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Varcoe: In letter to feds, Alberta lambastes report on overhauling NEB

Published in June, 2017

The Alberta government has a few issues with a new report that strives to modernize the National Energy Board.

Actually, make that problems. Big problems.

In a new submission to Ottawa in the wake of last month’s study calling for an overhaul of the country’s energy regulator, the Notley government picks apart the report, plank by plank.

In a letter to Natural Resources Minister Jim Carr, Alberta’s energy minister takes issue with the panel’s recommendations of replacing the NEB, creating a two-step process for major infrastructure projects that would double review timelines and relocating parts of the organization out of Calgary.

“We need to not cause unnecessary delays and uncertainty for industry. And the thought of moving everything to Ottawa was a bit disconcerting,” Energy Minister Marg McCuaig-Boyd said Monday.

“We are the heart of Canada’s energy industry and we need to keep the offices in Calgary.”

The modernization panel review was established last year amid festering concerns surrounding the quasi-judicial board and its review processes for major energy developments, such as large oil pipelines or liquefied natural gas projects.

The five-member panel made 26 recommendations last month to fix the NEB, which it says suffers a “crisis of confidence.”

The group said it heard from many Canadians worried the regulator is “captured by the oil and gas industry,” and that it is seen as “an organization that limits public engagement.”

It concludes the NEB faces a conundrum trying to reconcile Canada’s energy, economic and climate goals, such as increasing petroleum production while trying to curb greenhouse gas emissions.

While its diagnosis is close to the mark, the report’s remedies are a source of anger in Alberta, where the bulk of oil and gas in Canada is produced.

The panel suggests replacing the NEB with one organization that collects energy information, while another agency would oversee its regulatory functions.

The group proposes doubling the length of time to review major projects — up to three years — and moving some of the board’s functions out of Calgary to Ottawa to address perceptions of bias.

In feedback delivered to Carr last week, the NDP government takes aim at recommendations that would see the federal government take up to one year on all major projects “to determine alignment with national interests” before a detailed project review could begin.

If a major pipeline cleared this first hurdle, then a two-year joint hearing process — including a full environmental assessment by the Canadian Environmental Assessment Agency and the new energy transmission commission — would be held.

“It is unclear how a review process twice as long as the current process will produce more satisfying, timely results for any parties involved,” McCuaig-Boyd wrote to her federal counterpart.

“The proposed increase to timelines could further delay or deny major infrastructure projects. In addition, the process could also increase costs to industry and leave projects open to rejection in each review phase.”

The biggest sticking point for the province, however, is the suggestion the board is perceived as being bias, simply because its based in the centre of Canada’s energy industry.

The panel recommends the Canadian Energy Information Agency be situated in the federal capital to be close to government departments. Other NEB functions should also be shifted to Ottawa, including the office of the regulator’s board of directors, to give it a tighter connection to the seat of government, it said.

Premier Rachel Notley has already described this idea as “dumb,” and Alberta’s response follows up on the theme.

The province believes Calgary is the most practical and logical location for the agency, since it’s where the majority of energy businesses transactions and interactions take place.

“Alberta submits that moving the NEB office from Calgary to Ottawa does not solve a problem, but rather creates a variety of new problems, including replacing the perception of one bias with perception of another bias, explicitly increasing the ties to the federal government,” McCuaig-Boyd stated.

The Calgary Chamber of Commerce and Calgary Economic Development also sent feedback to the federal minister questioning the suggestion some of 450 NEB employees should be shifted to Ottawa.

“To suggest the NEB is incapable of being independent because it is located in Calgary … is an insult to both Calgarians and Canada’s professional public service,” said the chamber in its submission.

Likewise, the economic development authority argues fragmenting the NEB into two locations would lead to inefficiencies in management and internal communications.

After the report’s release, Carr said the federal government would meet in the fall to determine the next steps.

In the heart of the energy sector, the reviews are in.

And Alberta’s energy minister — a former teacher — has already handed out her marks on the contentious NEB report, titled “Forward, Together.” 

“I think it needs to go back and maybe (have) a few re-dos and hand it back in for a grade,” she said.

Chris Varcoe is a Calgary Herald columnist.

cvarcoe@calgaryherald.com