Vancouver, British Columbia, Monday, April 27, 2015

Speech by Peter Watson, Chair & CEO of the National Energy Board to the Vancouver Board of Trade

Check against delivery

Introduction

Thank you for that kind introduction.

I would like to thank you all for coming here today.

And I would like to thank the Vancouver Board of Trade for inviting me to speak with you today.

I have been looking forward to my visit to your province for quite some time.

As you may know, the NEB has 13 temporary and permanent Board Members, and two of them are from right here in BC – they are David Hamilton and Bob Vergette.
They have both served the NEB well and they both have had a big influence on me in my short time as Chair of the Board.

I am also very pleased that another of our Board Members, Dr. Ron Wallace, is here with me during my meetings in British Columbia.

Over the past four months I have been speaking about pipeline safety and environmental protection across Canada as part of an NEB National Engagement Initiative.

This is a first for our organization – a first in our 57 year history – where we are on a comprehensive nation-wide engagement initiative to introduce ourselves and discuss what we do and how we can better address Canadians’ concerns about pipeline safety.

BC is the sixth province we have been to on the tour.

And so far we have had about 50 meetings with Mayors and municipal officials, Environmental Groups, and Aboriginal groups… among others.

And I want to speak about pipeline safety and environmental protection today… because if there’s a province that has had a lively dialogue about those issues – it’s BC.

And if you saw the news last Friday, you would have seen an especially lively dialogue between me, the Coast Guard and the Metro Vancouver Mayors on those very issues.

And the reason I want to speak about these issues today is because the issues surrounding pipeline projects such as the Trans Mountain Expansion, Northern Gateway, Energy East, and Keystone XL have become some of the defining public issues of the day in our country.

And I believe that it is important that the NEB engages you on the important energy issues we all face as Canadians.

In the Eye of the Storm

So, the topic I have chosen to speak about today is:

“IN THE EYE OF THE STORM” – Pipelines and the National Energy Board”

Over the past few years, the National Energy Board has found itself in unfamiliar territory…

on the front page of newspapers across Canada.

And the demands on us seem to hit all of the major energy issues in twenty-first century Canada;

to lead the climate change debate,
to increase market access for Canada’s energy,
to allow more people to participate in our process,
to cut red tape,
to go faster,
to go slower,
to ensure that pipelines never fail,
and to answer to all the voices in the debate and to remain neutral through it all.

It is a unique place for the National Energy Board, because for decades, Canada’s national energy regulator had a very low profile.

The NEB quietly processed applications. The public and media paid little attention.

But in recent years, things changed.

In 2006, the NEB had 8 interveners at a Trans Mountain pipeline hearing for a project that went through a National Park.

Today, there are 400 interveners at the NEB’s hearing into the Kinder Morgan Trans Mountain Expansion project.

For some, the game changer was the 2010 BP Horizon blowout where millions of barrels of oil spilled into the Gulf of Mexico.

For others, it was the Enbridge pipeline rupture in Kalamazoo, Michigan later that year.

And when the Northern Gateway Joint Review Panel completed its work in 2013, it had reviewed feedback from 1,450 participants and received 9,500 letters of comment.

Two Questions

The energy debate in Canada is complicated; it provokes strong and often polarized opinions.

And the NEB often finds itself as a central figure in the stories spun out into the public arena.

So today, I want to examine two questions, and discuss how the NEB came to be in the ‘eye of the storm.’

The first question is – what is the NEB?  What is our job?
And second, why does the NEB find itself in the eye of the storm and what are we doing about it?
1. What is the NEB?

So first, let me tell you about the National Energy Board.

The NEB is a quasi-judicial, independent body created by Parliament in 1959.

We regulate interprovincial and international pipelines, energy development and trade in the Canadian public interest.

We are accountable to Canadians through Parliament – and we function at arm’s-length from Government.

Today, the NEB regulates about 73,000 km of international and interprovincial pipelines and about 1,400 km of international power lines.

Staff

I have only been the Chair of the NEB for about 8 months, but when I walked in the door of the NEB, what I found was a very capable, competent and committed organization.

The NEB has about 450 staff.

Including engineers, inspectors, engagement staff, and environmental specialists, among many others.

So what is the overall character of those 450 staff?

First, they care. They feel personally responsible for helping to ensure the safety of energy infrastructure for communities, for Aboriginal peoples, as well as private landowners.

Their work in the community starts even before an application for a pipeline is made,  and they oversee safety for the full lifecycle of a pipeline – from concept, to its construction and operation, and then to its eventual safe abandonment.

They also have tremendous expertise. Many at the NEB are among the most knowledgeable professionals in the pipeline and regulatory business.

They also have the dedication and capacity to deliver.

Last year, they carried out over 350 compliance actions – ranging from inspections to audits to emergency exercises – and every day they work diligently to strengthen all aspects of our pipeline oversight.

No matter what action we take, the goals are always the same – keep pipelines safe and protect the public and the environment.

2. Why in the Eye of the Storm? What Are We Doing About It?

So, why does the NEB find itself in the eye of the storm, and what are we doing about it?

