ARCHIVED – National Energy Board – 2014-15 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, 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

The NEB maintains continual regulatory oversight throughout the lifecycle of any facility it regulates – from project proposal to construction and operation and through to the end of its use.

In 2014-15, the NEB continued performing towards the expected result for the Energy Regulation Program, regulated activities are conducted in accordance with regulatory requirements. Capitalizing on the momentum generated by the 2013 Safety Forum, the NEB identified several key actions supporting the common goal for the NEB and industry of zero incidents.^{Footnote 7} Performance against these key actions is described below. Activities also support the organizational priority: continual improvement of safety and environmental outcomes.

• In 2014-15, the NEB conducted 335 compliance verification activities (including inspections; management system audits; emergency exercise evaluations; emergency procedure manual reviews; compliance meetings to check corrective actions progress; and reviews of post-construction monitoring reports). This is an increase from 282 compliance activities the prior year. The number of inspections increased as well, to 192, up from 153 in 2013-14. Six audits were also completed this year.
• In June 2014, the NEB released expectations for the oil and gas industry to build and sustain a positive safety culture. Together with the Canada-Nova Scotia Offshore Petroleum Board and the Canada-Newfoundland and Labrador Offshore Petroleum Board, the NEB released a joint statement and framework on safety culture. Advancing Safety in the Oil and Gas Industry – Statement on Safety Culture^{Footnote 8} in this framework as “the attitudes, values, norms and beliefs, which a particular group of people shares with respect to risk and safety”. The framework details characteristics and attributes of safety culture.
• Continuing this effort, the NEB engaged with stakeholders, subject matter experts, and other parties:
  • The Board led the creation of a North American Regulators Working Group on Safety Culture, to collectively advance and coordinate regulatory initiatives and outreach related to safety culture. This includes developing safety culture indicators for regulators to determine potential cultural hazards and industry best practices. The NEB will evaluate how to best integrate a select number of these indicators into its compliance verification activities, with the ultimate goal of reducing incidents.
  • The Western Regulators’ Forum (WRF) brings together the NEB with the Alberta Energy Regulator, the British Columbia Oil and Gas Commission, and the Saskatchewan Ministry of the Economy. The WRF promotes collaboration and pursues mutual priorities amongst oil and gas regulators in Western Canada. This collaboration includes several working committees, one of which will specifically work on pipeline performance measures.^{Footnote 9} Pipeline performance measures challenge regulated companies to examine how they manage risks associated with their operations, promote continual improvement, and set the stage to better assess safety culture. They are a key component in enabling pipeline companies to achieve the Board’s stated goal of zero incidents on its regulated pipelines. Over time, additional trend information will be available to the Board to enhance NEB compliance verification planning.
• The NEB reviewed and updated hearing and non-hearing application processes, including systems used to support those processes:
  • The NEB enhanced the Application to Participate (ATP) system during the year to build a new Participation Portal, which allows hearing intervenors and commenters to organize, submit and view information related to their hearing participation, in a centralized online system.
  • Updates to the Online Application System (OAS) addressed filing deficiencies for non-hearing applications submitted online, and provided clarity to applicants in filing concise, relevant information.
  • Public participation is an important part of every National Energy Board hearing, and the NEB added to its suite of online videos to help the public learn about NEB processes. This year, the NEB added videos specific to the ATP process and how the NEB responds to emergencies.
  • The NEB also revised the language used in Frequently Asked Questions regarding Liquefied Natural Gas Export Licence Applications, to ensure readability and accessibility for Canadians.
• The NEB developed its regulatory information and analysis function to feed high quality, evidence-based regulatory information and data into risk-based compliance verification planning to improve our regulatory performance. The NEB is building on this foundation to increase its focus on root cause and systemic issues. In turn, this will result in targeted, more proactive compliance verification.

Going forward, the NEB will continue to promote safety culture and collaborate with other agencies on this important area of focus. The organization will continue to improve data systems, to ensure efficient access to accurate information in support of regulatory decisions. The NEB has begun work to further enhance its compliance planning risk model and to provide inspectors with better processes and tools in the field. These tools will enable more efficient collection of inspection data and enable posting of inspection-related information.

