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The Canadian
Energy Pipeline Association (CEPA) represents
companies that transport 97% of the
oil and natural
gas produced in Canada to markets
throughout North America. CEPA’s member
companies
currently
operate more than 100,000 km of
pipelines, transporting oil and natural gas
that contribute
$55 billion to the Canadian economy each
year. These energy highways are
essential for heating homes, generating
electrical power, and meeting the needs
of North American consumers for a
secure reliable
supply of
energy. CEPA is dedicated to
ensuring a strong and viable transmission
pipeline industry in
Canada in
a manner that emphasizes public safety
and pipeline integrity, social and environmental
stewardship,
and cost competitiveness.
In its
Economic Action Plan and subsequent
initiatives, the Government laid the
foundation for a stable Canadian economy during the
recent period of economic uncertainty and
hardship experienced in many parts of the world.
Budget 2011 indicates that the Government
has turned its attention toward a more long
term outlook. As stated in that
Budget, “As the private
sector moves ahead as the engine of
growth and job creation, the
Government will return its focus toward
sustainable actions that create the right
conditions for long‐term economic prosperity.”
Minister
Flaherty elaborated on this statement in
a recent speech, stating: “…our
economic focus is now shifting, from protecting
jobs and output to creating the right
conditions for more long‐term jobs and stronger
economic growth, all the while steadily
eliminating the deficit and returning to
surplus. The need to balance our books
is a lesson we must all heed.”[1]
CEPA’s pre‐Budget
submission this year focuses on recommendations
that will enable continued economic growth while
respecting government priorities and the
goal of fiscal restraint. For Budget 2012, CEPA makes
the following recommendations:
- For new pipeline projects:
- Continue reform of
regulatory processes to ensure that our
shared objective of
environmental protection is achieved through
timely, efficient and predictable processes
that allow investment to be made with
confidence.
- Focus on efficiency but retain
capacity within the Government to move
private sector projects
ahead
through the regulatory process, thus
enabling job creation and economic
development to
the
benefit of all Canadians.
- For existing pipelines:
- ensure regulatory
capacity and tools are in place
in order to safeguard critical
infrastructure
and communities, thus enabling the
significant national economic
interests
of reliable energy security and trade,
as well as safety and environmental
protection.
In recent
years, CEPA and its member companies
have been strong advocates of regulatory
reforms. We
have advocated for changes that ensure
private sector resource projects proceed in
a timely manner
through an
efficient, predictable, and fair regulatory
process while providing more effective
environmental
conservation and Crown consultation. These
recommendations stem from our industry’s
unique
position in the energy value chain,
where we build and operate energy
infrastructure across
international,
provincial and states line and experience
working within complex multi‐ jurisdictional
regulatory
frameworks.
Initiatives, such as the
creation of the Major Projects Management
Office (MPMO), changes to the Canadian
Environmental Assessment Act (CEAA), and new regulations
proposed under the Navigable Waters
Protection Act,
are all positive changes that have
begun to enhance private sector investment
conditions. More can and should be
done to continue these improvements, and
further initiatives should
be undertaken through Budget 2012.
CEPA’s
recommendations include a focus on the
need for regulatory capacity and for
the support for tools needed
to enforce it. Currently, renewal of
funding for several key programs is under consideration,
concurrently with the Government’s strategic
evaluation intended to introduce efficiencies
into programs and departmental funding
levels. Acknowledging these efforts, we
remind the
committee that these regulatory improvement
programs and functions enhance economic activity,
protect the environment through encouraging
private sector accountability, and allow
the public
interest to
be served by enabling good development
projects to proceed and by enhancing
safety during
operations.
Regulatory
improvement initiatives within government
complement existing programs undertaken by
the
Government, including the Red Tape
Commission and the US‐Canada Regulatory
Cooperation
Council and
are integral to achieving the goals
of the recently announced National Energy
Strategy.
CEPA believes that Budget
2012 offers the Government the opportunity
to enhance conditions that support private
sector investment in resource projects,
which in turn create jobs, strengthen the economy and
increase government revenues.
Projects with a capital
cost of approximately $100 billion are
currently in the federal system coordinated through the MPMO
process. The potential impact of this
level of investment in the Canadian
economy is significant
and critical to our economic future.
