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Home > Speeches and Presentations > Speeches and Presentations 2005 > References to Climate Change Issues and Canada's Commitment to the Kyoto Protocol in National Energy Board Regulatory Decisions, 1994-2005

References to Climate Change Issues and Canada's Commitment to the Kyoto Protocol in National Energy Board Regulatory Decisions, 1994-2005

Robert Steedman
Chief Environment Officer
National Energy Board

Presentation to the
Standing Committee on Environment and Sustainable Development

24 February 2005

Thank you for this opportunity to outline some of the ways that greenhouse gas (GHG) emissions, climate change, and Canada's commitment to the Kyoto Protocol have been referenced in recent decisions and publications of the National Energy Board (NEB). French and English versions of my speaking notes have been distributed to the Committee. When it's time for questions, it will be best if I respond in English.

The NEB engages the issue of climate change through a variety of mechanisms. Perhaps most important is the evidence and opinion presented by participants in project-specific public regulatory hearings. Engagement also occurs through public consultation related to our corporate strategic planning, analyses of Canadian energy supply and demand, or other topics. NEB personnel also actively track science, policy, and legislation related to climate change issues.

My key message today is that over the last decade, NEB public hearings and regulatory decisions have reflected changes in public awareness, government guidance, and industrial action related to climate change issues. Because the NEB convenes public hearings on large or contentious energy infrastructure applications, our regulatory process can become a focal point for public concern about a range of energy issues. These issues have included policy, technology and regulatory jurisdiction related to oil and gas production, pipelines, energy use, GHG management, and global climate change.

I will touch on six themes that emerge from the NEB's engagement of climate change in the context of federally-regulated energy infrastructure. These are:

  • NEB jurisdiction over global-scale climate change;
  • NEB jurisdiction over end-use combustion of fuels transported by federally-regulated pipelines;
  • regional, national, and global significance of local GHG emissions;
  • reporting of project-specific GHG emissions;
  • mitigation of project-specific GHG emissions;
  • interpretation of Canada's Climate Change Plan.

Before proceeding further, I should provide a very brief overview of the role and mandate of the National Energy Board, because these are central to the scope of the issues I will be describing.

The NEB is an independent quasi-judicial tribunal established through the National Energy Board Act in 1959. The NEB's corporate purpose is to promote safety, environmental protection and economic efficiency in the Canadian public interest, within the mandate set by Parliament, in the regulation of pipelines, energy development and trade.

The NEB regulates:

  • the construction and operation of interprovincial and international pipelines;
  • pipeline traffic, tolls and tariffs;
  • the construction and operation of international and designated interprovincial power lines;
  • the export and import of natural gas;
  • the export of oil and electricity; and
  • frontier oil and gas activities.

The NEB also:

  • provides energy advice to the Minister of Natural Resources in areas where the Board has expertise derived from its regulatory functions;
  • conducts studies into specific energy matters as requested by the Minister;
  • holds public inquiries when appropriate; and
  • monitors and reports on current and future supplies of Canada's major energy commodities.

The NEB takes the public interest of Canadians into account when it makes decisions. The public interest is inclusive of all Canadians and refers to a balance of economic, environmental and social interests. As illustrated by today's topic of discussion, the public interest changes as society's values and preferences evolve over time.

Regulatory decisions made by the NEB must respect the laws of Canada. In reaching a decision, the NEB also considers relevant policies and guidance of government agencies, in addition to all other evidence placed on the record. The NEB does not make policy, but as an independent source of information about energy, may be of service to policy makers.

I will now provide some examples of climate change issues that have found expression in recent NEB decisions and publications. These examples address the six themes I mentioned a few minutes ago.

Please note that NEB Reasons for Decision "speak for themselves" as complete documents. The excerpts and interpretation provided below are intended to illustrate specific points relevant to today's discussion, and cannot be taken as statements of policy or regulatory precedent.

