ARCHIVED – National Energy Board – 2013-14 Departmental Performance Report – Section II: Analysis of Program(s) by Strategic Outcome

Section II: Analysis of Program(s) by Strategic Outcome

Strategic Outcome

The regulation of pipelines, power lines, energy development and energy trade contributes to the safety of Canadians, the protection of the environment and efficient energy infrastructure and markets, while respecting the rights and interests of those affected by NEB decisions and recommendations.

Program 1.1: Energy Regulation

Description

This program provides the regulatory framework under which the NEB carries out its mandate and achieves part of its strategic outcome. Specifically, it enables Canadian federally regulated energy infrastructure to be developed and supervised throughout its lifecycle. The regulatory framework includes components such as setting expectations for industry and others, monitoring and enforcing compliance with requirements, measuring performance of the NEB’s regulatory framework and focusing on continual improvement. The authority for this program is derived from the NEB Act, COGOA, the CPRA, the Canada Labour Code and other associated regulations and guidelines. Energy regulation provides Canadians with safe, reliable and efficient energy supply.

Performance Analysis and Lessons Learned

In support of the expected result for the Energy Regulation Program, regulated activities are conducted in accordance with regulatory requirements, the NEB completed all actions set out in the Safety Action Plan by holding the Safety Forum in June 2013 in Calgary, which provided an opportunity for the NEB to advance critical topics around safety and environmental protection between regulators, the public and industry. Stemming from the discussion, the NEB committed to concrete actions it will take in order to move industry, and itself, forward in achieving the goal of zero incidents. These commitments included:

• Undertaking a public consultation on safety culture in order to develop a clear definition, attributes and indicators;
• Developing guidance intended to improve the prevention of catastrophic events;
• Improving how Canadians get the regulatory information they want and need;
• Setting a path for continual improvement through collaboration with other regulators, and reporting on safety and enforcement tools the Board has recently implemented such as AMPs.

Subsequently, the Board released a discussion paper titled Advancing Safety in the Oil and Gas Industry: Draft Safety Culture Framework and sought comments from the public and industry on the discussion paper. Substantive feedback was received from various stakeholders and these perspectives informed the final version of the document, which is scheduled for release in early fiscal 2014/15.

In 2013-14, the NEB continued to implement changes to the NEB Act resulting from changes to the Jobs, Growth and Long-term Prosperity Act and also took action with respect to Red Tape Reduction initiatives. Details of these actions are provided under the sub-program sections that follow. Other activities that supported the achievement of the expected result for the Energy Regulation Program are also detailed below under sub-program results.

Sub-Program 1.1.1: Energy Regulation Development

Description

This sub-program provides the energy sector and affected stakeholders with the regulatory expectations required for the development and operation of energy infrastructure and for oil and gas exploration and development activities in frontier and offshore areas. The NEB develops and communicates regulations, guidance materials and related processes to ensure its regulatory expectations are clear and useful. The NEB actively seeks opportunities for improvement through amendments to regulations and guidance, non-mandatory goals and guidance, and other direction provided from time to time.

Performance Analysis and Lessons Learned

In support of a comprehensive regulatory framework, the NEB:

• Clarified management system requirements under the NEB Onshore Pipeline Regulations, 1999, which were amended in April 2013. The amended Onshore Pipeline Regulations (OPR) clarified that companies must apply their management systems to all activities involving the design, construction, operation or abandonment of a pipeline, and to protection programs for safety, environment, integrity, pipeline crossings, public awareness, emergency management and security. Companies are now also required to appoint an accountable officer who has the appropriate authority over the company’s human and financial resources to enable the company to meet safety, security and environmental protection obligations.
• Clarified damage prevention requirements under the NEB Act: a Notice of Proposed Regulatory Change was posted for public comment in November 2013, and drafting instructions provided to the Department of Justice. A comprehensive Canada Standards Association Damage Prevention Standard is targeted for public consultation in fiscal 2014-15.
• Revised import and export application regulations: conducted external consultations on Part VI of the NEB Act (Oil and Gas Regulations), Export/Import Reporting Regulations, Electricity Regulations and Toll Information Regulations; drafting of regulations is underway by the Department of Justice.
• Developed and implemented a system of AMPs, allowing the Board to issue financial penalties on companies or individuals for non-compliance with the NEB Act, regulations, decisions, permits, orders, licenses or certificate conditions intended to promote safety or environmental protection.
• Clarified expectations of regulated companies for exploration and development activities through development of guidance. Proposed amendments to the COGOA and CPRA were also introduced in the Energy Safety and Security Act (Bill C-22), which, if passed, will involve changes related to financial liability and responsibility, transparency, enforcement, cost-recovery, as well as the use of spill treating agents.
• Standardized oversight tools to verify and to compel company compliance during exploration and development activities through improvements to the NEB compliance verification program.

Sub-Program 1.1.2: Energy Regulation Implementation, Compliance Monitoring and Enforcement

Description

Through this sub-program, the NEB makes informed decisions and recommendations on issues and applications related to energy development, energy infrastructure, energy transportation, energy trade and related activities. As an independent regulatory tribunal, the NEB actively involves those affected by its regulatory decisions through public hearings and other engagement activities.

Through risk informed compliance verification activities, the Board enforces compliance with regulatory requirements and expectations such as those set out in the terms and conditions of approvals. The NEB conducts its monitoring and enforcement activities under seven compliance protection programs: integrity, emergency management, safety management (which includes damage prevention), finance and economics, respecting rights and interests, security, and environmental protection. Through monitoring and enforcement, the NEB holds regulated entities accountable for results in the Canadian public interest. The public interest is inclusive of all Canadians and refers to a balance of economic, environmental and social considerations that changes as society’s values and preferences evolve over time.

