Funding to Support Public Input into NEB Modernization

Funding to Support Public Input

Natural Resources Canada (NRCan) is offering funding to support the development of research, studies or position papers related to the six themes of the NEB Modernization review: (1) Governance; (2) Mandate; (3) Decision-making roles; (4) Legislative tools for lifecycle regulation; (5) Indigenous engagement; and, (6) Public participation. This is in addition to the funding mentioned in the Terms of Reference that was made available to support the participation of Indigenous peoples.


Who can apply?

Funding is available to interested public stakeholders such as non-governmental organizations or associations.


How funding will be allocated

Limited funding may be provided on a case-by-case basis, subject to the established criteria below.
Funding decisions will be based on the following assessment criteria:

• Proposals must be less than $25,000 in total (including tax). Note that travel costs and capital costs are not eligible.
• All work must be completed by April 1, 2017. To maximize perspectives received through this process, funding is limited to one approved proposal per organization.
• Proposals must detail the deliverable (e.g. report, study, position paper) that your organization will produce and the timeline.
• Proposals must describe how the project contributes to the NEB Modernization review.
• Proposals must include details on the level of effort and resources that will be allocated to the proposal (e.g. resources to be used and their salaries). NRCan will use this information to confirm whether or not the cost of the proposal is fair and reasonable.
• Should your proposal be selected to receive funding, you will be contacted directly by NRCan officials. Final products must be provided to NRCan electronically in Microsoft Word format.
• Recipients who have already been allocated funding for Indigenous participation in the NEB Modernization review are not eligible for funding to support public input.

Eligible activities
Research, studies or position papers related to one of the six themes of the NEB modernization review:

1. Governance;
2. Mandate;
3. Decision-making roles;
4. Legislative tools for lifecycle regulation;
5. Indigenous engagement; and,
6. Public participation.

More information on these six themes can be found in the expert panel’s Terms of Reference.


Funding level

A maximum of $25,000 (including taxes) is available per applicant.


How to apply?

If you think your organization or association can contribute to the NEB Modernization review process, submit a proposal between two and five pages in length to NRCan.NEBModernization-ModernisationONE.RNCan@Canada.ca(External link) with the subject line “Public input funding proposal” and your organization’s name.

Should you wish, you may also mail your application to:

National Energy Board Modernization Secretariat
Natural Resources Canada
580 Booth Street,17th Floor
Ottawa, ON  K1A 0E4

Application Deadline

Applications will be accepted until January 31, 2017. Funding is limited and will be distributed on a case-by-case basis.

Interesting debate about the NEB and regulatory capture from Andrew Nikiforuk

Click on the following link to read an opinion piece by Andrew Nikiforuk on the regulatory capture of the National Energy Board, followed by an in-depth line of comments and responses between Nikiforuk, Andrew Leach (an Alberta-based regulatory economist), and Dave Core (of the Canadian Association of Energy and Pipeline Landowners Associations - CAEPLA): National Energy Board: Captured Regulator?

Advance chapter release from BP Disaster Commission Report: Failures in Industry and Government

The U.S. National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling has released an advance chapter from its report on the BP Disaster.  Of particular note for Canadians is the report section dealing with regulatory failures by the former Minerals Management Service (MMS), which played a multi-function role similar to that of the National Energy Board (NEB) in Canada.  The NEB, like the National Commission in the U.S., is currently undertaking a review of the possibility of offshore drilling in Canada's North.  It remains to be seen whether anyone in Canada looks into the risk of regulatory failures in the NEB's oversight of environmental protection and safety in Canada's oil and gas industry.  Weak regulations combined with lax oversight leaves open the probability that major disasters will continue to occur.

Here's the section from the National Commission report on the MMS failure:

Regulatory Failures

Government also failed to provide the oversight necessary to prevent these lapses in judgment and management by private industry. As discussed in Chapter 3, MMS regulations were inadequate to address the risks of deepwater drilling. Many critical aspects of drilling operations were left to industry to decide without agency review. For instance, there was no requirement, let alone protocol, for a negative-pressure test, the misreading of which was a major contributor to the Macondo blowout. Nor were there detailed requirements related to the testing of the cement essential for well stability.

