Kelly’s move to National Energy Board costly, time consuming, unnecessary

Steven Kelly's work experience and education no doubt make him a valuable addition to the National Energy Board, but he was definitely appointed at the wrong time.

His appointment, made in July but effective Oct. 13, has raised questions about the impartiality of the board and caused a four-month delay in the Trans Mountain Expansion Project hearings.

Mr. Kelly, who has a masters of engineering from McMaster University and an MBA from the University of Calgary, was vice-president at IHS Global Canada Ltd. when the government chose him as a new full-time member. The U.S.-headquartered company has 8,000 employees globally and is recognized as a leading consulting firm on energy matters.

Nobody has questioned Mr. Kelly's expertise, but his appointment to the National Energy Board is shocking because he had earlier provided key evidence for Trans Mountain in the hearings now before the board.

Mr. Kelly will not sit on the panel that will make the decision on the Trans Mountain pipeline application and the board has gone to great lengths to make it clear he remains outside that process.

"Trans Mountain and intervenors should be aware that the panel members do not know Mr. Kelly personally. Mr. Kelly has not yet taken his oath of office and, the panel has not had, and will not have, any contact with Mr. Kelly about his assessment of [the Trans Mountain pipeline] project," the board has stated.

It also struck Mr. Kelly's evidence from the record and ordered Trans Mountain to file new evidence, causing a significant delay in the hearings.

Trans Mountain, which hired Mr. Kelly in 2013 to prepare a detailed submission on supply and market issues, sought to minimize the impact of his move to the board by having a second expert review and adopt Mr. Kelly's evidence. The company also argued, in a Sept. 11 letter to the board, that, "As an expert tribunal, the board could have appropriately dealt with Mr. Kelly's appointment by imposing an ethical wall or 'cone of silence.' "

While Trans Mountain saw Mr. Kelly's jump to the board as a problem, the company felt those steps – building a firewall and re-adopting the evidence – would have been adequate to keep the hearings on track.

In other hearings, that might have worked. But the National Energy Board process regarding the Trans Mountain pipeline proposal is highly controversial in British Columbia. Even before the Kelly incident, several intervenors had withdrawn from the process to protest what they said was an NEB bias in favour of Trans Mountain.

When Mr. Kelly's move to the board was announced, the cities of Burnaby and Vancouver, environmental groups and First Nations promptly complained.

"Burnaby is of the view that the review process for the project has been irrevocably tainted by the appointment of Mr. Kelly," Gregory McDade, the lawyer for the City of Burnaby stated in a recent letter to the board. "The striking of Mr. Kelly's evidence by the board in no way cures the perception of this review process as biased or unfair; additional steps must be taken on an urgent bases to restore the integrity of the hearing."

In his letter, Mr. McDade said the whole review process should start over. The board has rejected that proposal.

However, Living Oceans Society, Metro Vancouver and others demanded, and got, more time to respond to whatever new information Trans Mountain files to replace Mr. Kelly's evidence.

So now, instead of finishing in January, the board hearings won't wrap up until the end of May.

All of this is costly, time consuming and unnecessary.

The government could have avoided controversy by hiring someone who didn't have ties to Trans Mountain. Or it could have simply delayed Mr. Kelly's appointment until after the decision on the pipeline application was made.

Instead, the government rushed to appoint a Trans Mountain consultant at a time when it was already under attack for allegedly being biased in favour of industry. That wasn't a smart move, no matter how brilliant an analyst Mr. Kelly is.

Editor's Note: An earlier version of this column incorrectly said Steven Kelly was hired by the NEB. In fact, he was appointed to the National Energy Board by Governor in Council.