Ontario Energy Board says landowners should have right to decide on removal of abandoned pipelines

In its decision last week approving (with conditions) Union Gas' Hamilton to Milton NPS 48 pipeline project, the Ontario Energy Board ("OEB") filled a number of gaping holes in Ontario's pipeline abandonment regime.  As noted by the Gas Pipeline Landowners of Ontario ("GAPLO") in its submissions to the OEB, Ontario has virtually no rules or regulations to deal with the abandonment of provincially-regulated pipelines.  Decisions about how a pipeline will be abandoned (mainly, whether it will be removed from the ground or abandoned in place) are left to the pipeline company, with no public approval process or public hearing process in place.

GAPLO requested that the OEB require Union Gas to offer affected landowners a form of easement agreement that includes a landowner option for removal of the pipeline upon abandonment.  As part of its project approval function under the Ontario Energy Board Act, the OEB must approve the form of easement agreement to be offered by a company to affected landowners.  In its recent decision, the OEB accepted GAPLO's position and ordered Union to offer an easement agreement that includes the landowner option for pipeline removal on abandonment.

The following are excerpts from the OEB's reasons related to this issue:

The overriding consideration for the OEB is the control the landowner should have with
respect to how the land is to be treated upon pipeline abandonment. The OEB heard
evidence from Union that leaving an abandoned pipeline in place would be less
disruptive to the land than removing it. The OEB also heard evidence from GAPLO that
this might be true over the short term, but that over the longer term impacts such as
subsidence could be more disruptive if the pipeline were not removed. GAPLO
witnesses testified that for agricultural land the condition of the land is fundamental.
Their testimony indicated that this is not just a question of a farmer’s passion for the
land; it is that the condition of the land is fundamental to the farmer’s livelihood.

The OEB finds that the landowner should have the right to decide whether an
abandoned pipeline should be physically removed from the ground or dealt with through
whatever other means of abandonment may be proposed by Union. Once construction of a pipeline on a piece of property is approved, the landowner is giving up certain rights to Union, as a distribution utility, in the public interest. However, should that pipeline no longer be needed, the landowner should be able to make the fundamental decision about how the land is to be restored.

This is not a debate about deciding in advance what should be done with a pipeline that
is abandoned at a point potentially decades from now. The issue is who should make
the decision at that time. [emphasis added]

Read the full decision at: Union Gas Dawn to Parkway.

Depth of Cover Monitoring Requirements Absurd? So says the Ontario Divisional Court

Enbridge Gas Distribution Inc. has won an appeal from the dismissal of its small claims court action against a contractor over damage caused to a gas main in Holland Landing, Ontario.  Enbridge claimed that the contractor damaged the pipe when using a mechanical digging device to uncover a leaking septic tank.  Enbridge had asserted at trial that the entire incident could have been avoided if the contractor had called for a locate; the contractor was negligent.  On appeal, the Divisional Court agreed and awarded damages to Enbridge.

At trial and in the appeal, the issue of depth of cover over the pipe came into play.  The trial judge had found that the pipe was not buried at the minimum required depth (2 feet) and that Enbridge should have ensured proper depth.  However, the Divisional Court noted that there is no requirement in the applicable legislation or regulations (or the TSSA Guideline or the CSA Standard) that a gas main must remain installed at the minimum depth.

The Court reasoned:

There is no requirement that Enbridge must continually measure the depths of all of its buried pipelines. Such a finding would lead to the absurd result that utility companies would be required to constantly recheck their lines in the ground. It is a well-established principle of statutory interpretation that the Legislature does not intend to produce absurd consequences. If the Legislature intended this result, the Act, the Regulation, the TSSA Guideline or CSA Standard would have stated that utility companies must ensure that the pipes “remain” buried at a minimum depth.

Unlike the case of Sun-Canadian Pipeline v. Lockwood, where the Court found that the company had actual knowledge that the pipeline had insufficient cover on the property, there is no evidence that Enbridge had knowledge that its Gas Main was at less than the required depth at the property until after the incident occurred.

Although these comments must be read in light of the facts of this particular case, it will no doubt be of concern to pipeline landowners to find an appellate court in Canada suggesting that pipeline companies have no obligation to monitor the depth of cover over their pipelines.  In fact, the Divisional Court suggested that such a requirement would be absurd.

Read the decision at: Enbridge Gas Distribution Inc. v. Froese. 

Ontario updating protocol for fuel handling sites

The Technical Standards and Safety Act, Liquid Fuels Handling Regulation, Liquid Fuels Handling Code, Fuel Oil Regulation and Fuel Oil code govern the safe storage and handling of gasoline, diesel, fuel oil and associated products in Ontario. Due to the nature of fuel handling operations, when the escape of product into the environment or a building occurs, action must be taken to mitigate the damage caused by the escape.

The Environmental Management Protocol for Fuel Handling Sites in Ontario has been developed and updated to ensure such occurances are properly mitigated in a safe and timely manner. The application of the Environmental Management Protocol for Fuel Handling Sites in Ontario will ensure continued protection to human and environmental health and safety during fuels handling operation.  The Environmental Management Protocol for Fuel Handling Sites in Ontario will be adopted by the Liquid Fuels Handling Code and the Fuel Handling Code making it a legal requirement to follow its directives.

The Environmental Management Protocol for Fuel Handling Sites in Ontario (May 2011) will replace the previous Environmental Management Protocol for Fuel Handling Sites in Ontario (May 2007). The replacement is necessary to provide consistency with the amendments made to Ontario Regulation 153/04 by the Ontario Ministry of the Environment to the "Soil and Groundwater Site Condition Standards" for use under Part XV.1 of the Environmental Protection Act.

The proposal for the updated protocol has been posted on the Environmental Bill of Rights Registry for a 30 day public review and comment period starting May 25, 2011.  If you have any questions, or would like to submit your comments, you must do so by June 24, 2011.  The notice is posted at: Environmental Management Protocol.

The draft updated management protocol is posted on the TSSA website at: Draft Updated Protocol.