ARCHIVED – National Energy Board – 2011-12 Departmental Performance Report – Section II: Analysis of Program Activities by Strategic Outcome

Section II: Analysis of Program Activities by Strategic Outcome

Strategic Outcome

The Board has one strategic outcome: Safe and secure pipelines and power lines built and operated in a manner that protects the environment and enables efficient energy markets. To support the successful delivery of the NEB’s strategic outcome, the Board has two program activities: Energy Regulation and Energy Information. This section describes the targets for each program, and performance achieved against each indicator and target. Information is also provided on the financial and human resources dedicated to each program area.

Program Activity: Energy Regulation

This program provides the Canadian public, project proponents and other government agencies with regulation of international and designated interprovincial power lines; construction, operations, and tolls and tariffs on international and interprovincial pipelines; energy trade; and exploration and development in certain frontier and offshore areas. The companies that are regulated by the Board create wealth for Canadians through the transport of oil, natural gas and natural gas liquids, and through the export of hydrocarbons and electricity. As a regulatory agency, the Board’s role is to help create a framework which allows these economic activities to occur when they are in the public interest. The public interest is inclusive of all Canadians and refers to a balance of economic, environmental and social interests that change as society’s values and preferences evolve over time.

The Energy Regulation Program has two program sub-activities:

• Energy Regulation Development: This program sub-activity provides the regulatory expectations for applications and compliance with regulatory decisions. To make decisions in the Canadian public interest and to provide regulatory leadership that is responsive, proactive and innovative, the NEB must continually develop, improve and communicate regulations, regulatory and compliance tools, guidance, and processes. Related activities include developing and maintaining Memorandums of Understanding and workplans, providing regulatory and technical expertise through standards associations, and sharing best practices.
• Energy Regulation Implementation: This program sub-activity provides assessment and processing of regulatory applications submitted under the Acts administered by the NEB. It also provides regulatory oversight of energy infrastructure and markets through monitoring and enforcement activities. Responsibilities are pursuant to the NEB Act, COGO Act, CPR Act and the Canada Labour Code. Related services include stakeholder engagement and liaison, addressing landowner complaints, and facilitating appropriate dispute resolution.

Performance Summary and Analysis of Program Activity

The Board’s top priorities are the protection of the environment and the safety of the public and the people who build and operate NEB-regulated pipeline facilities. The Board is committed to continual improvement, and to keeping the pipeline industry a safe method of transporting petroleum products. Generally, the NEB performed well against its expected results for the Energy Regulation Program. The following is a report on the activities that the NEB set out to achieve against its expected results.

Safety, Security and Environmental Protection

• There were two fatalities on NEB-regulated pipelines in 2011-12 which is above the 3-year average of 0.7.
  • In both cases the fatalities were occupational health and safety incidents under joint jurisdiction with the province. The NEB’s target is zero fatalities – any fatality is unacceptable to the Board.
• There were also four serious injuries, down from the 3-year average of six but still above the NEB’s annual target of zero.
• There were no pipeline ruptures in 2011-12. This is a decrease from the 3-year average of two ruptures per year.
• There were two major liquid releases (>100 m³) in 2011-12. This is an increase from the 3-year average of one major liquid release per year.
• The number of reported unauthorized activities in 2010-11 was 88 and in 2011-12 was 77. The 3-year average is 100.

The Board uses data collected through its compliance verification (e.g. inspections and audits) and compulsory reporting of environmental and safety incidents by regulated companies under the OPR-99 to manage its compliance oversight activities and inform its regulatory development. Injury frequencies, incident trends, compliance activity scorecards and other indicators help the NEB identify where improvement is needed. In addition, the NEB follows up on every reported incident to determine whether company corrective actions are appropriate. When required, the NEB takes direct action. In 2011-12, the Board:

• Ordered pressure restrictions for five pipelines as a precautionary measure to mitigate safety concerns.
• Reviewed and approved the completion of three Incident Remediation Action Plans.
  • In May 2011, the NEB released the Remediation Process Guide for spill clean-up. The remediation guide was drafted following extensive consultation and provides industry with a clear process for submitting appropriate remediation information to the NEB.
• In February 2012, the NEB released a plan for improving regulatory clarity in its damage prevention framework to help encourage cooperation, safety education and compliance with requirements.
• In 2011-12, the NEB completed 143 planned compliance activities in five main compliance programs: environment, integrity, safety, security and emergency management. A further 359 demand-driven compliance verification activities were completed during the same period.

