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Home > Speeches and Presentations > Speeches and Presentations 2010 > National Energy Board Presentation to Standing Committee on Aboriginal Affairs and Northern Development - Territorial Economic Development: Barriers and Solutions

National Energy Board Presentation to Standing Committee on Aboriginal Affairs and Northern Development - Territorial Economic Development: Barriers and Solutions

Presented by
Sheila Leggett
Vice-Chair
National Energy Board

National Energy Board Presentation to
Standing Committee on Aboriginal Affairs and Northern Development
Territorial Economic Development: Barriers and Solutions

25 March 2010

Introduction

• Apologies from the Chairman of the NEB for not being able to attend, he is attending to duties associated with the evaluation of the Mackenzie Gas Project application
• Mackenzie Gas Project - in 2004, NEB received a regulatory application for the Mackenzie Gas Project, which includes a 1,220-kilometre natural gas pipeline through Canada's north.
  • Hearing process began in 2005.
  • The report of the joint review panel under the Canadian Environmental Assessment Act was received at the end of December 2009.
  • Cannot comment on the content of this application process, as it is an ongoing proceeding before the Board. I can update you on the remaining process for consideration of this application.
  • NEB oral hearing to resume on 29 March 2010 to deal with updated evidence.
  • NEB panel will hear final argument beginning mid-April.
  • NEB expects to release its regulatory decision in the fall of this year.

NEB Mandate and Role

• Independent federal agency that regulates several aspects of Canada's energy industry.
• Purpose: promote safety and security, environmental protection and efficient energy infrastructure and markets in the Canadian public interest within the mandate set by Parliament in the regulation of pipelines, energy development and trade.
• Of particular note for this Committee would be that the NEB regulates:
  • construction and operation of pipelines that cross international or provincial borders, tolls and tariffs on these pipelines;
  • all oil and gas exploration and production on non-accord frontier lands, i.e. in the Northwest Territories and Nunavut, and certain offshore areas amongst other aspects of the mandate set by Parliament;
  • international power lines and designated interprovincial power lines;
  • natural gas imports and exports, oil and natural gas liquid exports, electricity exports.
• NEB provides Canadians with information about Canadian energy markets.
• NEB reports to Parliament through the Minister of Natural Resources.
• Has regulatory responsibilities under the NEB Act, Canada Oil and Gas Operations Act (COGOA) and Canada Petroleum Resources Act (CPRA), related to environmental protection, safety, and conservation of the resource.
• The NEB also has responsibility to conduct environmental assessments under the Canadian Environmental Assessment Act, and under the Mackenzie Valley Resource Management Act.
  • The NEB has been considering the environment in its decisions since its inception in 1959 and under the Canadian Environmental Assessment Act since 1995. The NEB has developed a strong capability with respect to environmental assessment, with about 45 environment, socio-economic and stakeholder engagement specialists on staff. Currently, the NEB conducts about 20-30 screening and comprehensive study type assessments per year.
• NEB is active and effective in Canada's pursuit of a sustainable energy future- this requires us to consider the economic, social and environmental aspects of all facilities applications when we make a decision about whether the proposed project is in the public interest.
• The Board believes in a "goal-oriented" approach, where regulatory expectations are clear and companies determine the means to achieve the objectives. Recently, the regulations for drilling and production under COGOA were updated to reflect this regulatory best practice.
• The Board also believes in regulatory accountability and has committed to service standards for all of its applications processes.
• The Board believes that regulatory processes should result in better outcomes such as the best evidence possible from a broad base of parties when an application is being considered and better environmental protection throughout the lifecycle of all approved projects. The Board does not believe that process for the sake of process adds value to Canadian society.

