NOVA/TransCanada withdraws application to "decommission" 266 km line

In August, 2012, NOVA Gas Transmission Ltd. (part of TransCanada Pipelines) applied to the National Energy Board (NEB) for permission to "decommission" a 266-km stretch of pipeline.  Essentially, the application would see the abandonment of the line in place, but NOVA contended that it was "decommissioning" the line because service on its "pipeline" would continue.  The NEB disagreed and directed that it would consider the application as one to abandon a pipeline.

On February 8, 2013, NOVA wrote to the NEB to withdraw its application, saying that it was reviewing its proposal in light of the NEB's comments: February 8, 2013.  The NEB confirmed this development in its letter to NOVA dated February 25, 2013.

Landowners should keep an eye on these developments.  It appears that pipeline companies are taking the position that, as long as they continue to transport materials somewhere on their pipeline systems, none of their abandonments are actually "abandonments" within the meaning of the NEB Act.  Instead, the companies will suggest that they are "decommissioning" pipelines, depriving landowners and other interested parties from public hearings, participant funding, etc.

NEB Decommissioning - Pipeline Abandonment without landowner participation

Recently I wrote about an application filed by TransCanada Pipelines Limited for the "decommissioning" of part of its NOVA pipeline system in Alberta.  The National Energy Board (NEB) has created a category of "decommissioned" for pipelines permanently removed from service, but in situations where service on the "pipeline" system continues (i.e. customers are not affected).  The responses to information requests issued to TransCanada by the NEB reveal the dangerous position into which this "abandonment but not abandonment" places landowners.

Essentially, TransCanada is abandoning its pipeline in place.  However, since there is no abandonment application required under Section 74 of the NEB Act, there does not need to be a public hearing and there does not need to be landowner participation in the decision-making process.  Even if there was participation available, landowners would have no access to participant funding from the NEB; this is not one of the types of applications for which funding is made available (much like the ongoing abandonment cost estimate hearing process in which landowners must fund their own participation).

Read TransCanada's responses to the information requests at: NOVA response.

TCPL files major decommissioning application with NEB

The NOVA Gas division of TransCanada Pipelines Limited (TCPL) has filed a major pipeline "decommissioning" application with the National Energy Board (NEB).  TCPL proposes to "decommission" in place the vast majority of a 266 km length of pipeline, capping it, filling it with an inert gas, and leaving it to corrode in the ground.  The application is at the following link: Decommissioning Application. 

Several years ago, the NEB introduced the concept of "decommissioning", which effectively allows a pipeline company to abandon its pipeline in place without having to make an application to abandon.  Where there is no application for abandonment, landowners have no access to participant funding to support their involvement in the approval process. 

NEB takes away Alberta landowner's contractual right to removal of pipeline

The National Energy Board ("NEB") has granted Nova Gas Transmission Ltd. ("NOVA") a Right of Entry order allowing it to continue the operation of its pipeline on lands owned by Albertan Randolph Hill.  Hill purchased the property from a railway company which had negotiated with NOVA and its predecessors a favourable agreement that allowed the company to require removal of the pipeline on notice.  NOVA went to court to argue that Hill was not assigned rights such as the right to require removal when he purchased the land, but the Court disagreed.  Hill issued the notice to NOVA, and NOVA went to the NEB to ask it to intervene and prevent Hill from exercising the contractual right to require removal.  Previously, the pipeline was regulated by the province of Alberta, but was recently transferred to NEB regulation by a decision of the NEB.

The terms of the Right of Entry order significantly expand NOVA's rights over the land beyond what had been agreed upon previously in contract.  This decision of the NEB confirms its willingness to override the terms of validly executed contracts between pipeline companies and landowners.  The interesting question arising out of the decision will be: what was the contract worth?  Mr. Hill is entitled to be compensated for the rights taken in the Right of Entry order.  What was his right to require removal of the pipeline worth?  What was his right to compensation under the contract worth?

