After six months of consultations, the National Energy Board (NEB) Modernization Expert Panel has delivered its long-awaited report.
The results are damning.
“In our consultations we heard of a National Energy Board that has fundamentally lost the confidence of many Canadians,” the five-member panel wrote. “We heard that Canadians have serious concerns that the NEB has been ‘captured’ by the oil and gas industry.”
The 87-page report issued 26 key recommendations to repair the oft-criticized quasi-judicial tribunal, responsible for regulating interprovincial and international oil, gas and electricity projects.
Those include establishing a one-year review process by cabinet to ascertain whether a major project meets “national interest” prior to regulatory review, replacing the NEB with a “Canadian Energy Transmission Commission” and placing a broader focus on interprovincial transmission lines and renewable energy.
In addition, the panel recommended the government create a new agency responsible for collecting information about energy, relocate board headquarters back to Ottawa, considerably improve consultation with Indigenous peoples including an Indigenous Major Projects Office and extend the timelines for review of major projects (which were accelerated under the previous Conservative government).
“It’s clear that this is a pretty major confirmation of what we’ve been saying for years,” says Adam Scott of Oil Change International in an interview with DeSmog Canada.
“It’s basically saying that the National Energy Board as it stands today is a broken and outdated institution that’s not fulfilling its role, and not serving the best interest of Canadians. It was very good at the very beginning to see that acknowledgment: there’s a problem here, and we really need to do something bold to rebuild what the NEB is and figure this out.”
— DeSmog Canada (@DeSmogCanada) May 16, 2017
Recommendations Include Prioritizing Renewables, Transmission Lines and Independent Information
According to Natural Resources Canada, the panel travelled to 10 cities, heard presentations from almost 200 people and received another 200 written submissions online.
Dan Woynillowicz, policy director at Clean Energy Canada, says in an interview with DeSmog Canada the recommendation to focus more on interprovincial transmission lines and renewables is “very consistent with the direction that the Pan-Canadian Framework on Climate and Clean Growth sets for the country.”
“As acknowledged in the report, so much of the focus and conflict right now has been around pipelines,” he says.
“But in making recommendations for how to approach this regulatory decision-making in the future, they need to make sure that expertise is being brought in on the electricity side [to address] the interprovincial nature of that.”
The creation of a proposed Canadian Energy Information Agency will also assist with this task, he says.
The NEB’s current “Energy Futures” projections are “always very conservative when it came to renewable energy” and largely disconnected with climate policies that have been put in place on both provincial and federal levels.
As the panelists wrote: “We heard over and over in public consultations in all the regions of Canada that the NEB appears to be operating in a national policy vacuum.”
Critics Flag ‘National Interest Designation’ As Giving Cabinet Too Much Say
However, experts have already voiced serious concern about the recommendation that federal cabinet have the ability to designate “national interest” for major projects.
In a statement, Erin Flanagan of the Pembina Institute noted: “The recommendation that the Government of Canada make up-front recommendations on the extent to which proposed projects align with national policy objectives lacks any discussion of trade-off rules or other guidance to ensure this process is not arbitrary.”
Similarly, Anna Johnston of West Coast Environmental Law said in a statement: “The NEB Panel’s recommendation for determining ‘national interest’ is putting the cart before the horse. How can you determine whether or not a project aligns with policy objectives, respects Indigenous rights or carries unacceptable risks before a full impact assessment is conducted?”
Indeed, it’s unclear how cabinet would adequately assess national interest before an environmental assessment is even conducted.
Patrick DeRochie, climate and energy program manager at Environmental Defence, says in an interview with DeSmog that there needs to be more clarification about how the NEB modernization would intersect with the proposed changes to Canada’s environmental assessment process, including issues like “net contribution to sustainability.”
“This national interest determination doesn’t actually spell out how we get to that, or why a project would be rejected within that process,” DeRochie says.
Flanagan also noted in her statement that Pembina is “disappointed” with the recommendation that environmental assessments of energy transmission projects (and energy transmission project alone) be conducted in collaboration between the proposed Canadian Energy Transmission Commission and Canadian Environmental Assessment Agency, as opposed to just the latter.
“Many experts agree that consistent application of [environmental assessment] law can only be achieved if all projects are reviewed under one set of rules, applied consistently,” she wrote.
Natural Resource Minister Suggests Government Won’t Adopt All Recommendations
Next up is a 30-day window for public comment on the report, closing on June 14, 2017.
Jim Carr, minister of natural resources, told reporters in Ottawa on Monday: “Now the government will ask Canadians what they think, and with other reviews that are happening now, come the fall, we’ll meet together as a government and determine the modernization of the National Energy Board and environmental assessment in Canada.”
In addition, he implied the government wouldn’t be accepting all 26 recommendations, telling the National Observer: “That means that we wouldn’t have any tough decisions to make, and I can tell you, we will have tough decisions to make.”
Woynillowicz adds that transmission projects that allow for more renewable energy and emissions reductions are still at risk of being held up because of an insufficient regulatory process, and that having these recommendations adopted will increase the likelihood that they’ll get built.
“I think it’s really positive that this review has happened,” he concludes. “Hopefully Minister Carr and the federal government will pay heed to these recommendations and move quite quickly to adopt them.”