Pipeline Companies plan to remove substantially less than 20% of pipelines on abandonment

In the ongoing NEB LMCI process looking at funding for future pipeline abandonment costs, the Canadian Energy Pipeline Association (CEPA), the industry group representing pipeline companies, has told the NEB point-blank that its companies have no intention of removing the 20% of large diameter pipelines proposed by the NEB in its base case:

... in canvassing the NEB Group 1 member companies that are CEPA members, each Group 1 member company is planning on filing a pipeline specific application for each asset as opposed to using the Base Case that was set out by the NEB in its December 21, 2010 Decision. That Decision re-affirmed the abandon-in-place versus removal ratio of 80% and 20% respectively for certain land usage categories.. Based on the principled approach whereby each specific land usage has an associated optimal method of abandonment, most, if not all CEPA member companies will be filing cost estimates that reflect substantially less removal of pipe than would be indicated by the Board’s Base Case Assumptions. CEPA has also heard from Group 2 companies indicating that if Group 1 member companies do not plan on filing with the Base Case assumptions, then it would not be appropriate for them to use the Base Case either. 

Read CEPA's letter at: CEPA to NEB January 12 2011.