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Sunday, November 02, 2014 by Marc Eliesen

Energy executive blasts Kinder Morgan review as “fraudulent,” quits

Marc Eliesen has withdrawn as an intervenor in the federal government’s review of Kinder Morgan’s Trans Mountain pipeline and oil tanker expansion project, detailing his reasons for quitting in a scathing 1,500 word letter to the National Energy Board.

Eliesen is the former CEO of B.C. Hydro and the former Chair of Manitoba Hydro. A deputy minister in seven different federal and provincial governments, Eliesen has forty years’ executive experience in the energy sector, including as a board member at Suncor.

Here is the full text of his letter to the secretary of the NEB:

Dear Ms. Young:

The Intervenor, Marc Eliesen, wishes to withdraw from the National Energy Board hearing on the Trans Mountain Expansion Project (TMEP).

I applied as an intervenor with expertise to offer the Board in good faith that my time and personally incurred costs would be well spent in evaluating Trans Mountain’s proposal, questioning the Proponent, preparing evidence commensurate with my expertise, answering questions on that evidence, and providing final argument. Unfortunately, I have come to the conclusion that the Board, through its decisions, is engaged in a public deception. Continued involvement with this process is a waste of time and effort, and represents a disservice to the public interest because it endorses a fraudulent process.

I have a professional background that includes over 40 years of experience in senior executive positions in the energy sector of Canada, and an understanding and working knowledge of the mandate and operations of the National Energy Board, including an appreciation of the principles of natural justice and the rules and practices of quasi‐judicial bodies in Canada. I have reached my conclusions based on my wealth of experience.

I rigorously reviewed Trans Mountain’s application and developed extensive questions in the first round of Information Requests. I was dismayed when the oral cross-examination phase — that has served as a critical part of all previous Section 52 oil pipeline hearings — was inexplicably removed from this hearing. It is my experience that when a Proponent does not face the spectre of oral cross-examination, their written responses to interrogatories suffer from a lack of detail and accountability. Still, I was willing to see the results of the Information Request process the Board promised would be sufficient.

The unwillingness of Trans Mountain to address most of my questions and the Board’s almost complete endorsement of Trans Mountain’s decision has exposed this process as deceptive and misleading. Proper and professional public interest due diligence has been frustrated, leading me to the conclusion that this Board has a predetermined course of action to recommend approval of the Project and a strong bias in favour of the Proponent.

In effect, this so-called public hearing process has become a farce, and this Board a truly industry captured regulator.

In addition to gutting the oral-cross examination feature of a public hearing process that supports proper questioning and an adequate level of due diligence, there are other Board decisions that have been made over the course of this hearing that reflect a pre-determined outcome.

The evidence on the record shows that decisions made by the Board at this hearing are dismissive of Intervenors. They reflect a lack of respect for hearing participants, a deep erosion of the standards and practices of natural justice that previous Boards have respected, and an undemocratic restriction of participation by citizens, communities, professionals and First Nations either by rejecting them outright or failing to provide adequate funding to facilitate meaningful participation.

The above is reflected in the following:

  1. The Board elected not to request assistance from the Intervenors in the formulation of issues that would assist the Board in the conduct of the proceedings at the commencement of this hearing. This approach represents a double standard. Trans Mountain requested and received an amendment to the List of Issues in the earlier Part IV Toll Application. Also, this “no more issues” position is completely a reversal of what took place in the Northern Gateway Project hearing when the Board actively solicited assistance from Intervenors in the determination of issues to be included in the scope of the review. The Gateway Panel also included three sets of Information Requests (two on initial evidence and one on reply evidence) and an oral cross-examination of the evidence.

  2. Given the highly technical nature and voluminous size of the TMEP application, requests from numerous participants, including municipal governments, environmental organizations and First Nations were made asking the Board to provide significant additional time to prepare Information Requests. The Board basically rejected these requests.

  3. The Board has been alerted to numerous instances where Trans Mountain studies by its employees and commissioned consultants lack basic professional standards of disclosure, source verification, references, data, assumptions and methodology. It is shocking that in a process such as this where due diligence is required on a major capital project that the Board has not held Trans Mountain to a minimum professional standard of accountability and transparency. This is especially reflected in the Board’s own written Information Requests to the Proponent on the alleged economic benefit materials put forward. The Board’s veneer examination of the Proponent’s case is reflective of a decision not to dig too deeply for fear the economic case may crumble, or a lack of economic, financial and business acumen on behalf of the Board to know where and how to dig. The Board’s Information Requests related to Trans Mountain’s economic case are tantamount to a sweetheart written cross. And when basic business questions from Intervenors are asked to test the evidence at a higher level of scrutiny, Trans Mountain refuses to answer them.

