The National Energy Board modernization and pipelines: 5 things you should know

Earlier this year, the federal government announced that it would be modernizing the National Energy Board (NEB), and reviewing Canada’s environmental and regulatory processes. In this post we look at how a review and a clarification of its purpose could enhance the effectiveness of regulatory review process for federally regulated pipelines to better serve the needs of Canadians.

Here are five things you should know about the NEB, and the reasons for modernizing it:

The purpose of the NEB

Since 1959, the NEB has been responsible for reviewing applications for pipelines that cross international and provincial/territorial boundaries. It also oversees the entire life cycle of 73,000 km of existing pipelines, playing a crucial role in ensuring the safe operation of Canada’s pipeline systems. It has operated at arm’s length from the government as an independent, quasi-judicial regulator, guided by government policy.

Under the current regulatory environment, the NEB leverages the expertise of the pipeline industry, while also ensuring companies are complying with regulatory requirements. Until recently it has not been involved in broader public policy issues such as climate change, the environmental effects of oil and gas projects, or Indigenous rights and matters that are beyond the scope of a specific project.

A change in public expectation

As the pipeline debate becomes more intense, there is an increasing expectation that the NEB should be addressing public policy issues, but that has never been part of its core mandate. This has led to a great deal of disappointment, and a feeling among some Canadians that the NEB is broken.

Dissatisfaction with the NEB affects everyone

The NEB has found itself at the centre of the broader public policy debate and the pipeline review process has become burdened by issues that are not part of its core mandate. The result is a loss of confidence in the NEB’s ability to make decisions in the public interest, while proponents and potential investors are finding the process uncertain and cumbersome.

What modernizing the NEB means

 According the Government of Canada, “Modernization of the NEB will ensure it is able to continue to effectively regulate energy in a way that has the confidence of Canadians.”

Why a review is important

Since the inception of the NEB in 1959 there have been some amendments and improvements, but no comprehensive review. The current review provides an opportunity to build on the NEB’s strengths and confirm its mandate and roles.

In 2015, CEPA member companies proposed to invest $50 billion in pipeline infrastructure projects in Canada over the next five years, but to bring these projects to realization they must have a competitive investment climate. If potential investors see a regulatory system that works efficiently and effectively, they are more likely to invest their capital in projects that fall within those jurisdictions.

To learn more about the modernization process and the transmission pipeline industry’s recommendations for strengthening the NEB, check out CEPA’s submission to the expert panel.

The NEB modernization is just one of the reviews being undertaken by the Federal Government. In these previous blog posts, you can find out more about the reviews of the The Fisheries Act, The Canadian Environmental Assessment Act and The Navigation Protection Act.