Responsibilities for these shortfalls are best not assigned to MMS alone. The root cause can be better found by considering how, as described in Chapter 3, efforts to expand regulatory oversight, tighten safety requirements, and provide funding to equip regulators with the resources, personnel, and training needed to be effective were either overtly resisted or not supported by industry, members of Congress, and several administrations. As a result, neither the regulations nor the regulators were asking the tough questions or requiring the demonstration of preparedness that could have avoided the Macondo disaster.

But even if MMS had the resources and political support needed to promulgate the kinds of regulations necessary to reduce risk, it would still have lacked personnel with the kinds of expertise and training needed to enforce those regulations effectively. The significance of inadequate training is underscored by MMS’s approval of BP’s request to set its temporary abandonment plug 3,300 feet below the mud line. At least in this instance, there was a MMS regulation that potentially applied. MMS regulations state that cement plugs for temporary abandonment should normally be installed “no more than 1,000 feet below the mud line,” but also allow the agency to approve “alternate requirements for subsea wells case-by-case.”173 Crucially, alternate procedures “must provide a level of safety and environmental protection that equals or surpasses current MMS requirements.”

BP asked for permission to set its unusually deep cement plug in an April 16 permit application to MMS.175 BP stated that it needed to set the plug deep in the well to minimize potential damage to the lockdown sleeve, and said it would increase the length of the cement plug to compensate for the added depth. An MMS official approved the request in less than 90 minutes.176 The official did so because, after speaking with BP, he was persuaded that 3,000 feet was needed to accommodate setting the lockdown sleeve, which he thought was important to do. It is not clear what, if any, steps the official took to determine whether BP’s proposed procedure would “provide a level of safety . . . that equal[ed] or surpass[ed]” a procedure in which the plug would have been set much higher up in the well.

MMS’s cursory review of the temporary abandonment procedure mirrors BP’s apparent lack of controls governing certain key engineering decisions. Like BP, MMS focused its engineering review on the initial well design, and paid far less attention to key decisions regarding procedures during the drilling of the well. Also like BP, MMS did not assess the full set of risks presented by the temporary abandonment procedure. The limited scope of the regulations is partly to blame. But MMS did not supplement the regulations with the training or the processes that would have provided its permitting official with the guidance and knowledge to make an adequate determination of the procedure’s safety. 

Read the advance release at: Chapter Four.

Canada's National Energy Board creating a "Remediation Process Guide" to sign off on pipeline company contamination

The National Energy Board (NEB) says on its website that it has:

... developed a draft Remediation Process Guide (Guide) for industry to follow to ensure successful remediation of soil and groundwater contamination. The goal of this Guide is to provide a clear process for submitting remediation information. If remediation is determined to be successful then the NEB will provide a letter to that effect. The NEB will be hosting a technical meeting on 14 October 2010 in Calgary at a location to be determined to answer any questions and hear comments that interested parties may have. Parties wishing to provide written comments on the Guide are requested to do so by 1 December 2010. The Board will finalize the Guide shortly thereafter.

In the draft guide, the NEB says it makes every effort to ensure industry follows procedures to minimize releases, leaks and spills, but from time to time "accidents can occur".  In reality, the NEB operates on the basis of "goal-oriented regulation" whereby the Board sets goals and allows companies to decide how they will achieve those goals.  However, as we have seen with the BP disaster and the recent Enbridge spill in Michigan, "goal-oriented regulation" simply doesn't work when it comes to an all or nothing proposition like environmental contamination.  How many spills will it take before the regulator steps in and tells companies what they need to do to protect the environment?