  4. The Board, in an unprecedented fashion, has rejected the previously established practice in Section 52 public hearings on oil pipelines to provide for oral cross-examination on the evidence submitted at the hearing. The Board maintains that two rounds of written information requests is sufficient to test the evidence. Even the Government of Canada’s Department of Justice (DOJ) has informed the Board that evidence given without cross-examination should be rejected. The DOJ stated “Canada’s position is that cross-examination is necessary to ensure a proper evidentiary record ...” Furthermore, “cross-examination serves a vital role in testing the value of testimonial evidence. It assists in the determination of credibility, assigning weight and overall assessment of the evidentiary record. It has been termed ‘the greatest legal invention ever invented for the discovery of truth’ ... without cross-examination the Board will be reviewing only untested evidence.”

  5. With the absence of oral cross-examination of Trans Mountain executives and their experts, the only process now available to understand and test the application is through written Information Requests. The National Energy Board Rules of Practice and Procedure provides the NEB with the power to direct a party “to provide full and adequate” responses to Information Requests, without which the hearing process cannot be meaningful and cannot meet the requirements of procedural fairness and natural justice.

    For most Intervenors submitting Information Request No. 1, Trans Mountain has failed to respond and address the actual core elements of the question. They have either provided non-responses, general statements, or referred back to the inadequate information in the original application that gave rise to the question in the first place. In many instances Trans Mountain has assumed the regulator’s role declaring that the question asked is outside the List of Issues established by the NEB.

    Given the Board’s lack of objectivity it is not surprising that out of the approximately 2000 questions not answered by Trans Mountain that Intervenors called on the Board to compel answers, only 5 per cent were allowed by the Board and 95 per cent were rejected.

    The Board had stated that the elimination of cross-examination of the Proponent’s evidence can be evaluated through the two scheduled Information Requests. But we have a Kafkaesque outcome. Trans Mountain refuses to answer questions and the Board does not compel them to do so.

  6. The Province of British Columbia stated that “Trans Mountain’s failure to file the evidence requested by the Province in Information Request No. 1 denies the Board, the Province and other Intervenors access to the information required to fully understand the risk posed by the Project, how Trans Mountain proposes to mitigate such risk and Trans Mountain’s ability to effectively respond to a spill related to the Project.”

    The Province of British Columbia has the responsibility for undertaking due diligence on behalf of the public trust of British Columbians. The 80 questions Trans Mountain refused to answer — which the Province believed important enough to ask the Board for assistance and compel Trans Mountain to answer — were denied by the Board.

    The Board has sided with Trans Mountain dismissing the Province of BC’s need for answers in pursuit of its duty to British Columbians. The NEB’s bias in support of the Proponent is reflecting poorly on the Province of BC in that it is unable to obtain necessary answers to conduct its due diligence. Accordingly, it raises the question as how it is possible for the Province of BC to continue to participate in this hearing process. The Province should cancel the Equivalency Agreement with the NEB on this project and undertake its own environmental assessment as the only meaningful way in which it will be able to effectively obtain the answers it seeks.

The National Energy Board is not fulfilling its obligation to review the Trans Mountain Expansion Project objectively. Accordingly it is not only British Columbians, but all Canadians that cannot look to the Board’s conclusions as relevant as to whether or not this project deserves a social license. Continued involvement in the process endorses this sham and is not in the public interest.

Yours truly,

Marc Eliesen

Fed up with the federal pipeline review process? Think British Columbians should vote on Enbridge and Kinder Morgan’s crude oil transport proposals? Add your name at http://LetBCVote.ca

pmagn says:
Nov 02, 2014 08:54 PM

why we cant tackle the most critical problem in human history... our govs are corrupt.

MK says:
Nov 04, 2014 02:56 PM

Business is above all human rights...

Julia Madison says:
Nov 02, 2014 09:23 PM

It's been obvious for some time the NEB (National Energy Board) is a Sham..This proves it without a doubt.

Joseph Ravick says:
Nov 02, 2014 09:44 PM

Once again, the politicians are, according to March Eleisen, "... engaged in a public deception." I urge you to read this report by a creditable and respected professional. Obviously we can not depend on our federal and provincial governments to protect our, and the country's, interests and well being.

Ian says:
Nov 02, 2014 10:35 PM

hopefully the people of Burnaby can use this information to their advantage.