Performance Analysis and Lessons Learned

In support of fair and transparent application assessments and timely application assessment, the NEB:

• Monitored time limits and used enhanced tracking tools for applications;
• Implemented efficiencies in processing applications to ensure legislated time limits are met;
• Enhanced processing of export and import applications to address amendments in Part VI of the NEB Act contained in the Jobs, Growth and Long-term Prosperity Act;
• Used the Land Matters Group to provide input into regulatory matters; and
• Continued to develop trust and credibility among Northerners and Northern institutions through continued engagement: over 50 meetings have been held over the year across the North to explain the Board’s role, hear concerns around oil and gas exploration and development, and to receive feedback on NEB guidelines meant to clarify expectations of regulated companies.

In support of holding regulated companies accountable for results in the Canadian public interest, the NEB:

• Increased the planned number of inspections conducted per fiscal year from 100 to 150 (and exceeded this by conducting 153);
• Doubled the number of audits conducted per fiscal year from 3 to 6;
• Held companies accountable for the effectiveness of their management systems using compliance verification tools and the requirement for companies to report leading and lagging performance indicators related to their safety, integrity, environmental protection, crossings, public awareness, emergency management and security programs;
• Provided industry with information to improve performance on a company-by-company basis through six management system audits and 73 compliance meetings with companies;
• As result of compliance verification activities, the NEB issued 21 active safety orders that are used to impose preventative measures to ensure the safety of workers and the public and/or to protect property and the environment; and
• Improved the development of data collection and analysis to facilitate public access to information and public reporting on safety and environmental performance.

Program 1.2: Energy Information

Description

Under this program, the supply, demand, production, development, transmission and trade of energy are analyzed to ensure the requirements of Canadians are appropriately met. Advice is provided on energy issues of interest. The Board uses energy information to inform its regulatory decisions and to produce publicly available assessments of energy trends, events and issues that may affect Canadian energy markets and the supply and demand for energy.

Performance Analysis and Lessons Learned

The Board continued to monitor developments in energy markets, gather and publish energy market statistics and publish analyses to inform Canadians on energy markets. The market monitoring program includes focused analysis on the functioning of energy markets and the ability to meet domestic energy needs, enhanced coverage of the changing North American energy landscape, and innovative and engaging delivery to targeted audiences. The NEB continued to make energy information products more accessible to Canadians by reducing the length of reports, incorporating technical material into appendices and providing content in electronic format.

• In 2013-14, the Board published two significant energy information products: Canada’s Energy Future 2013: Energy Supply and Demand Projections to 2035, a comprehensive report which examined trends in Canadian energy supply and demand; and, Short-term Canadian Natural Gas Deliverability 2013-2015, which examined trends in the discovery and development of Canadian natural gas resources.
• Canadian Energy Dynamics 2013, a report which assessed key elements in Canada’s energy markets, and how these elements changed in 2013, was also published. The report includes insight, statistics and regional descriptions that frame these developments over the last year. Of note, the Business News Network (BNN)^[7] stated that this report “provides investors with the clearest look to date of what happened in Canadian oil and gas production and transportation last year.”
• A joint assessment by the NEB, the British Columbia Oil and Gas Commission, the Alberta Energy Regulator, and the British Columbia Ministry of Natural Gas Development was released: The Ultimate Potential for Unconventional Petroleum from the Montney Formation of British Columbia and Alberta. The Montney’s marketable unconventional gas resource is one of the largest in the world and by combining this estimate with prior assessments the total ultimate potential in the Western Canada Sedimentary Basin has more than doubled.
• The Board completed its series of seasonal energy outlooks, which focused on shorter-term energy forecasts, and also released the annual Canadian Energy Overview, which looked back on 2012 and reviewed the year’s energy markets in an abridged form of previous editions of this energy information product.

Internal Services

Description

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 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 Analysis and Lessons Learned

To ensure the NEB has the capacity to effectively deliver its mandate, the NEB:

• Promoted strategic management practices by implementing the 2013-16 People Strategy, which focused on attraction and retention. As part of the People Strategy, the NEB applied for and was named one of Canada’s Top 100 Employers for the fifth time, and one of Canada’s Top Family-Friendly Employers and Alberta’s Top Employers for 2014.
• Continued to support good management practices and focused on employees working directly or indirectly on regulatory matters, including hearing and non-hearing applications, compliance verification activities, regulation work, and energy information program. This year, the NEB continued to measure workload and progress towards its priorities via formal quarterly reports to ensure resources are being used in the most effective way, while maintaining a healthy and productive work environment.
• Strengthened the Board’s integrated planning process to better link financial and human resources allocations to activities and outcomes. The Integrated Business Plan enabled leaders in aligning business unit initiatives with what matters most. As the year evolved and priorities changed or emerged, the plan offered a foundation from which priorities have been adjusted and resources realigned, while managing work-life balance at the NEB. The Integrated Business Plan captures our strategic priorities, key corporate risks, key focus areas and drivers, and links them to our planned activities for the fiscal year.
• Strengthened the Board’s risk management processes and their integration with strategic planning. The NEB has a formal Integrated Risk Management Policy in place, and an environmental scan, risk identification and risk assessment is completed annually. The status of risks and mitigation activities identified in the Corporate Risk Profile are reviewed quarterly.
• With the expiry of the previous office lease, prepared for the relocation of the NEB’s Calgary office in June 2014 to avoid any business interruption.

Date modified:

2020-09-29