Weathering the Storm Modernizing the National Energy Board for the Epoch of Climate Adaptation and Energy Transition Presentation to the Expert Panel Reviewing NEB Modernization By Alex Paterson, Campaigner with Manitoba Energy Justice Coalition The question that we need to answer is this: How can we transform the NEB to operate within a radically different context, primarily determined by our relationship to a transforming climate.

We all know what the problems are from a birds eye view. The NEB has taken a lot of heat for an overall lack of coherent policy from the federal government. I am going to be solutions oriented and remain focused on climate change. Please ask me about public participation if you want commentary on that.

Redefining the Public Interest A Key strategy for reconceptualising the NEB is to reimagine it’s role in energy development. Understand that climate change requires a complete paradigm shift. Contextualizing the NEB’s mandate:

52(2) In making its recommendation, the Board shall have regard to all considerations that appear to it to be directly related to the pipeline and to be relevant, and may have regard to the following: a)the availability of oil, gas or any other commodity to the pipeline; b)the existence of markets, actual or potential; c)the economic feasibility of the pipeline; d)the financial responsibility and financial structure of the applicant, the methods of financing the pipeline and the extent to which Canadians will have an opportunity to participate in the financing, engineering and construction of the pipeline; and e)any public interest that in the Board’s opinion may be affected by the issuance of the certificate or the dismissal of the application. From the National Energy Board Act. - The lack of a concrete definition of public interest in relation to climate change is a key policy gap that must be addressed immediately. NEB defines, “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.”

We don’t need any expansion for our carbon budget. World Carbon Budget There are already more developed reserves than the entire carbon budget for 2 degrees or less of global warming.

We have to be aiming for decarbonization by 2050 Pipeline expansion requires giving up on 1.5 degrees and limiting our effort for 2 degrees It requires betting against morally appropriate behaviour and our international obligations. Striving for 1.5 degrees or less requires aiming for decarbonization by 2050. Key Question to ask: Q. Can this project be amortized before decarbonization?

Carbon Countdown Source: Carbon Brief, June 2016 - This situation requires urgency. Source: Carbon Brief, June 2016

The NEB’s role should be managing decline of fossil fuels and rise of renewables in line with the Paris Climate Treaty.

Oil and Gas Development is preventing adequate climate action. - Oil and Gas emissions are growing when everyone else has to cut by 52% to reach a target we all know isn’t good enough. Oil and Gas Development is preventing adequate climate action.

This problem can largely be put on Alberta’s oil sands and BC’s LNG pipe dream. We need to embed the sands emissions cap in federal legislation so the situation doesn’t get worse. We need to allocate carbon provincially and sectorally. - Federal Regulation of Alberta’s Oil Sector Required - Embed Sands Emission Cap in Federal Legislation

Embedding Climate Action within the NEB Definition of Public Interest NEB Act Amendment: Add: 52(2) (i) In making its recommendation, the Board shall make sure its recommendation allows for: - a) Canada to meet or exceed its commitments to the Paris Climate Treaty; - b) the managed decarbonization of the Canadian economy by 2050 or earlier; - c) a 100 MT or less cap on Alberta’s oil sands emissions; We need to embed our international obligations to climate action within the NEB Act. Embedding Climate Action within the NEB Definition of Public Interest

Additional Embedding of Climate Action in NEB Mandate NEB economic forecasting must assume meeting or exceeding Canada’s fair share contribution to the Paris Climate Treaty. NEB economic forecasting must model the social cost of carbon in any case scenarios. NEB must be able to decommission pipelines early for the public interest. The NEB should act as an oversight body & regulator for crown utilities and provincial regulators to ensure they are developing business plans and infrastructure consistent with carbon allocation required to achieve decarbonization by 2050 or earlier. We need to further embed climate action within the mandate and operations of the NEB.

Complementary Policy Framework Negotiate share of global carbon budget. Negotiate provincial allocation of national carbon budget. Develop national energy strategy based on carbon budget allocations. Cumulatively assess current provincial emissions within context of carbon allocations. Assess new projects based on how they fit into 1) a managed decline to decarbonization, 2) carbon allocation, & 3) social cost of carbon. Conduct project engineering & safety review if projects fit within carbon budget allocation and decarbonization plan. The NEB should only be involved in steps 5 & 6 of the process. The NEB is best suited to having its scope narrowed to focus on step 6 in infrastructure reviews. The NEB could participate or lead step 5 if the federal government embedded climate action within the NEB Act and depoliticized the board.

Contact Information: mbenergyjustice.org info@noenergyeastmb.org