A 1994 NEB decision, perhaps the first including reference to climate change, involved the ability of the NEB to consider global-scale environmental effects of GHG emissions:

"...the question of the jurisdiction of the Board to consider the environmental effects on the global commons of the end-use of the gas in the United States, must be answered in the negative." (GH-3-94 "Applications to export natural gas", 1994)

A 2003 decision found that the end use of natural gas was not relevant to the NEB context, and would not be considered under the Canadian Environmental Assessment Act unless scoped into the project:

"The Board... determined that the end use of gas is not relevant to its decision under the NEB Act. Further, the Board clarified that, in order to consider environmental effects related to the end use of the gas under CEAA, facilities or undertakings related to the end use of the gas must be part of the project, as scoped." (GH-1-2002 "Westcoast Energy Inc. Southern Mainline Expansion", 2003)

The next two examples both describe a comparative approach, in the absence of quantitative criteria, to assess the significance of GHG emissions from a pipeline project:

"Calculations of GHGs arising from project facilities constitute a negligible proportion of Alberta's and Canada's annual emissions. The Panel finds that it has sufficient information to determine that such emissions would be insignificant and that there would be no significant adverse effects associated with GHG emissions from the Project." (OH-1-95 "Express Pipeline Ltd.", 1996),

and

"The Panel notes that, at the present time, there are no defined criteria to measure significance in relation to GHG when considered in an environmental assessment. However, comparisons to provincial or national emissions levels can provide a useful context for evaluating projects." (GH-4-2001 "Georgia Strait Crossing Pipeline Ltd.", 2003)

The NEB has required applicants to participate in GHG reporting registries, and has noted voluntary GHG mitigation through fuel substitution. For example:

"The Company shall submit to the Board and Environment Canada, as soon as available, a copy of the Company's action plan under the federal Voluntary Challenge and Registry Program to deal with greenhouse gas emissions arising directly from the operation of the pipeline." (GH-3-97 "Alliance Pipeline Ltd.", 1998),

and

"The majority of the Panel notes BC Hydro's commitment to offset 50 per cent of the increase in GHG emissions... in the period through 2010... Given that this is a voluntary commitment, and that there are no legally binding federal or provincial regulations or targets for GHG, the majority of the Panel has relied upon this commitment and considers this to be a positive step toward addressing GHG emissions..." (GH-4-2001 "Georgia Strait Crossing Pipeline Ltd.", 2003)

The NEB has recognized the national and global importance of climate change, and noted that emissions from new natural gas energy projects had already been considered in Canada's climate change outlook:

"Regarding GHG, the Panel considers climate change an important Canadian and global issue and recognizes the Government of Canada's effort in this regard by the ratification of the Kyoto Protocol and the development of the Climate Change Plan for Canada... the Panel relies on Environment Canada's statement that GHG emissions resulting from new natural gas pipeline projects and energy generation projects... have been factored into the Government of Canada's outlook, and therefore should not compromise Canada's ability to reach its Kyoto Protocol target." (GH-4-2001 "Georgia Strait Crossing Pipeline Ltd.", 2003)

In an Energy Market Analysis looking at "Canada's Energy Future", the NEB found that it was not able to incorporate Canada's Climate Change Plan into quantitative supply and demand scenarios:

"In November 2002, the Government of Canada released a plan to address Canada's commitment to the Kyoto Protocol. However, additional elements of implementation would be required in order for the Protocol to be incorporated in the scenario analysis. Therefore, the Protocol was not considered in either scenario." (Canada's Energy Future: Scenarios for Supply and Demand to 2025, 2003)

In summary, GHG emissions, climate change, and Canada's commitment to the Kyoto Protocol have had high profile in recent NEB hearings and energy market analyses. However, the NEB has found that it does not have jurisdiction over global impacts of GHG emissions from pipeline projects. For specific projects, the NEB has required or encouraged reporting of GHG emissions, as well as GHG emission offsets through fuel substitution.

This concludes my prepared remarks. I would be pleased to address questions from the committee.

 

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Date Modified:
2011-10-28