An efficiency overhaul of the Canadian energy and environment regulatory apparatus, by legislation currently before Parliament in Ottawa, is coming just in time for the country’s chief oil, gas and power watchdog.
“In the coming year we expect to see a record number of applications,” National Energy Board (NEB) chairman Gaetan Caron says in a 2012-13 Report on Plans and Priorities, presented to the House of Commons as part of its annual budget debate. The “unprecedented increase in industry applications” is currently expected to include 27 major projects in fields from exploration on federally controlled territory to pipelines and power transmission.
If the year evolves as anticipated, the volume of activity will be nearly double the 15 applications received last year and more than triple the eight proposals filed with the NEB in 2010.
As a barometer of the oil and gas industry’s growing role in a Canadian economy that the ruling Conservatives have vowed to accelerate by making the nation a global “energy superpower,” the NEB stands apart from the rest of Canada’s federal government. The board’s 2012-13 budget is going up by 8% to C$63.3 million. No jobs cuts show in NEB employment projections for this year, 2013-14 or 2014-15, leaving intact the current roster of 394 full-time positions. The agency is a rare exception to an austerity drive that the Conservative administration has launched with a declared objective of eliminating budget deficits.
As the NEB projections surfaced, waves of cuts were under way to hit overall federal government targets of lopping C$5.2 billion off annual spending and cutting 19,200 civil service jobs over the next three years. At the same time, Conservative cabinet ministers fended off criticism from conservation groups and parliamentary opposition parties against a regulatory efficiency package incorporated into the government’s omnibus 2012-13 budget legislation.
Since the Conservative party has a healthy majority, the packaged budget and regulatory measure has a good chance of crossing the finish line relatively unscathed.
The overhaul’s prime target is preventing repetition of delays that dragged out the approval process to seven years for the Mackenzie Gas Project, effectively stalling Canada’s Arctic gas and liquid byproducts production and pipeline development long enough for changing markets to render it uneconomic. The Conservatives have emphasized that they want to prevent the same fate from overtaking current promising industrial proposals, led by new pipelines and tanker terminals for overseas exports of oilsands bitumen and liquefied natural gas (LNG).
Among the reforms, the most hotly contested changes will boil the number of Canadian federal bureaus that issue permits down to three from about 40: the NEB, the Canadian Environmental Assessment Agency and the Canadian Nuclear Safety Commission. All will be required to comply with time targets for completing cases, from two years for the biggest projects down to a few months for smaller, simpler schemes. A multitude of other agencies and departments may be participants in the reviews, serving essentially as consultants, but will no longer have decision-making powers.
The federal legislation adopts a disciplined approach to “standing” or participation rights that Alberta and British Columbia (BC) authorities have used for generations to prevent regulatory filibusters by project opponents. The new standard will limit interventions in cases to people, groups or agencies that are directly and adversely affected or show they have relevant expertise and experience to contribute.
In addition the measures may allow the central government to shift responsibility for some environmental assessments to the provinces. All of the above have unleashed heated attacks from the environmental sector.
Risks of delays under traditionally looser federal regulatory rules are currently highlighted by hearings across BC and Alberta on one of the overseas export projects, Enbridge Inc.’s Northern Gateway proposal for a new oilsands conduit from Edmonton to a tanker terminal on the Pacific coast at Kitimat, BC. Environmental organizations enlisted about 4,000 of their members to intervene in the Gateway case by taking advantage of an NEB community participation procedure that allows town hall-style opinion speeches by project opponents.
Voluminous transcripts are currently recording an encyclopedic record of aboriginal lore on places along the proposed pipeline and tanker routes and environmentalist opinion of the Alberta oilsands, tankers and the fossil fuels and industry in general. The NEB’s plans and priorities report to Parliament pledges to “stay focused on what matters most: public and worker safety, security, environmental protection and economic impacts,” with “decisions based on the evidence.”
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