ARCHIVED - National Energy Board - 2012-2013 Departmental Performance Report - Section II: Analysis of Program and Sub-Programs by Strategic Outcome

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Section II: Analysis of Program and Sub-Programs by Strategic Outcome

Strategic Outcome

The Board has one strategic outcome: Pipelines, power lines, energy development and energy trade are regulated in the Canadian public interest. The strategic outcome contributes to the safety of Canadians, the protection of the environment and efficient energy markets. To support this outcome, the Board has two programs: Energy Regulation and Energy Information. This section describes the targets for each program, and performance achieved against each indicator and target. Information is also provided on the financial and human resources that have been dedicated to each program area.

Strategic Outcome: Pipelines, power lines, energy development and energy trade are regulated in the Canadian public interest.
Performance
Indicators
Targets Actual
Results
Number of pipeline failures on NEB-regulated pipelines resulting in the release of liquid or gas. Zero One pipeline rupture.
Number of fatalities related to the construction and operation of NEB-regulated facilities. Zero Zero
Canadian prices for oil and gas are in line with continental prices. The price that Canadians pay for oil and gas is similar to export prices, based on comparison of relative prices. Canadian oil and gas prices remained similar to export prices in adjacent markets.

This Strategic Outcome is linked with three performance indicators. Two out of three performance indicator targets were met. The zero target for the number of pipeline failures on NEB-regulated pipelines was not met in 2012-13. On 28 June 2012, a rupture occurred on the Nig Creek Pipeline, 40 kilometres from Wonowon, B.C. A pressure drop was noted on the pipeline exiting the Nig Compressor Station, which was then shut down and isolated.

Program: Energy Regulation

This program enables Canadian energy infrastructure to be appropriately developed and managed throughout its lifecycle. This program also allows for the appropriate exploration and development of oil and gas in frontier and offshore areas.

The authority for this program is derived from the National Energy Board Act, the Canada Oil and Gas Operations Act, the Canada Petroleum Resources Act, the Canada Labour Code and other associated regulations and guidelines. As an independent regulatory tribunal, the NEB examines and makes decisions on public interest considerations related to safety and security, environmental protection, economic efficiency and the rights and interests of those affected by NEB-regulated facilities. Energy regulation provides Canadians with safe, reliable and efficient energy supply.

The Energy Regulation Program has two sub-programs:

  • Energy Regulation Development

    This sub-program provides the energy sector and affected stakeholders with the regulatory expectations required for the development and operation of energy infrastructure and for oil and gas exploration and development activities in frontier and offshore areas. The NEB develops and communicates regulations, guidance materials and related processes to ensure its regulatory expectations are clear and useful.
  • Energy Regulation Implementation, Monitoring and Enforcement

    Through this sub-program, the NEB efficiently makes informed decisions on issues and applications related to energy development, energy infrastructure, energy transportation, energy trade and related activities. The Board actively involves those interested in or affected by its regulatory decisions through public hearings and other engagement activities.

    Through risk informed compliance verification activities, the Board monitors and enforces regulated entities’ compliance with regulatory requirements. The NEB also oversees the safe, secure and economically efficient construction and operation of energy infrastructure. Through monitoring and enforcement, the NEB holds regulated entities accountable for results in the public interest.
Financial Resources - Energy Regulation Program ($ millions)
Total Budgetary Expenditures
(Main Estimates)
2012-13
Planned Spending
2012-13
Total Authorities
(available for use)
2012-13
Actual Spending
(authorities used)
2012-13
Difference
2012-13
32.9 35.6 44.8 44.1 8.5
Financial Resources - Energy Regulation Development Sub-Program ($ millions)
Planned Spending
2012-13
Actual Spending
2012-13
Difference
2012-13
6.4 8.0 1.6
Financial Resources - Energy Regulation Implementation, Monitoring and Enforcement Sub-Program ($ millions)
Planned Spending
2012-13
Actual Spending
2012-13
Difference
2012-13
29.2 36.1 6.9
Human Resources (FTEs) - Energy Regulation Program
Planned
2012-13
Actual
2012-13
Difference
2012-13
233.9 242.4 8.5
Human Resources (FTEs) - Energy Regulation Development Sub-Program
Planned
2012-13
Actual
2012-13
Difference
2012-13
34.8 36.1 1.3
Human Resources (FTEs) - Energy Regulation, Implementation, Monitoring and Development Sub-Program
Planned
2012-13
Actual
2012-13
Difference
2012-13
199.1 206.3 7.2
Performance Results - Energy Regulation Program
Expected
Results
Performance
Indicators
Targets Actual
Results
[a] The NEB’s risk informed approach to compliance activities may result in adjustments to the plan through the year.

Regulated activities are conducted in accordance with regulatory requirements.

Percent of major applications filed which are found to be deficient.

Less than or equal to 5% of major applications filed are found to be deficient, and are sent back to the applicant for re-submission.

No major applications were found to be deficient.

Percent of findings of non-compliance that are repeat findings.

