB Chairman Peter Watson said in the newly released text of an appeal for help to a five-member panel appointed by the Liberal federal cabinet to review the board’s mandate and structure. “The energy policy debates are currently too polarized.

“The NEB was established in 1959 to move the decision-making power over pipelines to an independent quasi-judicial regulator whose decisions would not be based on politics.”

But the regulatory regime’s original purpose of enabling efficient and safe natural gas and oil development, investment and employment has been overtaken by a change of public and government emphasis across Canada.

Watson said the shift was obvious by the time he was appointed board chairman in August 2014. “It was clear that the NEB, as well as Canada’s entire energy system, was entering a new context defined by global issues like climate change and transition to cleaner forms of energy, reconciliation with Indigenous peoples, and overall increased interest and concern about safety and environmental protection at local, regional and national levels.”

Watson said, “Policy clarity from the government would be helpful.” His wish list of national political and legislative direction includes, “for example, additional clarity on issues such as climate change, Indigenous issues and consultation outside of a specific project, marine shipping, transition to different forms of energy, areas of shared jurisdiction with the provinces, and the treatment of cumulative effects on a regional scale.”

The NEB chairman warned, “These are broad system-based policy issues, outside the scope of any specific project, which the NEB cannot consider properly without additional guidance and direction from government.”

Watson’s wish list of national policy clarifications describes demands and protests that the NEB repeatedly faces in prolonged, hotly contested regulatory reviews of plans for export pipelines to tanker terminals on the Pacific and Atlantic coasts.

In the absence of national policy answers, “A challenge we regularly face with respect to public participation in pipeline hearings is the frequent difference between the expectations of participants and our legislated mandate,” Watson said. “Many participants expect to be heard on policy or system-level issues, such as climate change, that are outside of our project-specific mandate.

“Participation should serve the purpose of informing the NEB of the facts and circumstances necessary to make a public interest determination or recommendation regarding a specific project. Project-based hearings are not the best place to debate matters of broad energy policy.”

The Liberal government’s NEB review panel is scheduled to complete a report in May. A parallel national environmental regulation review panel is also at work. A landmark ruling on native rights in regulatory processes is imminent from the Supreme Court of Canada, on appeals heard last Nov. 30 by Ontario and Nunavut tribes against NEB approvals of pipeline and Arctic offshore exploration projects.

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