Climate Change

First, energy and environmental issues are more interconnected than ever before.

Climate change and the debate around forms of energy that power our economy are global and systemic issues that people are passionate about.

The big question being, why doesn’t the NEB take into account greenhouse gas emissions from the oil sands when it holds hearings for pipelines that propose to carry oil sands crude?

Let me be clear – we at the NEB care about climate change.

When we carry out pipeline reviews, we examine the emissions that would emit directly from the construction and operation of that pipeline.

But as you would expect, those emissions are small.

Let me also be clear that the NEB does NOT have the authority to regulate the emissions that occur when the crude oil is being extracted upstream of the pipeline,

that authority rests with provincial regulators.

And we do NOT have the authority to regulate the emissions that would occur when the oil in an NEB regulated pipeline is burned to power a manufacturing plant or a car,

that authority also rests with other regulators.

At the NEB, we do our job. And Parliament has clearly mandated what our job is.

Delivering Fair, Transparent Hearings

Second. People are also questioning our hearing process and whether it is fair and open enough to Canadians.

Quite simply, NEB hearings are like a court of law.

And each independent NEB hearing panel has the tough job of deciding what is relevant to the application before them.

We are also subject to a 15 month legislated time period, during which we need to:

run a fair process,
assess what is relevant,
undertake a comprehensive environmental assessment,
and then prepare reasons for our rulings.

And in those 15 months, we need to hear from people who are directly affected by the specific proposed project, as well as from those who have relevant information and expertise related to that project.

Meeting the time limit is achievable, and has been regularly achieved in the past. However, it requires rigour in our process and in our actions.

If a panel does not require oral cross examination to test the quality of evidence, then they make the call not to do so.

Like any tribunal, the NEB has lots of experience with some witnesses grandstanding and bringing forward issues that are not relevant to the hearings (that applies to both applicants and intervenors).

With an extraordinary large number of active intervenors, we need to be efficient and fair to all of the voices needing to be heard.

So, we have a difficult job to do… managing all the demands in our hearing processes… many of them relevant and focused – and some of them not.

And let me be clear, I will not hesitate to seek an extension to the 15 month time limit that is allowed under our legislation… but only when the evidence supports it.

We have a duty to run a fair and transparent process, and if we do not do this, we risk our decisions being challenged and overturned in court.

We take this duty very seriously.

But… We will not lose our focus and let our hearings become a popularity contest or a referendum on issues outside of our mandate.

What’s Important

As I’ve mentioned, I have been on a tour of Canada over the past few months, and what I have heard from people consistently is that safety is their number one concern. People want to hear about what I’m doing, as head of the NEB, to keep them safe… and what the industry and the companies are doing to keep them safe.  There is nothing more important to them… and that also means there is nothing more important to us.

People consistently raise three things with me…

First, is my water going to be protected?
Second, is my land going to be protected?
And third, are we ready if a major pipeline incident occurs?

That is what I have heard from Mayors across Canada, and that is clearly what I heard last Friday when I met the Metro Vancouver Mayors.

English Bay Spill

And those questions are especially poignant since the recent oil spill in English Bay.

So I’ve asked myself whether the NEB, the pipeline industry, and our regulated companies are ready in the event of a major rupture or spill from a pipeline in BC.

I know that there are good, comprehensive plans in place, and that the plans are exercised and tested to identify areas for improvement.

However, I also understand the need for everyone, all organizations involved in the complex world of emergency management… to never take things for granted… to always be mindful of their role individually… but also how they can support and help others who will need to play a role in unified command during a major incident. An effective response usually depends on many collective efforts.

Lake Wabamun and the 2013 Flood

Ten years ago, when I was the Deputy Minister of Alberta Environment – there was a major train derailment adjacent to Lake Wabamun  just west of Edmonton – and a large amount of Bunker C oil spilled into the Lake.

And I found that there was not a good plan in place. And the response to the derailment was not good enough.  And my department was held accountable by the public because it was an environmental issue, even though we did not regulate the activity, and the plans for this type of incident did not specify a role for my agency beyond providing advice to others during the response and recovery efforts…

Two years ago, when I was the Head of Alberta’s Public Service, the biggest natural disaster in modern Canadian history occurred, the 2013 Alberta flood.

Fortunately, we had learned our lessons and had been very proactive about building our emergency response and recovery capability… There was a very comprehensive response and recovery effort, involving all levels of Government, communities, private industry, and even not-for-profit agencies.

So the lessons I learned from those two disasters was… don’t ever be complacent and assume your plans are good enough… and all parties must be working collectively to build and develop the system’s capacity – our effectiveness depends on our collective efforts.

Unified Response

So God forbid, if we have a major leak in an existing pipeline, every player in the Lower Mainland needs to know what their role is.

And they need to carry out that role as part of a unified response effort.

That is why we at the NEB are very interested in working with the Coast Guard to understand their lessons arising from the recent spill in English Bay.

