implementing smart regulation: how are we doing?
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Implementing Smart Regulation: How are we doing?. CAMPUT Conference May 2, 2005 Quebec City Ken Vollman Chairman National Energy Board. Presentation outline. The Regulator’s Role: Recap of last year’s “protect and enable” message, and how we’ve been walking the talk - PowerPoint PPT PresentationTRANSCRIPT
National EnergyBoard
Office nationalde l’énergie
Implementing Smart Regulation:
How are we doing?
CAMPUT Conference May 2, 2005Quebec City
Ken VollmanChairman
National Energy Board
National EnergyBoard
Office nationalde l’énergie Presentation outline Presentation outline
I. The Regulator’s Role: Recap of last year’s “protect and enable” message, and how we’ve been walking the talk
II. Current market context
III. Current challenges and how well we’re doing in addressing them
• A report card
IV. Summary comments
National EnergyBoard
Office nationalde l’énergie
To protect To enable+
Outcomes in the public interest
=
I. The regulator’s roleI. The regulator’s role
Protect and enable: means to regulate in a way that seeks to protect against the negative impacts of energy development while enabling desirable outcomes determined to be in the interest of Canadians
National EnergyBoard
Office nationalde l’énergie What does enabling entail?What does enabling entail?
Process sense– focus on results and cost effectiveness
– establish common information and regulatory requirements
– coordinate among/between agencies and departments
– publish service standards and agreements
– eliminate duplicative functions
Regulatory policies– facilitate the long-term efficiency of markets
– provide information and choice to all market participants
Allowing construction in the public interest– facilitate construction and development that is within approved terms and
conditions
The Board’s vision is to be a respected leader in energy regulation that protects and enables in the Canadian public interest.
National EnergyBoard
Office nationalde l’énergie
Plan
Do
Measure
Improve
Quality Management System(and business process mapping)Quality Management System(and business process mapping)
Consistently achieve results aligned
with public interest objectives
Establishes clear accountabilities
and service standards
Enhances process clarity for all
participants
Measure achievements
Expectation of continuous
improvement
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Office nationalde l’énergie Cooperation and partnershipsCooperation and partnerships
Northern Cooperation Plan for Mackenzie Gas Project
MOU between NEB and FERC
Atlantic offshore agreement
Canada- Quebec Agreement on Environmental
Assessment which may lead to a joint review of the
Rabaska project
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Office nationalde l’énergie Enabling through regulatory policiesEnabling through regulatory policies
Continue the development of goal-oriented regulation
Shipper surveys (first ever)
Promote understanding of energy markets (EMAs)
Encouraged and provided resources to CCU
Making sure the rules of the game are clear for new
activities such as LNG imports and marine seismic
work
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Office nationalde l’énergie
Enabling through regulatory policies (continued)Enabling through regulatory policies (continued)
Evaluating COGOA regime for frontier E&P
Applying risk management principles to our
compliance work
Stakeholder engagement– Revised code of conduct
Actively supporting CAMPUT
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Office nationalde l’énergie
Facilitate construction of approved projectsFacilitate construction of approved projects
SMART conditions– specific, goal-oriented (Desired End Result)
– measurable
– achievable
Coordinate condition compliance and inspection with other regulators
Streamlined s.58 and clarified O&M
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Office nationalde l’énergie II. Current market contextII. Current market context
Not much different from last year:– high, and volatile, prices
– supply lagging growing demand
– end of incremental solutions; need to make choices about new major projects
A long list of oil, gas and electricity projects are on our radar screen– tracking 10 oil pipeline projects and alternatives
– tracking 6 gas pipeline projects
– tracking 8 LNG projects
– tracking 4 international power lines
National EnergyBoard
Office nationalde l’énergie
Location of major projects with NEB involvementLocation of major projects with NEB involvement
Oil P/L Gas P/L LNG Power line
11
1
12
11 17 25
27
2526
1718
2019
21
22
23
24
28
13
14
15
16
12
43
5 6
7
8
9
10
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Office nationalde l’énergie Introducing the players, & driversIntroducing the players, & drivers
Industry Public RegulatorsDesired end result
Energyneeds met
Safety
Environmentalintegrity
Rightsrespected
Clarity
Timeliness
Efficiency
Marketchoices
Involvement
Legacy
Consultation
Enjoymentof property
Mandatedriven
Fairness
Parochial
Riskaverse
Long termstability
Funding Differingprocesses
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Office nationalde l’énergie III. Current challengesIII. Current challenges
1) Fragmented responsibilities of approval agencies– erosion of integrated decision making
– coordination challenges
2) “Enabling” processes and policies
3) Alignment of regulatory policy with energy policy
4) Matters beyond our control
5) Regulatory capacity
6) Maintaining respect for regulatory process and decisions
National EnergyBoard
Office nationalde l’énergie
Fragmented responsibilities of approval agenciesFragmented responsibilities of approval agencies
Regulatory complexity and fragmentation continues to grow
Regulators are addressing the issues through coordination, e.g.,– Atlantic offshore EA cooperation MOU
– Northern Cooperation Plan (14 agencies)
This solution has limited potential because regulators cannot concede their mandates
Rating
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Office nationalde l’énergie “Enabling” processes and policies“Enabling” processes and policies
Processes– Implement QMS and business process mapping– improve communication of regulatory requirements (e.g., Filing Manual)– publish performance standards for application processing– reduce up-front burden for small projects– pursue cooperation and partnerships
Policies– continue goal-oriented regulation– provide choice to all market participants– enhance stakeholder engagement
Facilitating construction– use results oriented conditions– Coordinate compliance
Rating
National EnergyBoard
Office nationalde l’énergie
Alignment of regulatory policy and energy policyAlignment of regulatory policy and energy policy
In recent times, regulatory policy has often been developed in advance of energy policy
In my view, regulators are well placed to bring policy gaps to the attention of government– expert knowledge of the issues;
– mandate to consider the broad public interest;
– requirement to take a long-term view; and
– inherent neutrality and objectivity.
Is there a role for CAMPUT?Rating
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Office nationalde l’énergie Matters beyond our controlMatters beyond our control
Hearings can become a forum for airing concerns which could be better dealt with by other means– e.g., land use planning, revenue sharing, land claims
Hearing time is used inefficiently to debate matters which should be dealt with by standards or regulations– e.g., air quality standards, CO2 emissions
Rating
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Office nationalde l’énergie Regulatory capacityRegulatory capacity
Attracting and retaining Board Members Competing for specialized staff expertise Government controls
Rating
National EnergyBoard
Office nationalde l’énergie
Maintaining respect for regulatory process and decisionsMaintaining respect for regulatory process and decisions
Regulators must maintain their independence, impartiality and fairness
Stakeholders must feel they are engaged, their interests understood, and that they influence outcomes. Initiatives in this respect include:– incorporating consultation into all regulatory improvement projects
– encouraging staff to maintain and build networks
– updated our code of conduct
– creating a new business unit to coordinate all strategic initiatives
Rating
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Office nationalde l’énergie IV. Summary CommentsIV. Summary Comments
Large infrastructure projects are needed to ensure our energy needs are met
Investors require clear and efficient regulatory processes
The public expects regulators to protect the environment and other public interests
The challenge to regulators is to effectively balance their protect and enabling roles
National EnergyBoard
Office nationalde l’énergie Summary CommentsSummary Comments
The NEB is committed to partnering with other agencies and regulators to rationalize regulatory processes
The Board is actively pursuing Smart Regulation strategies
I would give us about a B- so far We’re doing a lot of things right but there is still a lot
of work ahead Challenge for this Conference is to identify specific
actions we can take in the next year