The National Energy Board (the NEB or the Board) is an independent federal regulatory agency that was established in 1959. The Board regulates the following specific aspects of the energy industry:
Other responsibilities include:
In addition to its responsibilities under the National Energy Board Act (NEB Act), the Board also has responsibilities under the Canada Oil and Gas Operations Act, the Canadian Environmental Assessment Act, the Northern Pipeline Act, and certain Provisions of the Canada Petroleum Resources Act. As a result of the Canada Transportation Act, which came into effect on 1 July 1996, the Board's jurisdiction has been broadened to also include pipelines that transport commodities other than oil or natural gas.
The Board's corporate purpose is to regulate pipelines, energy development and trade in the Canadian public interest. This principle guides the Board in carrying out and interpreting its regulatory responsibilities. The Board is accountable to Parliament, to which it reports, through the Minister of Natural Resources.
The Board deals with approximately 750 applications annually. For major applications, the Board holds public hearings where applicants and interested parties can participate. These hearings can be either written or oral proceedings and are usually held at locations across Canada where there is a particular interest in the application and which will be most affected by the Board's decision. Normally, a panel consisting of three Board Members is assigned to hear applications.
The Board operates as a court of record, very similar to a civil court. Its powers include the swearing in and examination of witnesses and the taking of evidence. Before a hearing, individuals, interest groups, companies and other organizations are given an opportunity to register as intervenors or interested parties and in this way actively participate in the process.
Under the NEB Act, up to nine Board Members may be appointed by the Governor in Council. A Member is appointed initially for a seven-year term. Reappointment may be for seven years or less until the age of seventy. In addition, up to six temporary Board Members may also be appointed subject to terms and conditions set out by the Governor in Council. Members typically have a wide range of government and energy industry experience.
The Governor in Council designates the Chairman and Vice-Chairman of the Board from among the Members. The Chairman is the chief executive officer.
Members are assisted by approximately 400 employees who possess the diverse skills required to support the work of the Board. Employees may be financial analysts, computer specialists, economists, engineers, environmentalists, geologists, geophysicists, communications specialists, lawyers, human resource and library specialists or administrative staff.
In the early post-war years, western Canadian oil and gas resources were discovered and developed for interprovincial and international use. Important policy issues arose regarding the conditions for the construction of new pipelines and the approval of long-term exports, particularly of natural gas.
The 1957 government of Prime Minister Diefenbaker set up a Royal Commission on Energy to examine whether a national energy board should be created and what authority it should exercise. The Commission in 1959 recommended that a national energy board be established. Prior to the tabling of its report, the 1955 Royal Commission on Canada's Economic Prospects had also recommended that a national energy authority be created to regulate energy exports.
The government acted promptly on the Commission's recommendations, drafting a legislative proposal and introducing it to Parliament in May 1959. As a result, the National Energy Board Act was proclaimed in November of the same year. The Act transferred to the new Board responsibility for pipelines from the Board of Transport Commissioners and responsibility for oil, gas and electricity exports from the Minister of Trade and Commerce. In addition, it granted the Board responsibility for regulating tolls and tariffs and defined its jurisdiction and status as an independent court of record, an important new factor.
Since then, the Board has developed its expertise on energy matters and enjoys a respected national and international reputation. In 1991, the Board relocated from Ottawa, Ontario to Calgary, Alberta. In 1994, legislative amendments expanded the Board's jurisdiction to include decision making authority for Frontier lands not administered through provincial/federal management agreements.
The NEB co-operates with other agencies to reduce regulatory overlap and provide more efficient regulatory services.
Alberta Energy Resources (AER)
The NEB has a Memorandum of Understanding (MOU) with the AER, formerly known as the Alberta Energy and Utilities Board (AEUB), on Pipeline Incident Response. The agreement provides for mutual assistance and a faster and more effective response by both boards to pipeline incidents in Alberta.
The NEB and the AER maintained their commitment to using the common reserves database for oil and gas reserves in Alberta. Both boards are committed to developing more efficient methods for maintaining estimates of reserves and to exploring other opportunities for co-operation. Currently the Boards are working on a new assessment of gas resources in Alberta.
British Columbia Ministry of Energy and Mines (BCMEM)
The NEB and BCMEM maintained their commitment to using a common reserves database for oil and gas reserves in British Columbia. Both boards are committed to developing more efficient methods for maintaining estimates of reserves and to exploring other opportunities for co-operation.
Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) and
Canada-Nova Scotia Offshore Petroleum Board (C-NSOPB)
The Chairs of the NEB, the C-NLOPB and the C-NSOPB, together with executives from the Newfoundland, Labrador and Nova Scotia Departments of Energy and NRCan, form the Oil and Gas Administrators Advisory Council (OGAAC). The OGAAC membership discusses and decides on horizontal issues affecting their respective organizations to ensure convergence and collaboration on oil and gas exploration and production issues across Canada. The NEB, C-NLOPB and C-NSOPB staff also work together to review, update and amend regulations and guidelines affecting oil and gas activities on what are know as Accord Lands. These are offshore areas for which Accords have been signed with the Government of Canada regarding petroleum resources management and revenue sharing.
NEB staff also provides technical expertise to NRCan, C-NOLPB and C-NSOPB on technical matters of mutual interest, such as reservoir assessment, occupational safety and health, diving, drilling and production activities.
Canadian Association of Members of Public Utility Tribunal (CAMPUT)
CAMPUT is a non-profit organization of federal, provincial and territorial boards and commissions which are responsible for the regulation of the electric, water, gas and pipeline utilities in Canada. Members sit on the executive committee of the association, promoting the education and training of members and staff of public utility tribunals. The NEB also provides staff support to CAMPUT in the form of information provision and assistance in conference organization. During 2003, the NEB co-hosted the annual CAMPUT conference with the EUB. The conference, held in Banff, Alberta, was themed Markets in Transition - The Changing Face of Regulation.
Visit CAMPUT Web site.
Human Resources and Social Development Canada (HRSDC)
The NEB has an MOU with HRSDC to administer the Canada Labour Code for NEB-regulated facilities and activities and to co-ordinate these safety responsibilities under the COGO Act and the NEB Act.
Mackenzie Valley Environmental Impact Review Board (MVEIRB)
In late 2000, the NEB and the MVEIRB signed a joint MOU to establish a co-operative framework for environmental impact assessment in the Mackenzie Valley. In the case of transboundary pipeline projects, the NEB has responsibilities under both the Mackenzie Valley Resource Management Act and the CEA Act. This MOU facilitates the co-operation of two boards to reduce duplication and increase effectiveness of the environmental review process.
National Association of Regulatory Utility Commissioners (NARUC)
Board Members regularly participate in meetings of the U.S. NARUC, particularly with respect to developments in U.S. gas markets that may affect cross-border trade in natural gas.
Natural Resources Canada (NRCan)
In 1996, the NEB signed an MOU with NRCan to reduce duplication and increase co-operation between the agencies. This MOU covers items such as data collection, the enhancement of energy models and special studies. The MOU was renewed in January 2000.
Northern Pipeline Agency (NPA)
The NEB provides technical and administrative assistance to the NPA, which, under the Northern Pipeline Act, has primary responsibility for overseeing the planning and construction of the Canadian portion of the Alaska
Pipeline Technical Regulatory Authorities of Canada Council (PTRACC)
The NEB chairs a staff committee of federal and provincial technical regulators. PTRACC meets regularly throughout the year to discuss pipeline safety and environmental initiatives.
Transportation Safety Board of Canada (TSB)
While the NEB has exclusive responsibility for regulating the safety of oil and gas pipelines under federal jurisdiction, it shares the responsibility for investigating pipeline incidents with the TSB. The roles and responsibilities of each body with regard to pipeline accident investigations are outlined in a MOU between the two boards.
Yukon Territory Department of Economic Development (YDED)
The NEB continues to work with Yukon officials to facilitate the transfer of oil and gas regulatory responsibilities in accordance with the Yukon Accord Implementation Agreement. The Board provides expert technical advice to the YDED.
Cooperation with Other Countries
The Board regularly meets with policy advisors and regulatory authorities from a wide range of countries who are seeking advice on good regulatory practices. In the past few years, the Board has met with representatives from Argentina, Australia, Brazil, China, Columbia, France, India, Japan, Peru, Russia, the Ukraine and the United Kingdom. In addition, the Board has met with the International Energy Agency and has participated in World Bank seminars on good regulatory practices.
Comisión Reguladora de Energía (CRE) of Mexico and
U.S. Federal Energy Regulatory Commission (FERC)
In September 2003, a trilateral agreement was signed between the NEB, CRE and FERC in which the three agencies agreed to regularly share perspectives on regulatory approaches and to work on eliminating inconsistencies in regulation to the extent possible. The NEB, CRE and FERC have been meeting three times a year to pursue these objectives.
It was at the trilateral meeting, in May 2004, that the NEB and FERC signed a Memorandum of Understanding to enhance interagency coordination. This agreement reinforces the existing cooperative relationship and further commits each agency to work together to the extent possible within our respective legal mandates to harmonize our regulatory approaches to cross-border projects.