Significant assessments in the North

• MGP (noted above)
• Preparation for exploration drilling in the Beaufort Sea in the 2013 to 2017 time frame
  • Same Season Relief Well Capability Review
    • Currently reviewing the NEB's policy on same season relief well capability for oil and gas drilling operations in the Beaufort Sea. Part of this review will include a technical conference in Inuvik. The policy, as decided by the Board, would guide applicants on the Board's expectations regarding capabilities that an applicant would need to demonstrate in the event a well goes out of control.
  • Demonstrating preparedness in the event of a spill from oil and gas regulated activities
    • As part of the Government of Canada's commitment to the Inuvialuit under the Inuvialuit Final Agreement, the NEB is working with a number of government departments, the Inuvialuit, and the regulated companies to demonstrate preparedness in the unlikely event of a spill from regulated oil and gas activities through proper protocol, procedure, and spill response exercises.
• Northern Marine Geophysical (seismic) Programs
  • A number of companies are planning to conduct marine programs in the Beaufort Sea, Lancaster Sound, Baffin Bay, and Davis Strait. Of particular note is the pioneering efforts to conduct marine seismic programs in ice covered waters, and anticipated seismic programs in the 'wedge' (the offshore area north of the coast at the Alaska-Yukon border at 141 degrees West longitude).
• Alaska gas pipeline
  • The NEB anticipates dealing with an Alaska gas pipeline proposal in the future, either as an application to the NEB for the proposed Denali Alaska Gas Pipeline (partnership of ConocoPhillips and BP) or in a support role to the Northern Pipeline Agency in the case of a proposal for an Alaska Gas Pipeline by TransCanada Corp. and ExxonMobil. NEB will be ready for any application that is submitted. NEB will align and coordinate any processes necessary should the Northern Pipeline Agency be involved.

Barriers

• The Canada Oil and Gas Operations Act (COGOA) and Canada Petroleum Resources Act (CPRA) were designed in a different era of oil and gas development, for large-scale offshore projects (e.g., Hibernia) and are not well-suited for the increasing variety of, and often smaller-scale, projects now contemplated for the North.
  • NEB is responsible for the oil and gas development components of these Acts; however, the Acts themselves are administered by INAC.
  • Within the existing regulatory framework, the SSRW capability review is an example of using an inquiry-type approach where the NEB is setting the regulatory direction.
• Shared mandates by various assessment and regulatory bodies in the North result in regulatory complexity and uncertainty for potential investors.

Solutions - Current

• We are working together with Northerners to find holistic solutions to Northern energy matters.
  • Active participation in the Northwest Territories Board Forum:
    • This group of regulators are developing strategies to achieve regulatory efficiencies without compromising effectiveness or jurisdiction;
    • Strong working relationship between board chairs, their executive directors, and staff.
  • This work has resulted in the development of partnerships, formalized in MOUs, to align and coordinate processes (e.g.,  existing MOU with Mackenzie Valley Environmental Impact Review Board on a cooperative framework, existing MOU with the Northwest Territories Water Board on cooperation with respect to down-hole injection), and others are being developed (e.g., with the Environmental Impact Screening Committee, the Environmental Impact Review Board, and INAC).
• Learning from Northerners, we have modified our hearing processes in both northern and southern Canada to increase the ability of Aboriginal groups and stakeholders to participate.
  • NEB is involved in a large number of ongoing cross-jurisdictional activities in the North related to regulatory development, emergency preparedness, establishment of seismic operating guidelines, environmental management, land use planning, aboriginal engagement, energy research, and public safety and transportation.
• The NEB is striving, in close collaboration with Northern Boards, Aboriginal groups and stakeholders, to develop environmental and socio-economic assessment and regulatory processes in the North that are:
  • responsive to the aspirations of Northerners for a sustainable future;
  • clear, well understood, and have predictable timelines, and;
  • coordinated and minimize duplication.
    • Chair is involved in the MPMO committees that are looking at ways to improve the overall regulatory regime.
    • NEB supports a whole of government approach.
    • NEB supports the establishment of a Northern Projects Management Office.
    • The NEB is continuously looking at ways to streamline its processes and is developing an online data management system for well drilling and production data gathered under the COGOA and CPRA.

Solutions - Future

• Modernize COGOA and CPRA
  • Allow for participant funding programs to be developed, creating the possibility of substitution under the Canadian Environmental Assessment Act (This approach was recently announced in the budget speech for projects regulated under the NEB Act.

 

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Date Modified:

2011-10-28