Other activities that supported the achievement of the expected result for the Energy Regulation Program are detailed under the following 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 lands and offshore areas as defined in s.3 of COGOA. 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

Changes to the NEB Act, other applicable federal legislation and consequential regulations must be implemented. These changes in regulations are either required by legislation or are identified gaps and issues in the NEB regulatory framework. Changes to relevant acts and regulations have to be implemented in the NEB processes to provide staff and stakeholders with updated, accurate and relevant regulatory guidance. Regulatory improvement plans are adjusted to accommodate legislative amendments and proposed regulations from the Government of Canada, which may impact the NEB’s areas of responsibility.

In support of a clear and pragmatic regulatory framework, the NEB completed various key activities, as described below. Activities also support the organizational priorities: a robust regulatory framework for the North, and a flexible and efficient organization able to meet new and ongoing priorities.

• The NEB continued to implement consequential legislative and regulatory changes:
  • The Energy Safety and Security Act (ESSA, or Bill-C22) received Royal Assent in February 2015. The Act amends COGOA and provides the NEB with new tools for regulating Northern oil and gas activities in the public interest. The NEB has begun work with federal and provincial partners to develop the relevant regulations. The provisions of the ESSA will be brought into force by 26 February 2016.
  • In December 2014, the Minister of Natural Resources introduced the Pipeline Safety Act (Bill C-46), which sought to amend the NEB Act and, to a lesser extent, the Canada Oil and Gas Operations Act (COGOA). The Bill has received Royal Assent, and the Act will come into force June 2016. The Pipeline Safety Act will have implications for the NEB’s responsibilities, and a plan has been put into place to implement changes.
  • Development of application assessment procedures for COGOA applications, that will permit the involvement of the public as well as create more transparency on the records created throughout the application assessment process, is ongoing.
  • The NEB’s Forward Regulatory Plan is a public list of anticipated regulatory changes that the NEB intends to bring forward over the next two years. This plan is adjusted and updated over time as our operating environment also changes over time. It also identifies public consultation opportunities and a departmental contact point for each regulatory initiative. Progress was made on planned regulatory projects for 2014-15, including Damage Prevention Regulations amendments, Regulations Amending the NEB Export and Import Regulatory framework, and the NEB Rules of Practice and Procedure.
• The NEB continued modernizing the regulatory framework for the North, in partnership with relevant federal and provincial government departments and regulators to maintain the highest standards for operational safety and environmental protection. The NEB continued to actively support the Frontier and Offshore Regulatory Renewal Initiative (FORRI)^{Footnote 10}, which is working to renew and modernize the regulatory framework governing Canada’s North and offshore oil and gas exploration and development.
• The NEB updated filing requirements and guidance to clarify expectations of companies, and share how the public can get involved in NEB processes in the North. This year the NEB released updates to the Filing Manual, the Filing Requirements for Offshore Drilling in the Canadian Arctic, and developed Filing Requirements for Geoscience Programs, which will be available in 2015-16.
• The NEB and GNWT signed a Service Agreement to allow the NEB to provide technical services and advice to support the GNWT’s regulatory functions for oil and gas projects, and transfer records post-devolution.
• The NEB engaged Northerners and Northern institutions that may be affected by potential activities regulated by the NEB:
  • The NEB Chair and CEO, along with technical staff, attended the Nunavut Oil and Gas Summit, NWT Board Forum and Arctic Oil and Gas Symposium. The NEB met with Nunavut and NWT Premiers, the NWT Minister of the Environment, and the Minister responsible for the NWT Public Utilities Board. The NEB also met with the Qikiqtani Inuit Association, Nunavut Impact Review Board, NWT Office of the Regulator of Oil and Gas Operations, Nunavut Tunngavik Inc., Inuit Tapiriit Kanatami, the Northern Projects Management Office, and the Nunavut Wildlife Management Board.
  • Community and institutional engagement related to Same Season Relief Well (SSRW)^{Footnote 11} technical proceedings (with respect to proposed Beaufort Sea drilling programs by Imperial Oil Resources Ventures Limited and Chevron Canada Limited^{Footnote 12}) was also an important focus of northern engagement this year.
  • Staff continued to work with key players to improve preparedness in the event of an emergency incident in the North. This included collaboration with the Environmental Impact Review Board and offshore Boards, and regional, national and international spill response agencies.

Going forward, the NEB will continue to improve its existing regulatory framework, while preparing for legislative and regulatory changes that will take effect in 2016.

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.

The Board verifies and enforces compliance with regulatory requirements and expectations such as those set out in the Board regulations, and terms and conditions of approvals. The NEB conducts its monitoring and enforcement activities under eight regulatory implementation programs: integrity, emergency management, safety management, damage prevention, financial regulation, 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. This program uses funding from the following transfer payment: National Energy Board Participant Funding Program.