It is also why we are going to follow-up with all of the key players in BC to ensure we all reflect on these lessons and then more importantly, continue to test and challenge the companies plans for a major pipeline incident response, and review how we will all come together in a coordinated way if that occurs.

That means industry, the NEB, first responders and municipalities.

I am very pleased that Kinder Morgan Canada, as the operator of the existing oil pipeline and terminal in the lower mainland, agrees with me, and will play an active role in these discussions.

Now, I know that this may be controversial, as Kinder Morgan is in the midst of a very contentious application to build a new pipeline through BC.

However, improving emergency response preparation is critical for the existing facilities already in the ground. It does not prejudge what might happen on their application.

I do not believe we have a choice on this matter. We need to help ensure that everybody involved in an emergency response for a leak in an existing pipeline knows what their role is – and how to deliver on that role, when something serious happens.

Some may believe that this is not a good time to move forward with this initiative because relations between the NEB and local municipalities are not good.

Even if that were true. It doesn’t matter.

As I mentioned before, when I met with the Metro Vancouver Mayors last week, we had an open and frank discussion on the role of the NEB.

But what was very clear in that discussion was that we all care deeply about what would happen if a leak occurred in a pipeline in the Lower Mainland.

So we will continue to do our job… to test and challenge the plans that are in place to ensure they are robust enough … and to continue to engage and support all the players who will need to work together if a major incident happens.

This work and outreach will be coordinated by the NEB’s new regional office in Vancouver.

And it will be a top priority for our new Chief Safety Officer Keith Landra, who is joining us from the Canada/Nova Scotia Offshore Petroleum Board.
Lifecycle Pipeline Regulation

One of the other significant things I have learned talking to people from across Canada is that our regulatory processes aren’t OBVIOUS to everyone out there.

When and how they may or may not get a chance to engage with the NEB about a project is not always clear to everyone.

Some  worry that if they don’t weigh in on a project at the point of application they have to “forever hold their peace”, so to speak – hence the hundreds and hundreds of applications to participate on major projects.

Not everyone understands what we mean when we say that the NEB is there through every part of the construction and operation of a project.

Often people don’t realize that they can, at any time, engage with the regulator, and ask questions about existing pipelines in their community.

Regulators must become a life-cycle partner with communities.

By a life-cycle partner, I mean we need to share more information not just on how we get to a facility approval (or denial), but also, if an approval is granted, the conditions we impose for construction and operation, and how we plan to hold companies accountable to every single one of the conditions.

We also need to be open to discussing things like emergency response plans with the very people who will be on the ground in the case of an emergency, or impacted by an emergency.

Not only to give them some comfort that there are robust emergency response plans, but in the case of local agencies, to tap THEIR knowledge of the area, and how these things affect emergency response.
Consultation on Emergency Management Information

And during my discussions with Mayors across Canada, I have found that nearly all of them have major concerns about what they see as a lack of transparency regarding emergency management information from pipeline companies the NEB regulates.

And to tell you the truth, I haven’t been happy with the amount of emergency response information that pipeline companies or the NEB has been sharing with the public.

In fact, I recently wrote to Canada’s Pipeline Association requesting that they review this issue with their member companies, asking them to do more towards publicly sharing emergency response information.

Because effective and transparent emergency response planning is an important part of keeping Canadians safe and the environment protected.

Now depending on whom you talk to, company emergency management information should be kept confidential – or it should be made widely available to the public.

So in the spirit of openness and transparency – I have decided that the NEB needs to open up this important discussion to all Canadians.

And I am very pleased to announce that the National Energy Board is launching a public consultation starting today to solicit the views of Canadians on the level of detail in company emergency management information that they would like to see.

Canadians deserve to be consulted on the transparency of emergency management information for NEB regulated pipelines. There may indeed be some specific information that should be kept confidential, but I believe that we have been too conservative in our approach to this issue to date. Our consultation needs to revisit this issue and determine what the public needs to know, to have confidence that these plans are comprehensive.

At its conclusion, the NEB will respond in a meaningful and measured way that reflects what we’ve heard and what is in the best interest of all Canadians.

The NEB public consultation will remain open until June 25 and it includes a discussion paper to help Canadians understand the NEB’s role to uphold public safety and environmental protection through emergency procedure information requirements.

If you want to participate, just ‘google’ National Energy Board, and follow the links.

It is my hope that we will get thoughtful responses from municipalities, municipal associations, pipeline companies, ENGOs, Aboriginal organizations, and from individuals that have an opinion about pipeline safety and transparency.

I am also pleased that the consultation will include a review of the guidance developed by the Canadian Energy Pipeline Association regarding their principles for transparency of emergency management information, which I am told will be released later this Spring.

Conclusion

In closing, I have to tell you that the view from the ‘eye of the storm’ is unique.

While controversy and change swirl around us, the centre of the storm has to remain calm.

For the NEB to remain relevant we need to be composed and absolutely committed to listening to Canadians, and to never taking public safety for granted. You have my personal commitment that we will do both.

Thank you.

Source:: http://news.gc.ca/web/article-en.do?nid=972519&tp=970