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7 responses to “Attn: Andrew Nikiforuk. If you’re going to make accusations, you should back them up.”

  1. Andrew Nikiforuk

    Andrew Leach has taken issue with several points made in my Tyee column about the NEB and captured regulators. But his arguments are not convincing.

    1.) Leach first argues that a regulatory board such as the NEB can be objective and still be financed 90 percent by industry through a system of levies based on the principle of cost recovery. Here, we simply disagree. As a journalist and landowner I remain unconvinced by his assurances that such funding formulas are all okay. Ordinary Canadians know that the guy, who pays the piper, calls the tune.

    2.) Next Leach questions the authority and credibility of Canadian Association of Energy and Pipeline Landowner Associations (CAEPLA) and its founder, David Core. I think people who deal with an energy regulator everyday and must live with the consequences of the board’s policies and decisions are more informed than journalists or academics. It wasn’t’ regulatory economists that disclosed the corrupted nature of the Texas Railroad Commission or the US Mineral Management Services but good auditors and researchers. So, I invite Leach to leave his ivory tower and have an open conversation with Dave Core. (Oddly, I have yet to meet a pipeline executive or a regulatory economist that has accused a regulator of capture.)

    3.) I’m not the first person to question the impartiality of the board. Nor will I be the last. I’d suggest that Leach find a library and read the 2000 Purvin & Gertz report: “Formative Evaluation of Effectiveness of the National Energy Board’s Program Delivery.” (And why isn’t this critical report on the NEB’s website?) The report raises many serious questions and I quoted the accurately and in context. The document talks about the perception of regulatory capture repeatedly. Perception is based on performance. Adds the report: “A surprisingly wide range of stakeholders with little experience with the Board, as well as regional representatives outside Alberta, mentioned this phenomenon as a major weakness that could eventually have a serious impact on the Board’s credibility…..Environmental NGOs also generally perceive the Board as being captured by industry.” It also found that the Board had “no standards on pipeline abandonment”; “no environmental policies and standards;” and “no integrated environmental information management system.” I argue that these critical deficits, which the Board has belatedly and half-heartedly tried to address, are more evidence of capture.

    4.) Leach doesn’t address some of my column’s most important charges because they prove my point about capture. If the Board is an independent and impartial body than why does it call itself a industry “partner”? (Leach suggests it is simply a matter of semantics; but I would argue that it really describes the actual mechanics.) And if the NEB is such a responsible and transparent agency, then why does it reply to information requests about industry lobbying and partnerships with 300 blank pages? And if it is concerned about public safety than why does it wait weeks before telling Canadians that it has forced companies to reduce pressure in their pipelines to avoid another Michigan-like Enbridge fiasco?

    5.) Last but not least, Leach takes umbrage with two quotes in the column taken from a Senate report on energy. Because I provide links and sources in the interests of accountability and debate, Leach smartly checked them. And here I frankly agree with one of his criticisms. One of the quotes was, indeed, taken out of context. I made a mistake and I’ve removed it from the article. But that error doesn’t subtract from the essence of my argument: the NEB does a great job for pipeline companies but a poor one for Canadians and landowners.

    6.) Leach humorously suggests that I need to marshal more evidence for regulatory capture and get a bigger boat. May I suggest that regulatory economists such as Leach pay more attention to who runs and funds our regulatory boats as well as what ordinary sailors have to say about their navigation. The evidence I presented in my column raises critical questions about the agency’s performance and transparency. I stand by my column.


  2. David Wilson

    Andrew Nikiforuk has indeed replied, and for my money, convincingly.

  3. Joel Wood

    Very interesting debate.

    The point Leach makes about the non-retractability of industry funding is very, very important. The funding absolutely cannot affect impartiality because a company cannot refuse to pay.

    Lately, I have been reading a lot about the problems with the MMS leading up to the Macondo well blow out for a project I am working on, and it seems that MMS funding (from all sources) flatlined in real terms as offshore oil activity in the US increased dramatically. During the same period, the mandate of the MMS also increased significantly. MMS was underfunded and thus could not retain or even attract enough technical experts to properly fulfill all of its mandates. MMS was forced to rely much too heavily on the technical expertise of the oil companies. Many of the problems with MMS could have been solved if MMS was allowed to keep a fixed percentage of the revenue it collected on behalf of the US government.

    IMO there is a problem if the NEB is relying too heavily on industry analysis due to funding issues; but as long as the funding from industry is non-retractable and will increase with the need for regulatory activity, I see no funding source problem. The MMS provides a good example that government funding can easily be flatlined or cut in real terms.


  4. The AUC and Maxim Power: No steps forward, 3 steps back.

    […] The willingness of the AUC to react to this request and deliver an interim approval is baffling.  The AUC’s decision report states that, “if, upon further review of the evidence submitted by Maxim or any other evidence that is pertinent to this application, the Commission determines that additional conditions are warranted, the power plant approval will be contingent upon those conditions.”  The AUC’s mandate, as defined by then-Energy Minister Mel Knight, is to ensure that, “(Alberta’s) regulatory system is effective, responsive to concerns raised by directly affected landowners and interested third-parties, and promotes responsible development in the best interests of the public.” In this case, the AUC determined that no parties had standing to intervene in a hearing, ruling out at least one interested third-party, and granted approval, apparently determining that the project was in the public interest without confidence that they had adequately completed their review of the evidence.  With decisions like this, it’s no wonder people raise questions about the relationship between industry and regulators. […]

  5. Evan Vokes

    I would be happy to prove Andrews point. Pretty clear to me from what I saw. regardless of your gender, religion political bent, this is a nation of laws. Hal should have followed them

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