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NEB Status quo vs. NEB Modernization: Are the oil and pipeline companies and industry-friendly panel controlling the outcome of this review?

(Canadian Energy Pipeline Association’s Chris Bloomer and Sonya Savage take questions from the NEB Modernization Expert Panel in Saint John, New Brunswick on March 21, 2017)

On March 21, 2017, the NEB Modernization Review Expert Panel came to Saint John, New Brunswick to hold their 9th public meeting.  This review was launched by the Government of Canada in an attempt to return public confidence back to the National Energy Board.  What’s at stake is how pipeline review projects like Energy East get decided and whether the NEB should have their mandate changed or expanded. It should be noted that the Expert Panel choose not to include the other 3 Atlantic Provinces in their consultation meetings.

During this first day of formal presentations and informal “dialogue sessions”, a battleground was playing out on how the public notification and public participation of pipeline reviews should be conducted.  Many local community and environmental groups from Saint John were present to call for more fair, inclusive, and open review of pipeline projects.  In contrast, the Canadian Energy Pipeline Association (CEPA) was present to call for the status quo to be maintained.  


And the elephant in the room was conflict of interest. At a previous NEB Modernization hearing held in Gatineau, Quebec (Feb. 23, 2017), Council of Canadians called for the removal of 3 of the 5 panel experts (Brenda Kenny, Gary Merasty, and Hélène Lauzon) because their close ties to the pipeline and oil industry put them in a serious conflict of interest.

Imagine the optics in the room.  We are in Saint John, New Brunswick, 3600 kilometres away from Calgary, and I am listening to Chris Bloomer (President and CEO, CEPA) and Sonya Savage (Senior Director Policy & Regulatory Affairs, CEPA) address the NEB Modernization Expert Panel, one of whom is Dr. Brenda Kenny, the Past President and CEO of CEPA from 2008 to 2016.  Although previous meetings took place out in western and central Canada, the President and a Senior Director from their Calgary office flew across Canada to Saint John, New Brunswick to deliver their message.  

(Opening slide in presentation by Canadian Energy Pipeline Association at Saint John public session of NEB Modernization Expert Panel, March 21, 2017)

It is important to remember where Dr. Brenda Kenny stands on the government oversight of environmental assessment.  Back in a CEPA News Release dated March 29, 2012, in reaction to Stephen Harper’s Omnibus Budget C-38 that gutted the Canadian Environmental Assessment Agency (CEAA), Fisheries Act, and restricted public participation in hearings on pipelines to individuals “directly affected” or deemed to have “relevant information or expertise”, Dr. Brenda Kenny said, “This announcement is very good news for the pipeline industry.  We strongly support this positive move towards a more effective, efficient and timely regulatory process.” 

The following is my day’s scorecard for NEB status quo versus NEB modernization:


“Directly affected” vs. Anyone

Both Chris Bllomer and Sonya Savage of CEPA strongly argued that “The NEB must be an independent, quasi-judicial, expert regulator.”  CEPA calls for the status quo with some minor changes (a total of 55 recommendations).  


David H. Thompson (The Fundy Research and Restoration Group) summed up the status quo of the NEB process, “they practice ‘continual noninclusion'”.   The Saint John groups listed off the many strategies used to disenfranchise the public: NEB does not engage communities about the review process but only offers a very difficult online application process to become an Intervenor; the mass rejection of applicants to participate in the hearings; the mass rejection of applicants to be able to write a letter of comment to the NEB; no panel session in northern New Brunswick and not one meeting in Nova Scotia for Energy East; no real maps available online or provided to affected communities; pipeline companies refuse to hold public meetings because they don’t want to answer questions in public; and pipeline companies have held closed-door meetings with 45 municipalities in New Brunswick.


Lynaya Astephen was critical of TransCanada’s claim that “we have already talked to everyone” to participate in the company’s closed-door, “community liaison” committee.  Ms. Astephen explained, “Two large subdivisions in Red Head were never even contacted to participate.”


Scott Kidd (Conservation Council of New Brunswick) recommended that the Federal Government “put the public into public participation”. “Good environmental assessments promote democracy. Participation cannot be limited to only those who are directly affected.”


Horst Sauertieg (concerned Saint John resident and retired engineer on Saint John pipeline/refinery projects) said, “We need question-and-answering sessions where company representatives can speak on the record to answer questions of that the public wants.” “Emergency plans have to be part of the application.  People have to know how this will play out.”  In reference to the Energy East application, “I have no information on how they will respond to an incident.”

(NEB Modernization Expert Panel members (left to right) are David Besner, Hélène Lauzon, Dr. Brenda Kenny, and Wendy Grant-John as they ask questions to Saint John Mayor Don Darling and Saint John Fire Chief Kevin Clifford during the Saint John public session on March 21, 2017)


NEB review vs. CEAA review

CEPA stressed that the NEB process should remain the same; CEPA maintained that you cannot remove the NEB from the environmental assessment of pipeline projects.  Chris Bloomer argued the NEB must be a “full life-cycle regulator” which includes “the review process including environmental assessment”.  They stressed that a 2nd level of review should be added up front by the Federal Government for “broader public policy issues such as climate change, the transition to a low carbon economy, Indigenous matters….” and CEPA recommended that this review be limited to only 1 year for any given pipeline project.


