OTTAWA – The process for reviewing and approving energy projects in Canada desperately needs an overhaul to help resolve the “pipeline paralysis” currently plaguing the country and to bring more legitimacy to the exercise, a Senate committee recommends in a new report.
The National Energy Board’s mandate must be broadened to consider more environmental concerns, while an indigenous peoples representative should be permanently appointed to the federal energy regulator, the Senate committee on transport and communications says in its report released Wednesday.
The committee – which includes Conservative, Liberal and independent senators from across Canada – is also recommending the government depoliticize the process as much as possible and remove cabinet’s final approval of NEB decisions on energy projects such as pipelines.
“A dated and insufficiently inclusive approvals process has thwarted attempts to ensure Canadians across the country benefit from the economic potential of the Western oil patch,” the report says.
“Modernizing the National Energy Board (NEB) is an important first step toward increasing public confidence in the regulatory process,” the report adds. “Pipeline paralysis is no longer an option. The federal government has an obligation to make use of the country’s abundant resources so that all Canadians can benefit.”
The Senate panel also recommends the NEB, as part of its hearings on the proposed Energy East pipeline from Alberta to New Brunswick, examine the Strait of Canso area in Nova Scotia as an alternative endpoint of the pipeline.
The report comes as the Liberal government is in the process of modernizing the mandate of the National Energy Board and reviewing federal environmental assessment processes.
Two separate panels examining the NEB’s mandate and environmental reviews are expected to report back to the government my March, with legislative changes likely to be introduced by fall 2017.
The Senate committee’s recommendations released Wednesday came as the Assembly of First Nations was debating the benefits and drawbacks of pipelines during its special chiefs assembly in Gatineau, Que.
The committee report says pipelines are “critically important” to creating wealth in Canada and are also the safest, most cost-effective way to move petroleum throughout the country.
“It is clear to us that the facts are unarguable. Pipeline construction is an economic imperative – full stop,” Conservative Sen. Michael MacDonald, deputy chairman of the committee, told reporters Wednesday in Ottawa.
“Facts, admittedly, are in short supply when it comes to the pipeline debates. There is a lot of rhetoric on both sides of the issue that is divisive and, frankly, unproductive.”
Approximately 97 per cent of Canada’s oil exports go to the United States – a country that has growing crude reserves and is reducing its reliance on Canadian energy. Canada is also losing billions of dollars a year by selling its oil at a price discount to the U.S., compared to higher international Brent prices.
Despite the urgent need to get the product to international markets, the process for pipeline approval in Canada remains full of holes, he said.
Giving cabinet final approval over NEB recommendations “casts a political pall over the entire process and makes National Energy Board hearings seem like a prolonged, purposeless, pantomime,” MacDonald said.
“Evidence, not politics, should dictate how we proceed with pipeline expansion,” he said.
MacDonald said the NEB has an overly narrow mandate that makes it impossible to take into account important interests from aboriginals and environmental groups.
The NEB is too restricted to reviewing projects on more technical lines, meaning environmental concerns “get short shrift – which is obviously a mistake,” he added. Environmentalists and others protesting energy board hearings should be more involved in the process because they can contribute important expertise, he said.
Assembly of First Nations National Chief Perry Bellegarde has maintained the current NEB system is flawed. He says decisions on natural resource developments must respect aboriginal rights and that First Nations people should have direct decision-making roles on the board.
Indeed, the federal government has a constitutional duty to consult aboriginal communities that goes well beyond what the NEB is currently required to consider, the Senate panel says.
The committee recommends that results of federal consultation with aboriginal communities be better fed into the regulator’s review process.
Asked Wednesday about the committee’s recommendations, Natural Resources Minister Jim Carr said the expert panel reviewing the NEB’s mandate is being given a “blank sheet of paper” to help create a “world-class regulator.”
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