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Home > Speeches and Presentations > Speeches and Presentations 2009 > Regulating for Performance

Regulating for Performance

Presented by
Gaétan Caron
Chair and Chief Executive Officer
National Energy Board

Regulating for Performance
NEB Forum 2009
Calgary, Alberta

27 May 2009

Good morning everyone. My name is Gaétan Caron and I am the Chair and Chief Executive officer of the National Energy Board. It is my pleasure to welcome you to this National Energy Board Forum. Sharing information on how the industry we regulate undertakes activities in a manner that protects the public, ensures worker safety and protects the environment is very high on my agenda. I am pleased to see that it is also important enough for you to take time out of your busy schedules to attend.

I would like you to note that we are providing simultaneous interpretation of the Forum so please make use of the headsets provided when presentations, questions or answers require translation in either language.

Since we last hosted an event of this type in 2005, we felt that it was time to update industry, landowners, other regulators and anyone else who is interested in the facilities that the NEB regulates. Today and tomorrow, you will hear about what the NEB has observed since 2005 including what has changed since then and what changes are coming down the pipe.

You will hear about public engagement best practices, about NEB regulatory initiatives, about NEB compliance tools and about combined NEB and industry experiences with incidents. I am especially pleased that our program includes a panel discussion on worker safety.

Role of the NEB

At the NEB, we are celebrating our 50^th anniversary this year. For 50 years, we at the NEB, and the many people who interact with us, have been ensuring Canadian energy is regulated in a manner that is respective of rights, responsive to markets and protective of Canadians and the environment. Five strategic goals guide our work:

• NEB-regulated facilities and activities are safe and secure, and are perceived to be so
• NEB-regulated facilities are built and operated in a manner that protects the environment
• Canadians benefit from efficient energy infrastructure and markets
• The rights and interests of those affected by NEB-regulated facilities and activities are respected
• The NEB delivers quality outcomes through innovation and leadership

I am extremely proud of the 320 people who work at the NEB, who every day, dedicate themselves to the public interest in a very concrete and very fair way. The work that we do to promote economic efficiency, safety and environmental protection is a key contributor to the quality of life of Canadians.

In 2008 we saw more applications than any other year in NEB history. In total there were 17 public proceedings. The Board gives each application careful consideration, guided by our concern for the protection of people and property as well as the basic principles of sustainability. All relevant environmental, social, and economic considerations are taken into account when we make a decision.

In addition to the heavy applications workload, we oversaw an extremely busy pipeline construction year. NEB inspectors and auditors performed exceptional service in the field. We conducted 255 compliance activities in the areas of environment, safety, integrity, emergency management and security in 2008. Each compliance activity that we conduct is documented and we follow-up to correct any deficiencies. We capture information relating to performance so we can conduct a compliance analysis on each company. Doing so allows us to prioritize when determining how to allocate our limited, but very skilled resources to compliance activities.

Goal-Oriented Regulation

You may be happy to know that at the NEB, we believe that goal-oriented regulation is here to stay. Ten years ago when we introduced the goal-oriented Onshore Pipeline Regulations, they were greeted with a mixture of excitement tempered by many questions. Today, we have two promulgated regulations which contain a mix of prescriptive and goal-based requirements - the definition of goal-oriented regulation. One of our newest Members, Mr. Bob Vergette will speak more on this in our next session

Risk-Based Lifecycle

At the NEB, we also employ a goal-oriented, risk-based approach to regulation across the full lifecycle of an energy facility, from the moment a facility is considered by the applicant to the day that facility is no longer needed. We also employ a quality management systems approach to everything we do as a regulator, in order to build consistency and to ensure that our best knowledge and resources are applied to their best advantage. This is done in large measure by our reliance on the management systems used by the industry we regulate.

I spoke earlier about the integration of relevant economic, social and environmental considerations in our decisions. I would like to take this integrated approach one step further, into to something that I term "Double Integration". This occurs when the NEB overlays its integrated risk-based lifecycle approach on top of the integrated sustainability approach to decision-making. This means that, throughout the life of the facilities we regulate, from pre-application consultations, during the application assessment process, during construction when we have approved facilities, during their operation, and for their abandonment, we integrate all relevant social, environmental and economic considerations. It is hard to envisage a more fulsome mandate than that given to the National Energy Board in its enabling legislation This thorough examination of information shows that the NEB is regulating for maximum performance.

Respecting Rights and Interests

One of the reasons for the need to continually improve our approaches is the growing concern about the impacts of energy infrastructure projects on the land, and on the people whose livelihood depends on the land. The Board recognizes that citizens expect to be meaningfully engaged, and have a right to participate in decision-making processes dealing with energy projects that affect them.

These factors motivated us a year ago to initiate the Land Matters Consultation Initiative (LMCI). The key areas for consultation were broken into four streams. I am pleased that final reports are just being released regarding:

• Company interactions with landowners,
• Improving the accessibility of NEB processes,
• Pipeline abandonment - physical issues, and
• Pipeline abandonment - financial issues.

You will hear more about this later today, but I will say that we have concluded that a consultative approach to dealing with land matters will become part of doing business by the NEB and industry, in keeping with evolving societal expectations.

Safety is Job One

Now, I’d like to talk with you about an area where the performance of our industry is not as good as we would like it to be - worker safety.

The pipeline industry is a safe place to work. When we compare injury and fatality frequencies with other industries, the pipeline industry compares favourably. But in the light of a recent fatality and of cases of loss of limb, industry’s safety performance record must improve.

At the NEB, we are concerned with the growing number of accidents and incidents involving workers. This slide, taken from our 2008 Annual Report to Parliament, shows the trend. In response to these numbers, over the past three years, we have increased our compliance oversight and have noted fewer occasions where safety standards were compromised. Despite this apparently good news, pipeline incidents have been trending upwards since 2003. The Board is working diligently to try and understand the underlying factors leading to this inconsistency and we are asking the industry to do the same. This trend is unacceptable to everyone involved in the pipeline industry and I am dedicating the resources of the National Energy Board to work together with industry and others to reverse it. Safety is, and always will be, of paramount interest to the NEB.

I am pleased to note that this Forum will provide a panel discussion on the broad topic of safety as well as case studies examining specific real-life situations from which we can learn.

Shared Challenges

In my brief talk this morning, I have touched on many of the good things the industry and ourselves, as a regulator, are doing. I would also like to identify three specific challenges we are facing that are relevant to the theme of this Forum: enforcement, regulatory approach, and technology.

Enforcement

Incidents of third party damage to pipelines and increasing crossing violations show us that our enforcement toolkit requires serious examination. We will be meeting with our stakeholders over the coming year to discuss what an effective enforcement toolkit looks like. My belief is that we may not have all of the tools we need to be effective. Our consultations will help us determine what specific tool or tools we may need to add to the toolkit.

Regulatory Approach

Many of our recent interactions with industry and with all stakeholders have shown that Canada is a global leader in the development and application of goal-oriented regulation. At the same time, we need to develop a better understanding on this topic. This Forum is about strengthening the dialogue between the NEB and all stakeholders on how goal-oriented regulation applies to the lifecycle of regulated facilities and activities.

Technology

The industry continually reaps the benefits of new materials and design methods. We must remember that we have an obligation to ensure that new technology must be subject to scrutiny, through a transparent and broadly shared dialogue

Thank You!

We are all faced with challenges and opportunities. Facing and dealing with these challenges, enables us to seize upon opportunities. Your presence here this morning demonstrates very clearly that you are up to the task ahead. Thank you for your interest in the NEB Forum.

 

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Date Modified:

2011-10-28