Read the Board's decision and the RoE order at: NOVA Ferrier South Lateral.

NEB Approves NOVA Groundbirch Pipeline Project

The National Energy Board has released its Reasons for Decision in GH-1-2009 approving NOVA Gas Transmission Ltd.'s application for the Groundbirch Pipeline Project that will run between Alberta and British Columbia, just north of Dawson Creek.  Of note to landowners in the decision, the NEB ruled:

• "With regard to depth of cover, the Board notes that the proposed design meets or exceeds CSA Z662-07 requirements, which, in the Board's view is sufficient to accommodate ordinary agricultural practices."  The CSA standard for depth of cover is 2 feet.  The Board provided no explanation of its use of the term "ordinary agricultural practices";
• With respect to pipeline abandonment, the Board says that it "has committed to address issues related to abandonment through its Land Matters Consultation Initiative", and required no commitments on the part of NOVA;
• The Board is allowing NOVA to implement Alternative Integrity Validation (AIV) to check the integrity of the pipeline before it is placed into operation and then to apply for a partial exemption from hydrostatic testing requirements (where water is pumped through the pipe).  It is not yet, therefore, allowing full use of AIV as requested by the company;
• The South Peace Landowners Association (SPLA) raised concerns with the Board over NOVA's use of a confidentiality agreement in its consultation with landowners.  NOVA was requiring landowners to enter into a confidentiality agreement before presenting certain offers to them.  In its decision, the Board makes no ruling about the appropriateness of the confidentiality requirement, other than to say that it finds that "the impact of the Confidentiality Agreement on certain landowners and their representatives has, in part, frustrated" the objectives of NOVA's consultation program;
• In its discussion of land matters, the Board acknowledged SPLA's concerns about the confidentiality requirement and the conduct of land agents for NOVA, but impose any changes in NOVA's practices.  The Board encouraged NOVA to instruct its land agents on appropriate conduct.

Read the decision at: NEB Reasons for Decision GH-1-2009

NEB Joint Review Panel selected for Enbridge Northern Gateway Pipeline

Canada's Environment Minister Jim Prentice and the National Energy Board have appointed a three-member panel to review the Enbridge Northern Gateway Pipeline project. Two of the three appointees are members of the NEB: Sheila Leggett and Kenneth Bateman (Hans Matthews is the other). Of note, both Leggett and Bateman sat on the panels that heard and decided GH-5-2008 TransCanada's NOVA Application (transfer of jurisdiction from Alberta to Federal) and heard the Stream 3 Abandonment Funding hearing.

The NEB's announcement of the appointments can be viewed at:
http://www.neb-one.gc.ca/clf-nsi/rthnb/nwsrls/2010/nrthrngtwjrpstblshmnt-eng.pdf

What happens when a landowner actually has the upper hand?

This question may be answered by the National Energy Board in response to an application made by NOVA Gas Transmission Ltd. (NOVA) for a Right of Entry Order. A NOVA landowner, Randolph Allan Hill, purchased land with the NOVA pipeline in place from CP Rail. CP Rail, like many other railways and large industrial landowners, had in place a "landowner-friendly" crossing agreement with NOVA which provided the landowner with a right to terminate the agreement on notice and require the removal of the pipeline.

In a December 2008 hearing before the Alberta Court of Queen's Bench, NOVA tried unsuccessfully to argue that Hill, although he had purchased the land from CP Rail, was not entitled to benefit from the crossing agreement. The Court disagreed in its decision dated March 6, 2009. Subsequent to that decision, Hill served notice on NOVA that he wanted the pipeline out of the ground. NOVA has now asked the NEB to grant an order allowing it to leave the line in place, in spite of the crossing agreement.

Not surprisingly, Hill has objected to the Right of Entry application and relies on the terms of the agreement that he purchaed from CP Rail.

NEB filings related to this case can be found at: https://www.neb-one.gc.ca/ll-eng/livelink.exe?func=ll&objId=586898&objAction=browse