OTTAWA/CALGARY Oct 19 Canada's government may
curb the national energy regulator's power, including stripping
it of sole oversight for new projects, as part of reforms to a
body under pressure over a botched pipeline hearing, according
to two sources familiar with the matter.
Ottawa, responding to what it says is general public
displeasure with how environmental assessments of energy
projects are carried out, is eyeing major reforms and
tentatively plans to push them through in 2018, said one of the
Such changes will irritate industry players who insist the
National Energy Board (NEB) is working well. Critics say the NEB
is too close to the energy industry.
The Liberal government has named an expert panel to review
potential changes to the environmental assessment system and
will wait for it to report back early next year before deciding
which approach to take. The panel can recommend the NEB's
responsibilities be amended, said a spokesman for the panel.
Environmentalists and aboriginal activists are stepping up
opposition to energy projects, threatening years of delays at a
time when Canada needs to get its landlocked crude to its east
and west coasts to avoid pipeline bottlenecks that leave
Canadian oil trading at a discount.
One option under consideration is stripping the NEB of its
authority as the only body that can assess major
federally-regulated energy projects such as pipelines, the
A second, separate panel will look specifically at how the
NEB is governed.
The NEB upset Natural Resources Minister Jim Carr and other
cabinet members with the way it handled a hearing into
TransCanada Corp's proposed Energy East pipeline in the
province of Quebec, said four sources.
An NEB panel examining the project resigned last month after
it emerged members had privately met a consultant for the
company before the proceedings formally started.
The misstep added to pressure on the NEB. Carr said in
January that Canadians did not trust the current assessment
system and also promised to reform the regulator.
"All options are on the table," Carr's spokesman Alexandre
Deslongchamps said when asked whether the NEB's role in doing
assessments might be curbed. He did not respond directly when
asked whether Carr was unhappy with the regulator.
The NEB referred questions to Carr's office.
The regulator was given sole responsibility for assessing
federally-regulated energy pipelines in 2012 as part of reforms
introduced by the then Conservative government, which described
the former process as overly complex and time-consuming.
The Liberals could return to the previous system, where the
NEB shared responsibility with the independent Canadian
Environmental Assessment Agency.
Industry officials say the 2012 reforms are working and
express little enthusiasm for another set of major changes.
"The NEB did a wonderful job of fulfilling their mandate
under the legislation that they have, which wasn't always easy,"
Ian Anderson, president of Kinder Morgan Inc.'s Canadian
In May, the NEB gave permission for Kinder Morgan to twin
its existing Trans Mountain pipeline from the Alberta oil sands
to the Pacific coast. The project still awaits federal approval.
The Energy East hearings are now stalled until a new panel
can be appointed, which will add more delays to a process that
is already set to take years.
Critics say giving the NEB more powers was a mistake.
"The NEB is not the body that should be doing environmental
assessments," said Jessica Clogg, executive director of the West
Coast Environmental Law non-governmental group.
She cited the 2015 appointment of a Kinder Morgan consultant
to the NEB and the fact the board required people wishing to
comment on the Trans Mountain project to fill in an 11-page
"It's been a fiasco and speaks to some significant change
that is needed," Clogg said.
Dirk Lever, an energy infrastructure analyst at AltaCorp
Capital in Calgary, said despite the Energy East panel debacle,
the NEB was generally well respected by the Canadian oil and gas
industry and acted as an exacting regulator.
"They are no pushover but the environmentalists make it
sound like that," he said.
(Reporting by David Ljunggren and Nia Williams; Editing by Alan