Zero

Out of six audit reports, 13 per cent of the findings of non-compliance were repeat findings of noncompliance.

Clear and comprehensive regulatory framework.

Level of stakeholder satisfaction.

Greater than or equal to 80% of stakeholders surveyed are satisfied with the regulatory framework.

Unable to assess. There was insufficient data to support analysis.

Fair, transparent and efficient application assessment.

Stakeholder satisfaction based on post-decision feedback.

Greater than or equal to 80% satisfaction of stakeholders surveyed.

Unable to assess. There was insufficient data to support analysis.

Percent of successful judicial appeals related to fairness or legal principles.

Zero

Zero

Regulated companies are held accountable for results in the Canadian public interest. Percent of planned high-risk compliance activities completed.[a] 100% 100% of all high-risk compliance activities were completed.

Degree to which compliance-related information is publicly accessible per the Action Plan on Safety and Environmental Protection.

100%

100% of compliance-related information was publicly accessible.

Performance Analysis and Lessons Learned

Energy Regulation

In 2012-13, no major applications were found to be deficient, and none were sent back to applicants for re-submission.

The Board expects that pipeline companies operate in a systematic, comprehensive and proactive manner that manages risks. As required by the OPR, companies must establish, implement and maintain effective management systems and protection programs in order to anticipate, prevent, mitigate and manage conditions that may adversely affect the safety and security of the company’s pipelines, employees, the general public, as well as property and the environment. The Board utilizes a number of methods for assessing compliance with its regulatory requirements which include audits of company management systems and protection programs for safety, environment, integrity, pipeline crossings, public awareness, emergency management and security.

Following audits, companies are required to submit Corrective Action Plans to the Board that address all findings of non-compliance. Board staff follows up on the implementation of these corrective actions. Out of the six audit reports issued in the 2012-13 fiscal year, 13 per cent of the findings of non-compliance were repeat findings. These particular repeat findings were in the areas of:

  • hazard identification;
  • documentation & document control;
  • corrective & preventive actions;
  • communication;
  • legal requirements; and
  • management of change.

The Board’s target is for none of the findings of non-compliance to be repeat findings. The Board will focus on the above-noted areas in its coming audits and will monitor trends in findings to determine if broader industry-wide actions need to be taken.

The Board has already taken steps to reduce the number of repeat findings of non-compliance. One of these steps is the issuance of an amendment to the OPR which now requires companies to appoint an accountable officer to ensure that its management system is established, implemented and maintained.

The NEB did not measure stakeholder satisfaction during the year, as no post-hearing surveys were conducted during the period. As collecting meaningful and statistically significant data through surveys was a challenge now and in the past, the NEB has reviewed and updated its Performance Management Framework for 2013-2014 to better measure the expected results of NEB programs.

Actual spending for the Energy Regulation Program was $44.1 million. Actual FTEs totaled 242.4.

Energy Regulation Program Development Sub-Program

In support of a clear and comprehensive regulatory framework, the NEB:

  • Developed guidance, partnerships and awareness activities to promote working safely around pipelines.
  • Continued to implement the Action Plan on Safety and Environmental Protection.
  • Strengthened relationships with northern communities and organizations in order for the NEB to remain aware of the interests of residents.
  • Maintained and developed strategic relationships with other regulators.
Energy Regulation Implementation, Monitoring and Enforcement Sub-Program

In support of fair, transparent and efficient application assessments, the NEB:

  • Implemented amendments to the Filing Manual.
  • Implemented efficiencies in processing applications, including hearing processes, to ensure service standards are met by:
    • Tailoring procedural steps to align with project requirements, as appropriate.
    • Enhancing online processes to increase efficiency of routine import and export applications through the Commodities Tracking System.
  • Developed effective working relationships through the Land Matters Group so that concerns, views and opportunities related to land matters could be addressed collaboratively.
  • Advanced improvements to the Online Application System.
  • Initiated planning to secure additional resources to address significant major projects

In support of holding regulated companies accountable for results in the Canadian public interest, the NEB:

  • Provided industry with information to improve performance on a company-by-company basis through the six management system audits and through 86 compliance meetings with companies.
  • Continued to provide public access to information about NEB programs and the performance of regulated companies on safety and environmental protection through the posting of Board orders and audit reports on the NEB’s website.
  • Clarified management system requirements by amending the OPR which supports a systematic approach to managing and reducing risks related to safety and environmental protection.
  • Held companies accountable for the effectiveness of their management systems using compliance verification tools, including six audits and the requirement for companies to report leading and lagging performance indicators related to their safety, integrity, environmental protection, crossings, public awareness, emergency management and security programs.

Program: Energy Information

Under this program, the supply, demand, production, development, transmission and trade of energy are analyzed to ensure the requirements of Canadians are appropriately met. Advice may be provided on energy issues of interest to Parliament. The Board uses energy information to inform its regulatory decisions and to produce publicly-available assessments of energy trends, events and issues which may affect Canadian energy markets and the supply and demand for energy. The authority for this program is derived from the National Energy Board Act.