Performance Analysis and Lessons Learned

The NEB’s regulatory activities (e.g., application assessment, compliance and enforcement) and associated planning and reporting are risk-informed and driven by analysis of data and information collected from different activities. Analysis of accurate and relevant information can help the NEB identify industry trends and inform NEB application assessment, compliance verification and enforcement processes. Through these efforts, the NEB holds regulated companies accountable for results in the Canadian public interest.

In support of fair and transparent application assessment and timely application assessment, the NEB completed key planned activities as described below.

• The NEB continued to monitor, and meet, time-limit commitments. Of note this year, TransCanada submitted their application for the Energy East Pipeline Project. The NEB’s review of this project will examine the longest proposed pipeline project in the Board’s history. Additionally, the Trans Mountain Expansion (TMX) Project review is one of the most comprehensive in the NEB’s history, with 400 intervenors. The Board recognizes that Aboriginal peoples have an oral tradition for sharing stories, lessons, and knowledge from generation to generation. For this reason, the NEB welcomed the inclusion of oral Aboriginal traditional evidence during the Trans Mountain hearing.
• Through the Board’s Enhanced Aboriginal Engagement initiative, the NEB proactively contacted over 400 Aboriginal groups that may be affected by proposed projects, and assisted Aboriginal groups in participating in the NEB’s regulatory process.
• The NEB provided Process Advisors to support the public and Aboriginal groups who are participating in public hearings. The NEB also offers online information sessions to provide an overview of the application to participate and hearing processes.
• There were no successful judicial appeals related to fairness or legal principles regarding NEB decisions.
• The NEB continued to administer participant funding, which provides financial assistance to intervenors in the NEB's oral hearing process for facilities applications. Funding is available for individuals, Aboriginal groups, landowners, and non-industry not-for-profit groups who seek to intervene.
• The NEB continued to ensure readiness for potential large-scale construction projects.

In support of holding regulated companies accountable for results in the Canadian public interest, the NEB completed several key planned activities. These actions help to further minimize the probability that an incident at a regulated company could result in a fatality and/or significant environmental damage. Activities also support the organizational priorities: continual improvement of safety and environmental outcomes, and a flexible and efficient organization able to meet new and ongoing priorities.

• The NEB streamlined how it collects information on reportable events, by directing all regulated companies to report events, including incidents and unauthorized activities, using the newly developed Online Event Reporting System (OERS). The Transportation Safety Board of Canada also directed regulated pipeline companies to report events using this system. OERS will ensure that both entities are able to access information for all reported events and significantly reduce the regulatory reporting burden on companies. The NEB also provided additional guidance to companies regarding incident reporting (NEB Event Reporting Guidelines). Several companies have noted that OERS is easy to use and has made the reporting process clearer. The system is a significant process improvement, making data readily available to NEB analysts for use in compliance planning.
• The NEB continued to use input from Canadians, for example, via the Land Matters Group (LMG), to inform NEB initiatives. The LMG is a multi-stakeholder advisory group consisting of members of the public, industry and Aboriginal groups who have a vested interest in land matters and who are impacted by the activities of companies that are subject to NEB regulation. Of particular importance was the LMG Steering Committee’s input this year into the brochure Administrative Monetary Penalties: Information for Landowners. The NEB also heard feedback from the group about accessibility of regulated company emergency response plans.
• Throughout the year, the NEB proactively offered easily accessible regulatory information on safety, environmental protection and energy markets:
  • The online Safety Performance Portal^{Footnote 13}, is updated quarterly and presents key safety and environmental protection data collected by the NEB as a part of its work to hold companies accountable for positive outcomes in these areas.
  • Internal development of the NEB’s first online interactive Pipeline Incident Map was completed by 31 March 2014 and launched externally shortly thereafter. Updated quarterly, this tool offers Canadians the opportunity to easily view all pipeline incidents in Canada since 2008.
  • The redesigned Energy Information section of NEB’s website improves accessibility with a more user-friendly interface. This section of the NEB website now includes energy Market Snapshots, an online Energy Conversion Calculator, and streamlined access to energy commodity statistics and analysis.
  • The NEB improved analysis of data and regulatory information to enhance safety and environmental performance reporting.
• The NEB expanded engagement activities about regulatory requirements to maintain pipeline safety:
  • To proactively promote appropriate damage prevention^{Footnote 14} practices, NEB staff made presentations and provided exhibits at several stakeholder meetings focused on excavator and contractor stakeholder groups.
  • Staff presented to the Canadian Energy Pipeline Association and Canadian Association of Petroleum Producers regarding proposed amendments to the Pipeline Crossing Regulations.
  • The NEB participated in Canadian Common Ground Alliance (CCGA)^{Footnote 15} regional partner meetings in four provinces.
  • In the fall of 2014, the NEB participated in the CANUSNORTH^{Footnote 16} discussion-based tabletop exercise for a well control incident scenario in the Canadian Beaufort Sea.
  • In January 2015, the NEB announced plans to open regional offices in Vancouver and Montreal to better connect with communities and build relationships with regional public and local institutions, landowners and Aboriginal groups. In addition to better connecting with communities and building relationships, our presence in these regions will broaden our ability to communicate about regulatory requirements and pipeline safety.

