OTTAWA — A panel advising the government on how to overhaul the National Energy Board says the regulator should be dismantled and replaced with two new agencies, all within a more coherent national energy policy.
The five-member panel, appointed last fall, presented its report this morning to Natural Resources Minister Jim Carr.
After months of public hearings and talking to stakeholders, the panel says the National Energy Board has been given an impossible task: regulating the growth of the industry and marrying its growth with the government’s climate-change goals.
The panel recommends the government create a new national strategy which incorporates Ottawa’s policy vision on energy, the environment, and the economy.
And it says the government should take up to a year to itself consider whether any new project proposals align with that vision.
It recommends dismantling the board and replacing it with two agencies to separate the functions of regulation and review from the analysis and production of energy-related information.
The government is accepting comments online on the panel recommendations until June 14.
The review fulfills part of Carr’s ministerial mandate to “modernize the National Energy Board to ensure that its composition reflects regional views and has sufficient expertise in fields such as environmental science, community development and indigenous traditional knowledge.”
The former Conservative government passed legislation in 2012 that allowed cabinet to override the board’s rejection decisions. Prior to that change, cabinet only saw projects the board had recommended for approval.
The government ought not be able to overturn a National Energy Board decision except through the courts, Lesley Matthews, an energy industry consultant and former Kinder Morgan Canada, wrote in a commentary for the C.D. Howe Institute.
“What’s the point of going through this process of having people present evidence and having the decision made on evidence if it can just be made on non-evidence,” Matthews said in an interview.
At the same time, the government needs an energy policy framework for the country that would serve as the guidebook to the national regulator as to whether or not a particular project fits Canada’s vision.
A perceived conflict of interest derailed the board’s review process for the Energy East pipeline project last year after some of the appointees met privately with former Quebec Premier Jean Charest, who was lobbying on behalf of TransCanada Corp., the company proposing the project.
Matthews said the government and its regulator should review whether the board’s headquarters should be in Calgary, where its operates alongside the head offices of many of the companies it is supposed to regulate.
Erin Flanagan, program director of federal policy for the Pembina Institute, said the role of performing environmental assessments should be confined to the Canadian Environmental Assessment Agency.
As it stands, the National Energy Board and the Canadian Nuclear Safety Commission are the only two national bodies that still do their own environmental assessments, Flanagan noted.
The National Energy Board has a mandate to regulate the construction and operation of fossil fuel pipelines and power lines that cross provincial or international borders, as well as the imports and exports of natural gas, the export of oil and electricity and oil and gas exploration.
It is an arm’s length, quasi-judicial tribunal that reports to Parliament via the natural resources minister.