Financial Resources - Energy Information Program ($ millions)
Total Budgetary Expenditures
(Main Estimates)
2012-13
Planned Spending
2012-13
Total Authorities
(available for use)
2012-13
Actual Spending
(authorities used)
2012-13
Difference
2012-13
6.6 6.7 8.0 6.0 -0.7
Human Resources (FTEs) - Energy Information Program
Planned
2012-13
Actual
2012-13
Difference
2012-13
31.4 38.1 6.7
Performance Results - Energy Information Program
Expected
Results
Performance
Indicators
Targets Actual
Results

Canadians benefit from energy related information.

Feedback from internal and external clients on Energy Information Program products via questionnaires after workshops, comment cards with publications, interviews with clients.

Greater than or equal to 80% of feedback from clients indicates they find Energy Information Program products useful and relevant.

98% of internal clients rated Energy Speaker Series events “interesting and informative” and “topics/speakers relevant to their work”.

The Petroleum Industry Research Association (PIRA) multi-client forum referenced data and observations from the NEB’s Energy Futures report.

Environment Canada’s Canada’s Emissions Trends 2012 references the Energy Futures report and notes the Board’s “extensive consultation process” in developing energy demand and supply assumptions.

Performance Analysis and Lessons Learned

Energy Information

This year, the NEB focused on building analytical capacity and making revisions to its market monitoring program to reflect the changes to export legislation resulting from the Jobs, Growth and Long-Term Prosperity Act. As a result, fewer energy information publications were produced than in prior years.

Two Energy Market Assessments, the Short-term Canadian Natural Gas Deliverability 2012-2014, and the Energy Futures Backgrounder, were published. The latter is a companion piece to the prior year’s report, Canada’s Energy Future: Energy Supply and Demand Projections to 2035. The Backgrounder report responds to the interest stakeholders expressed in obtaining supplementary energy futures information.

The NEB also published its regular Summer and Winter energy outlooks and the annual Canadian Energy Overview.

Two planned products, the Short-term Canadian Natural Gas Deliverability 2013-2015 Energy Market Assessment, and Ultimate Potential for Unconventional Hydrocarbons in the Montney Tight Gas and Tight Oil Play, were postponed to 2013-2014.

This allowed the NEB to focus on building a new market monitoring program to support the Board’s mandate under the revised Part VI of the NEB Act, pursuant to the changes resulting from the Jobs, Growth and Long-Term Prosperity Act. The new market monitoring program will include focused analysis on the functioning of energy markets and the ability to meet domestic energy needs; enhanced coverage of the changing North American energy landscape; and innovative and engaging delivery to targeted audiences. Lastly, the NEB continued to redesign its energy information web pages.

Actual spending for the Energy Information Program was $6.0 million. Actual FTEs totaled 38.1.

Program: Internal Services

Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Material Services; Acquisition Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

Financial Resources - Internal Services Program ($ millions)
Total Budgetary Expenditures
(Main Estimates)
2012-13
Planned Spending
2012-13
Total Authorities
(available for use)
2012-13
Actual Spending
(authorities used)
2012-13
Difference
2012-13
19.6 20.2 21.7 19.5 -0.7
Human Resources (FTEs) - Internal Services Program
Planned
2012-13
Actual
2012-13
Difference
2012-13
128.3 117.7 -10.7

Performance Analysis and Lessons Learned

Internal Services

This year, the NEB implemented the 2012-15 People Strategy. In 2012-13, priorities focused on:

  • Work-life balance: people have a work-life balance that works for them
  • Engagement: people feel that their input and ideas are heard and issues are addressed
  • Leadership: people have a high degree of confidence in the leadership of the NEB, and understand the reasons for decisions and direction

The People Strategy introduced the Talent Management Framework, which continues to be developed, while maintaining the Emerging Technical Leaders and Emerging Leaders programs at the NEB. The Board also strengthened its integrated planning process to better link financial and human resources allocations to activities and outcomes.

The Regulatory Resourcing Framework continued to support good management practices and focused on employees working directly or indirectly on regulatory matters, including hearing and non-hearing applications, compliance verification activities, regulation work, and energy information program. This year, the NEB measured workload and progress towards its priorities via formal quarterly reports to ensure resources are being used in the most effective way, while maintaining a healthy and productive work environment.

During the year, the Board strengthened its integrated risk management framework such that a Corporate Risk Profile outlining prominent corporate risks was developed and will be updated annually. As well, the NEB’s Integrated Risk Management Policy was created and aims to establish and foster a risk management culture that is integrated with other NEB management practices.

The Board continued to improve the integrated planning process to allow better assessment and understanding of current and future needs of the organization. The integrated business planning process ensured that components of strategic priorities and key corporate risks were reflected throughout planned activities across the organization.

In preparation for the relocation of the NEB’s Calgary offices in 2014, the NEB engaged staff throughout the year, gathering input on design and logistics. The NEB will use a structured approach in managing change to support employees in making a successful transition to their new work space.

Actual spending for the Internal Services Program was $19.5 million. Actual FTEs totaled 117.7.

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