The NEB released its summary report in November 2014 on Pipeline Performance Measures, to promote continual improvement in the management of pipelines.^{Footnote 17} Pipeline performance measures cover key activities in the programs required by the NEB as part of an effective safety management system:

• Safety management
• Security
• Emergency management
• Integrity management
• Environmental protection
• Damage prevention

The initial reporting cycle has proven the feasibility of collecting this information. The NEB expects that it will take at least three annual reporting cycles to identify meaningful trend information, however, the NEB will immediately begin using the performance data to inform future compliance verification planning. The NEB is also looking at ways to simplify and streamline collection of this information, along with other data collected from regulated companies. Communicating public safety and enforcement actions will be a priority going forward.

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 NEB’s energy information products offer neutral, independent, fact-based analysis to Canadians, and increase the transparency of Canadian energy markets. The NEB strengthened its reporting on the functioning of markets, assisting Canadians to more fully appreciate evolving market issues and emerging energy trends important to the context within which the Board makes its regulatory decisions. In support of the expected program result, Canadians access energy related analysis and information, the NEB performed against planned activities as described below.

• The NEB continued to monitor developments in energy markets, gather and publish energy market statistics and publish analyses to inform Canadians on energy markets. In 2014-15, the following energy information products were published:
  • Canadian Energy Dynamics: Review of 2014 (Energy Market Assessment) : An assessment of important developments witnessed in Canadian energy markets in 2014.
  • Assessment of Discovered Conventional Petroleum Resources in the Northwest Territories and Beaufort Sea (Energy Briefing Note): This report summarizes the conventional petroleum resources estimated in the two regions based on probabilistic methodology and supported by petroleum estimates and data at a reservoir level.
  • Canadian Pipeline Transportation System (Energy Market Assessment): This report provides information about the major pipelines regulated by the Board, and assesses the economic functioning of the pipeline transportation system.
  • Propane Market Review: Final Report to the Minister of Natural Resources and the Minister of Industry (a joint report by the NEB and Competition Bureau): The Ministers of Natural Resources and Industry requested that the National Energy Board and Competition Bureau work together to review propane market issues. This report provides a detailed analysis of the overall propane market in Canada.
  • Short-term Canadian Natural Gas Deliverability 2014-2016 (Energy Market Assessment): This report examines the factors that affect natural gas supply in Canada in the short term, and presents an outlook for Canadian natural gas deliverability from the beginning of 2014 to the end of 2016.
  • Canadian Energy Overview 2013 (Energy Briefing Note): The eighth edition of this report provides basic data on Canadian energy supply and markets. It complements the report Canadian Energy Dynamics 2013.
  • Market Snapshots: Introduced in October 2014, these regular energy information updates illustrate emerging trends in various segments of the energy market. They provide concise, topical energy information to Canadians in a timely fashion. Snapshot topics included the impact of low oil prices, a review of Canadian LNG projects in the global market, and declining solar panel costs, among many others.
• The NEB continues to publish accurate and timely energy statistics. In 2014-15, the NEB added to its suite of energy statistics, publishing quarterly data on Canadian crude oil exports by rail.
• The NEB continued to provide current market analysis for energy infrastructure-related applications before the Board, to support our regulatory decisions.
• The NEB enhanced its external website to improve access and create an energy information portal for Canadians. The redesigned Energy Information section of the NEB’s website now offers a more user-friendly experience. Along with the new energy Market Snapshots series described above, this section of the NEB website now includes:
  • an online Energy Conversion Calculator: this tool enables the user to convert electricity, natural gas, oil and other energy terms from one unit of measure to another, quickly and simply;
  • Interactive market and trade graphs that enable website visitors to filter data and view the information they need;
  • A rotating series of “Did You Know” facts about Canadian energy;
  • Quick links to provincial, Canadian, American and international energy agencies and associations; and
  • A streamlined interface that improves access to energy commodity statistics and analysis.

