Notes for a presentation in Saint John at the NEB Modernization hearing, March 21st, 2017.
My Thanks to the Panel for giving me the opportunity to present my
views this morning.
While organisational, and process modernisation are key components
of your initiative, I believe it is a change in Mandate that should drive
any need for organisational and process reform or enhancement.
The historical context for establishing the NEB explains in part the
depth of challenge you have today in reframing it as an effective
broker in a broader, energy debate.
The NEB was shaped by the West’s need to get resources to market
in the late ‘50s.
History buffs will remember the national pipeline debate precipitated
by C.D. Howe who decided that a pipeline to carry natural gas from
Alberta to central Canada was a “national necessity”.
((- http://www.thecanadianencyclopedia.ca/en/article/pipelinedebate/.
Accessed Mar 13th 2017.))
That 1956 debate played out in Parliament and it was bitter. The bill to
create Canada’s first National Pipeline was approved. But, its passage
was blamed for the defeat of Louis St. Laurent’s Liberals and the
subsequent election of the Diefenbaker conservatives in 1957.
Ironically, Dief was opposed to the TCPL national gas pipeline. But once in
office he articulated the need for another pipeline, an oil pipeline to the
east to provide a market for Alberta’s independent oil producers.
These events, we are told, were the impetus for his establishment of
the NEB.
In the end, an all-Canadian oil pipeline to Montreal was never
built and cheaper foreign oil continues to drive eastern refineries while
Alberta still depends, largely on sales into the US market.
Here in New Brunswick, we understand this north-south orientation
very well.
Our local refinery is responsible for about 70% of Canada’s
refined petroleum product exports, shipped largely by sea into New
England.
Energy also moves through our province in the form of a gas
pipeline and by wire through electric power interconnections with the
State of Maine.
Given the renewed debate about pipelines from the west, it’s not
surprising that the NEB is still seen by some as carrying out the role
intended by Diefenbaker; a pipeline regulator whose job has changed
little from when Dief sought the help of Henry Borden to enable a new
market for Alberta’s oil.
Clearly Much has changed in the last 58 years:
• “Energy” is much more than fossil fuels;
• Science has improved our understanding of human impacts on our
planet;
• a revolution in science and engineering has had profound effect, not
only on the way we produce energy but also on its availability;
• Technology has also changed the way we consume energy and has
increased the interconnectivity among fuel types;
• EVs for example, have brought electricity into competition with oil in
the transport sector;
• Aboriginal rights have been clarified and Canadians expect its
government to honour those rights; as well as…
• our international obligations with respect to climate change.
– Yet while our energy horizon has transformed, the public’s view of
the NEB’s role has remained all but constant during that time.
And now we wonder what role if any, the NEB will fulfil in shaping our
new energy future if and when we leave the age of oil?
The pipelines the NEB is reviewing today may well see us past peak
consumption of oil and may even become stranded or orphaned by
change that is is increasing in intensity with each passing year.
However, the issues driving this are occurring almost completely
outside the traditional mandate and focus of the Board.
If today’s government wants the NEB is to be seen as more than a
facilitator of pipelines from the West, then its mandate should be
rethought in a way that breaks with this tradition.
Frankly it matters not a wit if the NEB returns to more open and
accessible public hearing processes, if it remains set the era of the
’50’s.
Why would you reinvent a buggy whip if there was not a market for it?
Just as it may be premature to get into the weeds on process
issues before addressing mandate, it would also be premature to
address the question of Mandate without first looking at what we want
to accomplish as a nation in the field of energy and the environment.
It will always come down to the need for a national vision, or a national
energy policy, or a national energy framework, or a national energy
program or as one of my former NRCan Deputy ministers frustratedly
called it, a “National energy Thingy”.
Well thingy or not, Canada must have Energy Security and,
– It must be Sustainable and Affordable
These 3 goals have always formed the basis of what we thought
underlay the need for national energy policy.
But the National Energy Program(NEP) debate has poisoned the environment
for any national energy vision for about the last 30 years.
Other than a few halfhearted efforts after the NEP was eviscerated in
the early ’80’s, no serious attempt has been made to replace it.
I believe that the lack of a national energy policy means that not only
is the NEB without guidance, the public has no context with which to
judge the merits of energy development.
Every development that comes before the Board falls into a policy
vacuum and is forced to host a debate that re-plays the policy
challenges of the day in search of social license.
Today, development decisions must be made with more variables,
must be better informed, and must be taken before windows of
opportunity close. But without an evergreen energy plan, Canada is
missing opportunities by not examining alternatives.
If Canada really is the energy superpower the previous Prime Minister
boasted about, and if that status is still based on 165billion boe in
bitumen reserves, then we will cease to be even a minor energy
player if the world reaches peak oil demand in less than a decade
from now and Canada hasn’t developed options.
The National Energy Board is facing change without the remit to
address the underlying issues driving it or to resolve the choices we
face.
Any modernisation effort that doesn’t reflect this changing landscape
will fall short.
If I have a single take away from the national pipeline debate it is this:
– We cannot expect each successive development review to
re-litigate the mountain of unresolved policy questions that have
balkanized public discourse in Canada. –
It’s not the current responsibility of the NEB to resolve a national
policy debate. But a national Energy Policy is clearly a prerequisite for
modernising the NEB!
So now I’ve sprung my own trap with respect to the need for a
renewed mandate that must follow from our admittedly nonexistent
National Energy Policy!
I’ll now walk to the end of my plank and propose that, in any event,
the National Energy Board should be rolled into a new
National Energy Agency with a broader, more balanced
focus on all forms of energy development, distribution, and
consumption …And with the ability to work with the provinces on
areas of overlapping jurisdiction.
Yes, some of this expanded mandate will appear to create over lap.
I’m not suggesting we do that. On the contrary I believe we need to
develop new partnerships with the provinces to reflect our new interconnected,
interdependent world of energy.
But someone has to lead! For too long the energy policy area was vacated by the Feds, it has languished. And I say this understanding that the Provincial efforts to do this on their own have been an abject failure.
Given the lack of time, I will use a broad brush to paint a rough picture of what a new agency might look like. I’d be happy to follow up if you want more detail.
- The new agency should have a policy function, one where its
operational experience can feed back lessons learned in real time;
And of course, the policy function would still rely on the government of
the day for general scoping and direction and final approval.
- The Agency should have a role in science innovation, development, and mandate to do outreach in areas like energy efficiency;I’m struggling on how to deal with the regulatory function. I favour separating the health, safety and environmental protection from
from the development review function.
• I believe the new agency should be headquartered in Ottawa and
with operational divisions in three locations; West, Central &
East, perhaps sharing some space with the offshore boards in Nova Scotia or Newfoundland and Labrador.
• Permanent Board Members, if that is the model adopted, should
reside in one of the three regional office cities and/or Ottawa.
• AS for public engagement, clearly the changes that locked down
public hearing processes ought to be reversed and ongoing
engagement with first nations should be strengthened.
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