But the majority of groups present made it clear that the NEB had failed in terms of public participation and public inclusion.


“The NEB quasi­‐legal tribunal is an unfamiliar, daunting and intimidating process to ordinary people such as landowners, public interest groups and affected members of the public,” said David H. Thompson (The Fundy Research and Restoration Group). “There is currently no guarantee that groups and individuals, who wish to participate in an NEB hearing and make application for intervenor status to the board, will be accepted by the board to participate. Indeed, for the Energy East Project over 60% of those who applied last year to become intervenors were turned down by the NEB.”    


Scott Kidd (Conservation Council of New Brunswick) recommended that the “assessment of environmental and social impacts of energy projects be returned to the Canadian Environmental Assessment Agency”.  Sharon Murphy (concerned Saint John resident) said, “Use the CEAA process. We have great processes that welcome and accommodate all citizens to participate. It’s already there.”


Paula Tippett (retired family doctor in Saint John) recommended that experts on public health and a full Health Impact Assessment be included in the review process.  This omission is of great concern to Saint John groups already faced with high cancer rates in their city and this would be further compounded by a large tar sands bitumen storage facility and export terminal situated in the middle of the rural community of Red Head (in east Saint John).  Dr. Tippett also asked for, “more long-term studies [for how bitumen sinks in water] before you transport it around the country”.


Lynaya Astephen (Red Head Anthony’s Cove Preservation Association) asked that no pipeline project be approved or allowed to proceed until the Federal Government has repealed the environmental regulations gutted by Stephen Harper’s government in the omnibus Bill C-38 and Bill C-45. Ms. Astephen also asked that all proponents for pipeline projects should use the same mapping systems, and that it should be up to the government, not the proponents, to contact landowners and affected communities and instruct them on how they can participate in the review process.


David H. Thompson (The Fundy Research and Restoration Group) was very clear that the review process be removed from the NEB, asking that, “The future role of the NEB should be limited to the licensing and regulation of energy infrastructure, with the main emphasis being safety, reliability and insuring that the conditions of licensing and operation of the infrastructure are strictly enforced. We request that public review of new energy projects be carried out by the Canadian Environmental Assessment Agency who has a more inclusive, open and user‐friendly hearing and examination process. As well, the Canadian Environmental Assessment Agency, in its review process, holds comprehensive scoping meetings to identify issues and concerns of interest to the public well ahead of time and long before any scheduling of public hearings.”


Mr. Thompson was critical of the NEB Modernization not holding other meetings in the Atlantic Provinces, including Nova Scotia,  “This is completely unacceptable for a panel conducting a review of a national regulatory body such as the NEB.”  In a Media Release issued on the day of the Saint John hearing, the Council of Canadians and allies are calling for the NEB Modernization Panel to hold hearings in Nova Scotia to capture local perspectives and concerns, which are currently excluded.


Calgary vs. Ottawa

Sonya Savage of CEPA said that the “headquarters should not be in Ottawa.  NEB must be independent of government, not an arm of the government.”


“It is important that the public understand why the National Energy Board be removed from the review of pipelines,” says Gordon Dalzell, spokesperson for Saint John Citizens Coalition for Clean Air.  “It certainly has the appearance of being a captured regulator.  Among the changes made by the Mulroney Government, the headquarters of the National Energy Board was moved to Calgary from Ottawa.  

As reported in the National Observer by former President and CEO of BC Hydro Marc Eliesen, “A large number of staff elected not to leave Ottawa and these were replaced by largely Alberta-based employees coming directly from the oil and natural gas industry.”  “And the NEB Act was changed to impose residency requirements for Board members – under Section 5(a) they must “reside in, or within a reasonable commuting distance of,Calgary, Alberta.” adds Gordon Dalzell.  


Industry-funded vs. Taxpayer-funded

CEPA’s Chris Bloomer recommended that the NEB should remain “independent” and at “arm’s length from government”.  CEPA was quite specific about industry funding in their letter to Natural Resources Minister Jim Carr, “Should the government wish to assess expanding the role of the regulator, the panel should take into consideration that the NEB operates on a cost recovery model where the transmission pipeline sector pays for almost all of the NEB’s costs.” (CEPA letter to Natural Resources Minister Jim Carr, July 20, 2017, p1).


“An absolute requirement is for the review of these pipeline projects to be conducted by a process funded by the Federal Government, and not by industry,” says Paula Tippett, a retired medical doctor in Saint John.  