Mark Marquette says:
Nov 02, 2014 10:36 PM

We have grown to expect such dealings form the corporate world; but, it is utterly disgusting, inexcuxable and unforgivable when the Federal Government ACTIVELY engages to facilitate and ENSURE the tactics WORK!!
BE WARNED!! The People HAVE a breaking point! This looks to be racing heaadlong into it!

marcus waddington says:
Nov 02, 2014 11:14 PM

Shocking, Kafkaesque, a farce, fraudulent, deception. These are some of the words Marc Elieson uses in describing the "work" of the NEB. The disallowal of cross examination procedure strikes at the heart of natural justice. Kinder Morgan pipeline represents the destruction of the balances within the state of Canada as it once was. We are now confronted with a totalitarian process that will be admired by other states like: China, North Korea, Syria and so on.

Martin byers says:
Nov 02, 2014 11:19 PM

We should vote as a province, or each and every municipality that a pipeline goes through should get a chance to vote and have their votes be the final say

Patricia Ray says:
Nov 03, 2014 12:01 AM

The general public has maintained that the National Energy Board has been biased toward the federal government position of pipeline development at any cost. I think that Mr. Eliesen, a respected expert in his field, has succinctly presented for all to see the truth of what opponents to the pipeline have been saying. Thank you for your service Mr. Eliesen.

Jordan Ellis says:
Nov 03, 2014 01:27 AM

Clearly, the NEB is like most MP's not in cabinet in the government or in the shadow cabinets of parties not in power - that is, nothing but trained seals who stand around and bark on cue during photo ops. The sham has been evident for some time and I appreciate Mr. Eliesen's taking this stand on principle and calling them out by his resignation. I'm afraid that our democracy is really being challenged by Mr. Harper and Ms. Clark. Call me paranoid,but I recall when Mr. Harper warned us, "Just wait until I get a majority. You won't recognize Canada when I'm through." (paraphrased) It is coming to pass! Want to see where we're headed? Just re-read, as I did recently, "1984".

Peter Ruetters says:
Nov 03, 2014 07:14 AM

The same goes for the OMB & OEB in Ontario

Tom Johnsson says:
Nov 03, 2014 10:26 AM

Harper's Reform Party of Canada is bought and paid for by the Calgary centered Energy Industry. He has transformed Canada into a Corporate Cleptocracy.

Connie Everitt says:
Nov 04, 2014 06:32 AM

I wish this page had like buttons

renay maurice says:
Nov 03, 2014 11:09 AM

brilliant! this is what we need, people in power to say the truth

PEL says:
Nov 03, 2014 11:19 AM

This is what you get when you elect people like Stephan Harper.

K Oneil says:
Nov 03, 2014 11:25 AM

Hail Mr. Eliasen. ..A good and honest man! Thank you Sir.

Chris Langley says:
Nov 03, 2014 11:57 AM

The reality is that we, as individual citizens, have the power to stop this. In many countries it is done by torches and pitchforks in the night. That is how democracy is won. I do not suggest that here, but each and everyone of us must be vocal. Write letters to your MLA, your MP, newspapers, and pass this article on to friends. Above all, vote.

Susan Lynn says:
Nov 03, 2014 01:36 PM

Has this letter been released to the local media? Can't find anything on-line for The Sun, Globe and Mail, etc. Surely they will be interested and it would help get the word out?

graham oliver says:
Nov 03, 2014 03:26 PM

Absolute arrogence. But that ius typical of the oil and gas industry pushing THEIR agenda and they are fully endorsed by the prime minister. Time to pitch him out. Unfortunateley the prime minister has left an indelible, dirty mark on this country. So ad!

Tom Landers says:
Nov 03, 2014 03:58 PM

What are they all going to do when OPEC continues to increase production, flooding the market with supply which will drop the price per barrel below the thresh hold for tar sands oil to be profitable and completely tank the entire North American oil industry?

Louise Taylor says:
Nov 03, 2014 06:20 PM

It is good to see the NEB sham now fully exposed and hopefully mainstream media will report on this letter more widely than reporting on Jian Ghomeshi's private life. Marc Eliesen fails to recognize that BC's environmental assessment process is as much as a sham as the NEB review process. I think we need more than just writing to letters to MPs, MLAs and editors. Canadians need to wake up now and demand action on climate change.

Anne Kivari says:
Nov 03, 2014 08:10 PM

"the Board has not held Trans Mountain to a minimum professional standard of accountability and transparency. This is especially reflected in the Board’s own written Information Requests to the Proponent on the alleged economic benefit materials put forward. The Board’s veneer examination of the Proponent’s case is reflective of a decision not to dig too deeply for fear the economic case may crumble"…taken from Marc Eliesen's letter. Even the lies that Clark and Harper are telling in regards to so called "economic benefits" don't stand up to scrutiny. Time for big changes to happen and it's in our hands, the voters.

