Turning a blind eye: NEB won't consider NTSB Kalamazoo Rupture findings in deciding on Enbridge Line 9 Reversal Application

The National Energy Board (NEB) has released a decision dismissing a motion by the Ontario Pipeline Landowners Association (OPLA) that requested the re-opening of the evidentiary record of the Enbridge Line 9 Reversal Project hearing process to allow the NEB to consider the report of the NTSB into the Line 6B Rupture in 2010.  Although the NEB was "satsified that the synopsis and full report could contain information that is relevant to the Project", it ruled that:

• it is "mindful that Enbridge and parties, who have fully presented their case, are entitled to a timely decision from the Board";
• the NEB "was fully aware that this NTSB report would be issued.  Still, the Board commenced its proceeding and conducted a public hearing without waiting for this report.";
• although the NEB has yet to release a decision on the Line 9 Reversal, "the Board is satisfied that it has conducted a comprehensive assessment against its own set of regulatory requirements and applicable Canadian standards to determine whether Enbridge has the ability to safely construct and operate the Project.";
• "The Board is of the view that it has all the information it needs to be able to make a final decision on Enbridge's Project."

The NEB's decision begs the question: what harm is there in considering the report of a sister regulator into Enbridge's operational and integrity management systems?  Not only has the NEB declined to postpone its decision on the Line 9 Reversal until it has reviewed the final report of the NTSB, it has declined even to consider the NTSB synopsis that is already available.

Read the decision at: July 20, 2012.

NEB calls for public hearing re abandonment application; Company withdraws application

Just last week the National Energy Board (NEB) announced a written public hearing to consider an application by Enerplus Corporation to abandon a 2.53 km pipeline that crosses the Alberta-Saskatchewan border.  The Maple Creek Pipeline is a 114.30 mm O.D. line carrying sweet gas from Alberta wells to facilities in the Maple Creek Field in Saskatchewan.  The application proposed to abandon the line in place.  The primary land use along the line is cultivated cropland.

Yesterday, Enerplus wrote to the NEB to withdraw the abandonment application.  The Enerplus letter to the NEB says the decision to withdraw was "as a result of a recent internal review" of the facility.

NEB announces end to environmental assessments for most projects

The National Energy Board issued a letter yesterday confirming that projects that previously required an environmental screening assessment will no longer require an environmental assessment under the CEAA legislation.  This change comes as a result of the 2012 Budget legislation, which repealed the Canadian Environmental Assessment Act and replaced it with a new CEAA, 2012.

Environmental screenings were the lowest level of environmental assessment required under the CEAA legislation.  Screenings applied to pipeline projects where no more than 75 km of pipe was "new pipeline", meaning pipeline that is not adjacent to an existing utility corridor or year-round all-weather road.  Most pipeline projects were configured to fall within the screening category and it can be expected that this will continue so as to avoid any requirement for assessment under CEAA, 2012.

Read the NEB letter at: July 16, 2012.

New Ontario MicroFIT Program Rules released

From the Ontario Power Authority:

The final microFIT Program Rules, Contract and other program documents have now been posted on the microFIT website.

A key change from the draft to the final version of the microFIT Rules is on the timelines for the microFIT process. Applicants will be required to seek an Offer to Connect from their local distribution company (LDC) within 30 days of the OPA confirming that their application is complete.  This will be followed by a 90-day period during which the applicant must receive an Offer to Connect. This change is to provide sufficient time for LDCs to process Offer to Connect requests from microFIT applicants.

Existing microFIT applicants (those who applied on or after September 1, 2011) will be subject to the revised microFIT Program Rules and pricing and need to resubmit their applications by August 10, 2012. If they do so, they will maintain their original timestamp, and their application will be processed in the order in which they were originally received. New microFIT applicants will need to be patient, as their applications will not be processed until after all resubmitted applications from existing applicants have been processed.

The final FIT Rules and Contract will be posted shortly, and information on the small and large FIT application windows will be provided when details have been finalized.

Alberta Court of Appeal upholds landowner's right to terminate easement

In January of this year, I posted a blog about an interesting case in Alberta concerning the right of a landowner to terminate a utility easement agreement (Alberta Court Rules in Favour of Landowner).  The land in question had been owned originally by the CPR, which had a right to terminate the right of way of the utility.  The lands were transferred to the current owner, who then gave notice of termination to the utility.  The Alberta Court of Queen's Bench decided that the right to terminate could be assigned to the new landowner and that the right could be exercised.

In a recent decision, the Alberta Court of Appeal has agreed.  The Court of Appeal agreed that the agreements were not personal contracts, and were validly assigned to the new owner (Remington Development) including the right to terminate.  The Court rejected the utility's argument that the easements were actually only licenses that could not be assigned; it found that even if the agreements were licenses, they could be assigned. 

With the decision, the utility has no land rights to maintain its power transmission operation on the lands in question.  It will either have to obtain a further agreement from the landowner or attempt to expropriate the rights through the applicable regulatory process.

Read the decision at: Remington Development Corp. v. Enmax Power.

NTSB Reports on Enbridge Kalamazoo Rupture

Among the conclusions reached by the National Transportation Safety Board (NTSB) in its review of the Enbridge Pipelines rupture near the Kalamazoo River in Michigan in July, 2010 are:

• The Line 6B segment ruptured under normal operating pressure due to corrosion fatigue cracks that grew and coalesced from multiple stress corrosion cracks, which had initiated in areas of external corrosion beneath the disbonded polyethylene tape coating;
• Enbridge's delayed reporting of the "discovery of the condition" by more than 460 days indicates that Enbridge's interpretation of the current regulation delayed the repair of the pipeline;
• Enbridge's integrity management program was inadequate because it did not consider the following: a sufficient margin of safety, appropriate wall thickness, tool tolerances, use of a continuous reassessment approach to incorporate lessons learned, the effects of corrosion on crack depth sizing, and accelerated crack growth rates due to corrosion fatigue on corroded pipe with a failed coating;
• PII Pipeline Solutions' analysis of the 2005 in-line inspection data for the Line 6B segment that ruptured mischaracterized crack defects, which resulted in Enbridge not evaluating them as crack-field defects;
• The ineffective performance of control centre staff led them to misinterpret the rupture as a column separation, which led them to attempt two subsequent startups of the line;
• Although Enbridge had procedures that required a pipeline shutdown after 10 minutes of uncertain operational status, Enbridge control centre staff had developed a culture that accepted not adhering to the procedures;
• Had Enbridge operated an effective public awareness program, local emergency response agencies would have been better prepared to respond to early indications of the rupture and may have been able to locate the crude oil and notify Enbridge before control centre staff tried to start the line;
• Had Enbridge implemented effective oil containment measures for fast-flowing waters, the amount of oil that reached Talmadge Creek and the Kalamazoo River could have been reduced;
• Enbridge's failure to exercise effective oversight of pipeline integrity and control centre operations, implement an effective public awareness program, and implement an adequate postaccident response were organizational failures that resulted in the accidenct and increased its severity.

The NTSB also commented that, "contributing to the accident was the Pipeline and Hazardous Materials Safety Administration's (PHMSA) weak regulation for assessing and repairing crack indications, as well as PHMSA's ineffective oversight of pipeline integrity management programs, control center procedures, and public awareness."