The NEB also says that it is the "lead agency" for all contamination incidents related to its pipelines.  Landowners should be cautious to accept this approach.  NEB requirements regarding contamination (including both new spills and the discovery of historical contamination) may not match protections afforded to landowners under provincial environmental legislation.  Why should landowners have less protection from contamination just because the NEB is involved? 

The aspect of the proposed Remedation Process Guide that should be most concerning to landowners is the proposed "Remediation Closure Letter".  Essentially, the NEB will issue letters to companies who have contaminated the environment stating that remediation is complete and the NEB's file is closed.  The NEB says that its "expectation for reclamation is that the land is restored to a state comparable with the surrounding environment".  That is not necessarily the standard to which landowners are entitled to have their properties remediated under provincial laws and/or the common law.  Landowners should be demanding clean-up to the highest level possible under applicable law.  Also, what is to stop the NEB from issuing such a letter to a company before the company has adequately compensated the landowner for the damage caused?  What would that letter do to a landowner's negotiating position?

The NEB's proposal is troubling in that it perpetuates the problems associated with its policy of "goal-oriented regulation".  Companies are allowed to do what they want to avoid contaminating the environment, but when they do contaminate, they can rest assured that the NEB will sign off on their response.  In other words, the NEB's protection of the environment is limited to stepping in after contamination has occurred in order to validate the steps the company has taken to address the contamination.  There is still nothing in place to ensure that the contamination does not occur in the first place.  Is this an acknowledgement on the part of the NEB that there is nothing that can be done to prevent spills that will inevitably occur as pipeline infrastructure ages and corrodes? 

Click on this link to read the proposed guide: NEB Draft Contamination Remediation Guide.

National Energy Board Chair says Canadian regulations adequate - is he right?

The National Energy Board (NEB) has released the opening statement by Gaeton Caron, Chair of the NEB, to the Parliamentary Standing Committee on Natural Resources on the issue of the emergency response to offshore oil and gas drilling.  While Caron deals mainly with the risk of a repeat of the BP disaster in Canada, he makes several broad statements about the effectiveness of NEB regulations in protecting the environment and lands.  He talks about the "stringent" environmental assessments of projects undertaken by the NEB.  He also says that, "NEB-regulated companies are fully responsible for anticipating, preventing, mitigating and managing incidents and oil spills of any size or duration."  Is this the experience of NEB-regulated landowners in Canada?  Is "goal-oriented regulation" working for Canadian landowners?

Read Caron's opening statement at: National Energy Board Opening Statement.

Same Season Relief Well issue before the NEB - What will be done in Canada to avoid a repeat of the BP disaster here?

Somewhat ironically, the National Energy Board had started a hearing process in February, 2010 to review its Same Season Relief Well (SSRW) policy, just weeks before the BP drilling rig explosion and oil spill in the Gulf of Mexico (relevant documents can be viewed at: MH-1-2010.  BP has been criticized for not having relief wells in place to reduce the pressure in its damaged well that is now spewing oil onto the Gulf coast. 

Here's what BP said in its submission to the NEB in March:

As will be discussed in greater detail below, for both technological and operational reasons, continuance of the SSRW capability is not required and is problematical for BP and other operators, and may well impede further exploration in the Beaufort Sea.

BP is advocating that the policy be changed by eliminating the requirement for same season relief well capability, and any time-of-year drilling restrictions associated with that policy. In BP's view, consistent with the on-going development of goal-oriented regulation, the Board should utilize a series of goals and objectives to enhance safety and protection of the environment.

That was in March.  Of course, in April, BP's operations in the Gulf of Mexico have initiated the worst environmental disaster in the United States since the Exxon Valdez.  Is "goal-oriented regulation", which is the NEB's policy in dealing with safety and the environment, right for Canada?  Where the goal is to avoid environmental disasters, does "goal-oriented" regulation (i.e. set the goal and let industry decide what needs to be done to achieve the goal) do any good?

For its part, Conoco Phillips wrote to the NEB on Monday to suggest that the hearing process be put on hold pending the investigation of the BP disaster: Conoco Phillips to NEB.