Enbridge plans to remove 0.6% of its pipelines on abandonment

Enbridge Pipelines Inc. plans to remove only 0.6% of its nearly 8,000 km of pipelines in Canada at the time of abandonment.  For agricultural land, only lands with "prospective future development" would have pipelines removed.  Pipelines would be abandoned in place in all other agricultural land with no "special treatment" for the pipelines.  This would include pipelines with a diameter of up to 48 inches.  More than 5,000 km of Enbridge pipelines run through cultivated land.   The 0.6% figure contrasts sharply with the 20% number identified by the National Energy Board (NEB) in its abandonment funding documentation.

Enbridge has applied to the NEB for approval of its plan for abandonment funding purposes.  The documents comprising Enbridge's application can be found at: Physical Plans for Abandonment and Preliminary Cost Estimates. 

Enbridge's application includes excerpts from a Praxis Research study conducted for the Canadian Energy Pipeline Association (CEPA).  The study consisted of a landowner survey, and Enbridge says that its abandonment plans took the results of the survey into consideration.  However, more than 50% of respondents with Enbridge pipelines expressed concern about Enbridge pipelines being left in the ground.  Read the study excerpt at: CEPA Landowner Survey.

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.

Canadian pipeline companies tell NEB to limit funding for intervenors

The Canadian Energy Pipeline Association (CEPA) has submitted comments to the National Energy Board (NEB) related to plans for the funding of participation in NEB processes by intervenors such as directly affected landowners.  In a letter addressed to the Secretary of the NEB, CEPA says that it believes it is "uniquely placed to offer our observations based on past experience."  In sharp contrast to the position taken by CEPA-member companies in the past, CEPA now suggests that funding for costs is an "appropriate and fair way" for intervenors to bring their views forward.  However, CEPA also says that:

Participants should be held accountable for their contribution to decision-making processes. Upon receipt of a cost claim (or through what ever accounting mechanism is adopted), NEB should conduct a post-hearing evaluation of the relevance of a participant’s contribution to the hearing, and costs should be awarded based on that evaluation. Cost awards should not necessarily cover 100% of costs incurred.

CEPA advocates close control of eligibility for costs and holding participants accountable for their "performance".

Read the CEPA letter at: Sept. 28, 2010.

CEPA responds to NEB questions about crossing pipelines for farming activities

A couple of weeks back, the National Energy Board wrote to CEPA (the Canadian Energy Pipeline Association) to request an update on the pipeline industry's progress in dealing with the issue of safe crossing for farming equipment and activities.  On April 28, 2010, CEPA responded by letter addressed to the Board's Secretary: CEPA Letter to NEB April 28, 2010.

Currently, farming activities over pipelines and in the 200 foot "control zone" created by the NEB Act are governed by the Act and the Pipeline Crossing Regulations.  Certain activities in the control zone, including deep tillage or tile repair, require the permission of the NEB itself.  Alternatively, landowners may seek permission from the pipeline company involved under the Regulations.

However, permission to cross a pipeline and pipeline easement with farming equipment (including in the course of activities such as cultivation, planting, spraying, harvesting, etc.) can only be granted by the pipeline company pursuant to Section 112(2) of the NEB Act.  In its letter to the NEB, CEPA says of Section 112(2) that leave is "not necessary for the operation of a vehicle or mobile equipment across a pipeline if the pipeline company has assessed the operation and the operation does not have the potential to damage the pipeline."  Apparently this must be the practice of CEPA-member companies, because neither the Act nor the regulations provide this guidance.

The letter also refers to an "innovative self-screening tool" to be rolled out by Enbridge Pipelines Inc. in the "near future".  In crossing the pipeline or conducting activities in the control zone, it looks like it will still be up to individual landowners to decide whether or not permission from the pipeline company and/or NEB is required to carry out their farming operations, leaving liability for making the wrong decision with the landowner.