Ken Wright says:
Nov 03, 2014 08:11 PM

I'm one of the 400 other entities lucky enough to have been awarded intervenor status. I got involved because it looked suspicious in the first place and throughout the process exactly what Marc Eliason reports here is what I've experienced. Its not so much Kinder Morgan themselves. They are just the children playing the game. Its the rule makers. The children have taken over the parenting and we the voters are too out of touch to believe this kind of thing could actually be going on. The absurdity of all this is their best defense because it really is hard to believe that government could be so drunk on a fossil fuel future that they could so blatantly dismiss the public interest they are elected to protect.

The Thinker1958 says:
Nov 03, 2014 08:47 PM

when Harper accelerate the normal process to award contracts to companies, one of the CEOs of those companies commented "well, I think we can create jobs now a lot faster"... he said that because the environment was not going to be consider anymore.
Corruption is rampant.

Ruth Nicol says:
Nov 03, 2014 11:55 PM

I read Marc Eliesen's letter to the secretary of the NEB with a lift of the heart.

Howard Dieno says:
Nov 04, 2014 12:21 AM

It is encouraging to read that there are professionals like Mark Eliesen prepared to speak with integrity, and against corporate corruption and the collusion of the Harper government.

J.G. Smith says:
Nov 04, 2014 01:19 PM

Says it all doesn't it? Take back our power. It is time to start speaking up. Boycott the next elections and rather than go to the polls, go to your local MLA or MP's office and explain to them why you will no longer vote for any of them, and demand electoral reform.

vanracer says:
Nov 04, 2014 05:54 PM

It is sad when the phrase "power corrupts" becomes so evident and part of our national fabric. Sorry also to read J.G. Smith's comment to boycott elections and protest at MLA AND MP offices instead of voting. If you don't vote, you have no right to pass comment on anything the government does. While you are boycotting elections the same people get re-elected by people that do vote. You want electoral reform? Do you have a better idea for citizens as a whole to express their views? Maybe rioting and anarchy? To all the folks out there who really care, Vote and kick out people that don't represent your views. It all balances out.

R. Bains says:
Nov 04, 2014 11:09 PM

Although this is definitely not surprising, I don't believe Harper & his club deserve to be in the public office, especially if they refuse to pay attention to public interests. Mr. Eliesen's departure from this role clearly highlights the extent of corruption in the Govt. (both Ottawa & Victoria). This is what you call "democracy" in gangster style.

Charlie Lenz says:
Nov 06, 2014 02:11 PM

This letter is a sad indictment of the apparent debasing of duly constituted review and oversight processes which I previously believed to be independent and therefore protective of the public interest. Mr Elieson's letter clearly and with a number of documented examples challenges that notion, as well it should. It calls into question, in my mind at least, the objectivity and professional behaviour of such agencies. The term 'Kafkaesque' comes to mind which is chilling.....

Alain says:
Nov 07, 2014 03:09 PM

Have you noticed that for sometime now, politicians to not talk about people or citizen but only talk about 'tax payers'... Why? well tax payers includes corporations and exclude the poor the street people, basically the politicians are doing exactly what they are saying they are serving the tax payers corporations being the biggest tax payer they receive the most attention.

Rob Aldred says:
Nov 08, 2014 10:17 AM

I'm absolutely appalled but at the same, not all that surprised either, to read about the lack of objectivity, integrity, professionalism and bias demonstrated by the NEB in the TMEP hearing process as expressed in intervenor Marc Eliesen's letter of resignation. What really and truly does piss me off and floor me more than anything else, is BC's utter inaction/no balls after the hearing without a doubt, denied BC its right of due diligence and full disclosure by NOT seeing BC received any answers whatsoever from Trans Mountain to the 80 questions BC asked about the project! Why didn't BC stand up for British Columbians and demand immediate full and complete disclosure on those questions within 30 days and if not forthcoming, further threaten to withdraw from what appears to be a bias hearing in favour of Trans Mountain on the 31st day as is BC's right, and immediately launch a separate unbiased environmental assessment of its own to get those answers!!

Brian McGavin says:
Nov 08, 2014 01:03 PM

We have brilliantly qualified citizens in all walks of life. We as citizens desire to build on the best parts of our predecessors Diefenbaker, Pearson, Trudeau, Rachel Carson. We have well known people like Drs. Alexandra Morton, David Suzuki, & many more highly respected people working for a balanced economy that respects & works with our natural environments. When government puppets like Harper & Clark remove all mechanisms of public discussion such as the NEB they are inviting more violent descent from those of us who feel powerless to effect change through democratic processes.

Clifford Chan says:
Nov 23, 2014 10:02 AM

The Conservatives have been completely silent on Kinder Morgan. I'm
sure their gang are somehow involved in getting this through.

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