The rights and interests of those affected by NEB-regulated facilities are respected

The Board operates under a variety of acts, regulations, rules, guidelines, guidance notes and memoranda of guidance. Furthermore, the NEB continues to work on initiatives related to its operating framework to ensure that the rights and interests of those affected by NEB-regulated facilities and activities are respected.

• The Filing Requirements for Arctic Offshore Drilling, a companion document to Review of Offshore Drilling in the Canadian Arctic, was published in December 2011. The publications followed several months of extensive consultation carried out across the North during the NEB’s Arctic Review.
• The Board concluded its project to update the Environmental and Socioeconomic Assessment (ESA) section of its Filing Manual for pipeline applications. The revisions resulted in an improved understanding of the ESA review process and clarification of the Board’s expectations for filings. Over 50 individuals and organizations participated in the process, including environmental non-government organizations, Aboriginal groups, other federal departments, provincial or territorial governments, academics, regulated companies, environmental planners, consultants and other industry-related organizations.
  • There were nine additional minor amendments made to the Filing Manual to refine language and improve formatting.
• In August 2011, the NEB had Ipsos Reid conduct a survey of 1,200 landowners with NEB-regulated pipelines on their land. The purpose of the survey was to collect information to help the NEB assess the appropriateness of its programs and plan for improvements.
  • The survey found that 71 per cent of the respondents were satisfied with the amount of contact from the NEB. While 69 per cent of respondents reported satisfaction with the information and publications they had received from NEB, few had visited the NEB website and, of those that did, 29 per cent said it was difficult to navigate. The NEB is acting on these findings to enhance its tools and services for stakeholders.
• The NEB followed through on its commitment to develop new guidance promoting safe pipeline crossings related to agricultural activities.

The NEB signed three Memoranda of Understanding with two other federal entities to improve efficiencies and share expertise.

• Canadian Transportation Accident Investigation and Safety Board – Coordination of activities with respect to occurrences, including investigation procedures and practices and requirements for reporting occurrences, and providing for conflict resolution procedures – August 2011
• Transport Canada – Environmental Assessments for Project Applications filed under the National Energy Board Act – 30 January 2012
• Transport Canada – To promote marine security in areas under NEB jurisdiction – 9 February 2012

Canadians benefit from efficient energy infrastructure and markets

The NEB promotes efficient energy infrastructure and markets by regulating international and interprovincial pipeline and electrical transmission facilities, pipeline tolls and tariffs, and energy imports and exports. The NEB continually monitors the effectiveness and efficiency of its regulatory processes. One way the Board does this is through service standards that identify specific delivery timelines for key services. Meeting service standard targets consistently and with quality results reflects the NEB’s commitment to efficient and effective regulatory processes.

The basis of the NEB’s approach for authorizing exports is to ensure that Canadians have access to Canadian-produced energy commodities on terms and conditions at least as favourable as those available to export buyers. To evaluate this, the NEB monitors the market and reports on its findings. In 2011-12, Canadian market prices remained well connected to continental prices.

For natural gas and oil pipeline transportation systems to work well, there must be adequate pipeline capacity in place to move products to consumers who need them. Furthermore, pipeline companies must have adequate financial strength to attract capital on terms that allow them to build infrastructure, maintain their systems, and provide services at a reasonable cost. The NEB-regulated pipeline sector in 2011-12 was financially sound. Credit ratings continued to be investment grade and companies which raised capital did so on reasonable terms.

Lessons Learned

Results from the 2011 Landowner Survey are being used to help shape the NEB’s ongoing Safety and Environment Action Plan initiative. As part of the plan, the NEB is in the process of making a regulatory change clarifying the Board’s expectation that companies follow a management system approach for programs related to safety, security and environmental protection. This approach is being used throughout the lifecycle of a pipeline system. To enhance our communications with stakeholders, the NEB is working to restructure its website in order to make information easier to find. However, because only 37 per cent of landowners reported having access to the Internet at this time, the NEB will enhance its direct communication with stakeholders and will continue to seek their input through the Land Matters Group Initiative. The NEB is also working to make publications easier to understand by reviewing and revising its materials and making changes where necessary.