The NEB integrated several of these online features into the Energy Information section of the website based on public feedback received in prior years. The content has been shaped to promote improved awareness of Canadian energy information. Going forward, the NEB will leverage Government of Canada Open Data initiatives to further improve Canadians’ access to energy information.

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 Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not those provided to a specific program.

Performance Analysis and Lessons Learned

Significant increases in workload due to multiple major facilities applications resulted in additional funding requirements and the need for proactive staffing. In addition, increased national and international interest in NEB activities and the increased profile of and interest in pipeline activity across Canada required proactive communication practices to ensure Canadians had accurate and relevant information about the NEB and NEB-regulated facilities.

In support of a flexible and efficient organization able to meet new and ongoing priorities, the NEB completed key activities as described below.

• The NEB enhanced communication with Canadians throughout the year, through strategic communications, including proactive information sharing and web presence.
• The NEB Chair and CEO embarked on a National Engagement Initiative, in order to hear firsthand about how the Board can improve its approach to safety and environmental protection. The Chair and CEO, along with technical staff, visited each province and the North, and met with municipal and provincial leaders and staff, Aboriginal organizations, environmental groups, first responders and academics, as well as professional and industry organizations. Talking to Canadians from coast-to-coast, the NEB shared information about its lifecycle approach to regulation, the hearing process, landowner rights and environmental protection, and emergency preparedness, while seeking to better understand regional energy matters.
• The NEB modernized its external website to make information easier to find. Now, regulatory oversight programs, decisions, recommendations and performance records of regulated companies are clearly visible. The NEB improved accessibility for users who require assistive technologies, and created an interface that adapts to mobile device screen sizes. The website also incorporates in-page search capability, and interactive energy market and trade graphs.
• The NEB launched an online discussion forum that is open to anyone who wants to share views about pipeline safety and environmental protection.
• The NEB announced and executed plans to open regional offices in Vancouver and Montreal, to better connect with communities and build relationships with regional public and local institutions, landowners and Aboriginal groups.
• Structurally, the NEB elevated the importance of its proactive communication initiatives through a strategic communications unit, with a renewed emphasis on public affairs and media relations.
• The NEB has taken a “detect and correct” approach to ensure media coverage accuracy.
• The NEB continued to implement attraction and retention strategies including promoting work-life balance that works for each person, providing engaging work in the national public interest, and supporting professional development. The NEB is a supportive and inclusive workplace underpinned by a strong culture of values. The NEB was again named as one of Canada’s Top 100 Employers this year, becoming a six-time winner of this honour. The organization was also named one of Canada’s Top 100 Family Friendly Employers. These acknowledgements speak to the programs offered to employees, which in part help to retain them.
• The NEB seamlessly relocated its head office to a new building, and transitioned to an open and modern workspace. The move to a new building was well planned and executed to minimize business disruptions. Information technology services and tools were enhanced to support Workplace 2.0 objectives.
• The NEB implemented a modern unified threat management system strengthening the security of NEB’s information technology network.
• The NEB established service standards and performance measures for key internal services. The NEB measured client satisfaction in the areas of time to staff, time to contract, email system availability, service desk response times, media response times, and video conferencing user satisfaction. Cumulative performance targets were met and targets have been raised for 2015-16.
• The NEB adopted the GC Shared Travel Services (STS) solution/portal for travel management. STS provides for greater accountability, visibility, and transparency of travel expenditures.
• Information management and information technology strategies were implemented to support regulatory and business processes. Our approach to data capture, storage, analysis and dissemination continued to evolve. This year, the NEB:
  • Modernized the NEB external website;
  • Enhanced the ATP and OAS systems, and developed the NEB’s first interactive Pipeline Incident Map;
  • Streamlined information collection on reportable events, using the newly developed Online Event Reporting System (OERS); and
  • Leveraged the use of web conferencing technology to compliment face-to-face meetings in the application engagement process and reach a broader range of stakeholders.

The NEB will continue to focus on improving tools, processes and systems to support regulatory reporting, analysis and measurement. The organization will also align resource planning processes and systems with Government of Canada-wide standards.

Departmental security plans continue to be updated and this area of focus remains a priority at the NEB.

Date modified:

2024-01-11