The key
elements for success are:
- continuing to make regulatory
improvements in the administration of
permitting, inspection
and
monitoring requirements while providing adequate
capacity to ensure environmental
standards
and laws are met; and
- advancing and
implementing legislative changes that will
update, improve and simplify
conservation
and protection of the environment.
Recommendation
1: Renew funding and mandate of MPMO
The Government
of Canada recognized the importance of
investing in regulatory capacity with the
creation of
the MPMO in 2007, and with additional
funding for a number of key
departments. CEPA recommends that MPMO’s
mandate and its funding be renewed
for a 3‐5 year period. With
this
renewed
mandate, the MPMO can continue its
work on regulatory coordination and Crown
consultation,
while advancing its whole‐of‐government
approach to consider broader legislative change that will have
a positive effect on how Canada does
business. A failure to adequately resource
regulators,
particularly those that are responsible for
enforcing onerous, permit‐oriented legislation,
will undermine
the timeliness of decisions, placing
investments and jobs at risk.
Recommendation
2: Integrate key environmental legislations
to improve regulatory performance
Several pieces
of legislation are crucial to project
development in Canada, including: the Canadian Environmental Assessment Act, the Fisheries Act, the Species at Risk Act, and the igratory Birds Convention Act. Initiatives ranging from
Parliamentary reviews to legislative amendments
to development
of regulations are planned for these
Acts in the coming year. An
updated framework for these pieces of legislation, developed
through the MPMO’s inter‐departmental
approach, would
enhance the conditions for economic
activity. CEPA believes that, with
the Government’s commitment to improvement through MPMO’s
oversight, these reforms should:
- integrate laws to achieve simpler
decision‐making processes and optimum
environmental
outcomes;
- direct resources where they have
greatest effect and ensure laws are
clearly focused on results
and better environmental protection
and conservation, not just process and
permits;
- support efficiencies
within government; and
- define effective
programs for Crown consultation with
aboriginal peoples.
Safety is
the top priority for pipeline companies
in all aspects of pipeline development
and operation,
and industry is prepared to take a
leadership role in these efforts. The
Government must ensure that
appropriate
regulatory capacity and tools are in
place to support this industry commitment
and to
safeguard
critical infrastructure and communities.
Together, these commitments will ensure that
Canada is successful in community safety,
environmental protection, trade, and security.
Extensive regulatory tools
exist today to support and address pipeline
integrity including construction standards,
maintenance, audits, and regulatory powers
for shut down and investigation.
However, Canada does not
currently have the means to require
and enforce the physical protection of pipelines from the
activities of others. Specifically, Canada
lacks the basic requirements for “call
before you dig”, and administrative penalties
for enforcement of rules when individuals
endanger the lives of others. Damage to
pipelines is on the rise, and
experience in other countries shows clearly
that lives are saved
where laws and enforcement are in place.
Recommendation 3:
Protecting Canadians from Unauthorized Activities
near Critical Underground
Utilities
Unauthorized
activities near pipelines are on the
rise in Canada. The National Energy
Board (NEB) is responsible
for oversight of pipeline safety in
Canada. To address this important issue,
the NEB requires enforcement tools and the capacity
necessary to safeguard communities from
unauthorized activities on pipeline rights‐of‐way.
NEB funding for safety experts to
develop and implement transparent
enforcement
tools, including escalating fines, is a
key part of the solution. NEB
funding is 90% cost‐
recovered
from industry, and this change would
have a minimal impact on the Government’s
fiscal
objectives.
A minor change to the NEB Act
would enable the NEB to develop and
deploy the resources
required to
safeguard Communities.
As an industry association
representing companies that operate and
build critical energy infrastructure in Canada,
our recommendations to the federal
government fall into two broad categories:
- continue to advance regulatory reforms
that will allow for timely regulatory
decisions, enhance
the
investment climate, and build the
economy; retain appropriate federal
capacity to
implement permitting requirements and ensure
environmental compliance and protection; and
- provide legislative
and regulatory tools that will allow
the NEB to enforce and protect the
public
located near critical energy
infrastructure such as pipelines from third
party damage.
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