Notwithstanding the safety record of NEB-regulated pipelines, the Board has noticed an increased trend in the number and severity of incidents being reported by NEB-regulated companies in recent years. Part of the trend is related to improved reporting on the part of regulated companies. The Board introduced new leading performance measures that support the use of management systems by the pipeline industry for anticipating, preventing, managing and mitigating issues that can affect safety, security and environmental protection. The requirement to report on the new performance measures is in addition to current reporting required under the Onshore Pipeline Regulations, 1999 and the Pipeline Crossing Regulations, Part I and Part II. This is a component of the broader Action Plan on Safety and Environmental Protection that helps address the desire that Canadians have for more information on what the NEB is doing to ensure companies are complying with our requirements and being held accountable.

The NEB met 16 of the 21 regulatory service standards. Where the Board did not meet its service standard targets, the processes and resource allocations were reviewed to ensure future success.

Program Activity: Energy Information Program

This program provides the Board, industry, policy makers, and the Canadian public with energy industry and market surveillance, including the outlook for supply and demand of energy commodities in Canada, to assist in decision making regarding energy infrastructure and markets. This program informs Canadians on energy market developments and issues related to the Board’s regulatory mandate, which are primarily in the gas, oil and electricity market sectors, and under Part VI of the NEB Act by providing market analysis to determine whether Canadians are able to access energy at fair market prices.

Performance Summary and Analysis of Program Activity

The NEB collects and analyzes information about Canadian energy markets through regulatory processes and market monitoring in order to support the Board’s regulatory program, and to provide public information that helps policy makers, industry and Canadians make better decisions.

The Energy Information webpage had over 520,000 web hits in 2011-12, a ten per cent increase over the previous year. During the year, the NEB published and distributed three Energy Market Assessments; two Energy Briefing Notes; two Energy Facts reports and Winter and Summer Energy Outlooks. Of note, the NEB published Canada’s Energy Future: Energy Supply and Demand Projections to 2035, which received extensive media coverage by traditional and social media outlets following the report’s release.

Lessons Learned

In 2011-12, the Energy Information Program (EIP) continued to provide timely and relevant energy information to Canadians. The program focused on developing key products that would best meet the needs of Canadians. Three planned products, the 2012 Energy Futures Conference, Top 10 Stories 2011, and the Crude Oil Supply Costs Energy Briefing Note did not proceed in recognition of workload pressures. The Energy Futures Backgrounder was rescheduled for release in 2012-13.

Further, the EIP is focusing efforts on redesigning its webpage. The goal is to ensure that the program continues to effectively inform the public and government on key energy matters in a clear, concise and easily accessible way.

Program Activity: Internal Services

Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

Performance Summary and Analysis of Program Activity

The NEB’s Internal Services program requires sound business management and effective decision-making to ensure that the organization has the people, business processes, technologies, facilities and financial resources available to carry out its mandate.

The NEB continued to strengthen operations thereby ensuring it remains a flexible and efficient organization able to meet new and ongoing priorities.

• The Regulatory Leadership Group developed a new framework, the Regulatory Resourcing Framework, to better manage resources on regulatory matters including hearing and non-hearing applications, compliance verification activities, regulation work and more.
• The NEB updated its People Strategy with people-related priorities including work-life balance, engagement and leadership.
  • The Talent Management Framework was finalized and implemented. Key elements under the framework are learning and development.
  • Respectful Workplace Training was completed by the majority of NEB staff, leaders and Board Members.
  • Steps to integrate the Board’s strategic and business planning processes into a Human Resources plan are underway.
• There was continued success in creating a positive work environment.
  • The NEB was named one of Canada’s Top 100 Employers for 2011.
  • Internal work-life balance survey results were positive.
• Monitoring and reporting of corporate performance was enhanced by the adoption of a quarterly balanced scorecard.

Lessons Learned

While a Human Resources plan is an essential management tool, it also provides transparency for staff regarding the organization’s staffing plans, how staffing will be conducted, and potential career or developmental opportunities. Further, management initiatives such as integrated planning and the Regulatory Resourcing Framework provide the NEB with the information and flexibility it needs to operate efficiently.

Date modified:

2020-09-29