As reported in The Tyee by journalist Andrew Nikiforuk, “Thanks to a 1991 financial funding change, the NEB now gets 90 per cent of its money from industry levies from about 160 companies.”  “Most of the NEB’s budget comes from four pipeline companies:  Enbridge, TransCanada, Spectra and Kinder Morgan.”

Under Section 24.1 (1) of the NEB Act, “…the National Energy Board may, for the purposes of recovering all or a portion of such costs as the National Energy Board determines to be attributable to its responsibilities….” “make regulations (a) imposing fees, levies or charges”. 


Gordon Dalzell said that the 90% industry funding raises flags for the public trust and confidence in the NEB review process.


“With so much at stake for communities such as Red Head and the Greater Saint John area, we have to have confidence that the review process for these pipelines is for the public interest instead of biased towards industry.” says Lynaya Astephen, spokesperson for Red Head Anthony’s Cove Preservation Association.   


In addressing the ‘Canadian public interest’ for the NEB mandate, Mark D’Arcy commented that “if you just consider this from a economic point-of-view, the government is mismanaging our oil and gas economy. Alberta’s trust fund is only $50 Billion compared to Norway’s trust fund of almost $1 Trillion.”


Fossil Fuels vs. Renewables

CEPA’s Chris Bloomer presented that “the NEB must be a full life-cycle regulator” for pipelines.  CEPA is against the expansion of the NEB’s mandate “in emerging areas such as offshore renewables and to support the transition to a low carbon economy.” and asked in writing to Natural Resources Minister Jim Carr to delete this from the draft Terms of Reference for the NEB Modernization process.  CEPA’s Sonya Savage said that “regulating 73,000 kilometres of existing pipelines in Canada is their core function”.


(CEPA letter to Natural Resources Minister Jim Carr, July 20, 2017, p3)

Sharon Flatt asked for a change in policy, “We have a new reality of climate change in this country. We have national, and provincial, and international policies, laws and agreements that we have signed on to.  We need to reflect this new reality in our National Energy Board.”


Paula Tippett asked that the review process “need to consider upstream and downstream greenhouse gas emissions and our climate commitments” and “seek experts in the insurance industry on built infrastructure and public health”. Paula also asked that the government must provide “technical and financial incentives for Canadians to do retrofit/efficiency and clean energy projects”.


Consultation vs. Consent of Indigenous Peoples

CEPA’s Chris Bloomer said, “The NEB review process is guided by government policy, but is not the appropriate venue to address broader public policy issues.” CEPA recommended that the review on “broader public policy issues” be limited to only 1 year for any given pipeline project.  CEPA wants “efficient and effective processes for Indigenous, landowner and public consultation” (CEPA letter to Natural Resources Minister Jim Carr, July 20, 2017, p.4)


Many of the Saint John groups recommended the following: that the NEB and CEAA should incorporate the Truth and Reconciliation Commission recommendations into their policies and practices;  and the pipeline assessment process should respect the right to free, prior and informed consent reflected in the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).


Take the foxes out of the henhouse.

The NEB has lost the confidence of these Saint John groups, as well as many groups across Canada, that this Calgary-based agency can ever be a neutral, non-biased reviewer of large pipeline projects.  The Saint John groups are also in agreement that the Energy East review process should not proceed until the work by the NEB Modernization Panel is completed, and their recommendations are put forward and put in place by the Federal Government.  


Has the selection/makeup of the NEB Modernization Review Panel predetermined the outcome?  Why are the transcripts and List of Presenters completely absent from the www.neb-moderization.ca website, especially troubling with the deadline for public submissions ending on March 31st? (Note:  “Summaries” for 6 of the meetings are available on the website but actual quotes and the names of presenters are absent from these reports.)  Will the Energy East pipeline review process stay with the National Energy Board in Calgary, or be returned to the CEAA process in Ottawa?


In order to restore public trust in the review of pipeline projects, we need to take the foxes out of the henhouse. 

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Add your voice! Send a letter to Prime Minister Trudeau and Minister Carr demanding they appoint an unbiased panel to ensure a fair review process.


Your biased “expert” NEB modernization panelists:

Brenda Kenny worked until 2016 as the president of Canada’s top pipeline lobbyist association, the Canadian Energy Pipelines Association (CEPA). She worked for 10 years as the Business Leader of Planning, Policy and Coordination at the NEB before joining CEPA. Ms. Kenny provides a true example of the revolving door between government and industry. Even worse, she went from working for an industry regulator to being a notable industry lobbyist.

Gary Merasty is a former Liberal MP and current board member of the Canada West Foundation, a right-wing think tank known for its staunch pro-pipeline stance, including public support for Kinder Morgan’s Trans Mountain pipeline. Enbridge, a major pipeline company, is one of the Canada West Foundation’s “Champion” level sponsors.

Hélène Lauzon, who co-chairs the expert panel, is the chair of the Quebec Business Council on the Environment, a pro-pipeline business association that represents major pipeline companies like Enbridge and TransCanada, as well as other oil and gas companies.