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By JOSH WINGROVE
Bloomberg

Canada’s pipeline regulator can’t afford to keep veteran engineers, and government pay guidelines are to blame, a major industry group told lawmakers.

Because of salaries that are too low to compete with the private sector, the National Energy Board instead hires junior engineers only to lose them once they have more experience, the head of the Canadian Energy Pipeline Association said before members of Parliament.

“We believe the NEB needs more flexibility to be able to nimbly hire and contract the kind of sophisticated, advanced expertise that it will require to keep pace with global, world- class regulation and risk management,” Brenda Kenny, CEPA’s president and CEO, said during a Senate committee hearing on a pipeline safety bill.

Craig Loewen, a spokesman for the NEB -- an arm’s-length government agency that oversees pipeline construction and operation -- acknowledged it can’t match private sector salaries in some cases but remains confident it has the expertise needed to fulfill its mandate.

The pipeline safety discussion follows an increasing number of proposed conduits or expansions to ship production from Alberta’s oil sands, the world’s third-largest proven crude reserves. Kinder Morgan’s Trans Mountain line expansion and TransCanada’s Energy East project are among projects that have come under fire because of oil spill concerns.

Talent Retention

“Twenty junior engineers can’t match two highly experienced integrity engineers,” Kenny said, calling for a more appropriate funding model. “It’s not more bodies -- it’s an ability to attract and retain superb expertise.”

Jim Donihee, the chief operating officer of the pipeline group who is a former executive with the NEB, told lawmakers the regulator typically hires engineers then loses them after seven to 10 years. He experienced the problem first-hand while at the agency.

“It’s not the total envelope of funds,” he said. “It’s how are they able to apply them? What sort of pay scales can they offer?”

The NEB has been in talks with Canada’s Treasury Board department to find ways to retain its staff, Donihee said, suggesting the pipeline industry would be willing to offer its own staff to help.

CEPA represents natural gas and oil pipeline companies across Canada, while the NEB is 90% funded by levies on the industry.

Salary Scale

The agency has a “market allowance” that increases what it can pay engineers above standard government guidelines, the NEB’s Loewen said.

“That does give us a bit of flexibility” but it still doesn’t bring salaries up to industry standards “in all cases,” he said.

Jacinthe Perras, a spokeswoman for Natural Resources Canada, said in an e-mail that public servants have access to generous benefit packages and that the government strives to attract top talent while respecting limited public resources.

“The government has confidence in the ability of the independent National Energy Board to attract and retain talented individuals to their staff,” she said.

Another speaker at the Senate committee hearing echoed the pipeline group’s concerns.

“When you look at the sort of talent the NEB is going to need, hiring a junior engineer isn’t going to cut it,” said Robert Blakley of Canada’s Building Trades Unions, which represents more than half a million construction workers.

The NEB should be Canada’s “center of expertise,” he said. “And if that means spending a little more money on those people, let’s do it.”


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