Claim for contamination damages against MOECC allowed to proceed

In September, 1990, an oil spill occurred on a property owned by Shell.  The spill released approximately 9,000 litres of oil, and clean-up measures were undertaken.  Nearly 23 years later, in the spring of 2013, a neighbouring landowner whose property was 100 feet away from Shell's property became aware of the spill.  The landowner had the soil and groundwater on his  own property tested for contamination;  testing confirmed that his property was contaminated with petroleum and that the source of the contamination was the Shell property.

The landowner has since sued the Ontario Ministry of the Environment (now the "MOECC") for negligence on its part in the clean-up of the original Shell spill.  The landowner alleges that the MOECC is liable for damages because it "decided to get involved in the oil spill on the Shell property, made the decision as to where the excavation of contaminated should stop, erred in failing to ensure that the contaminants were contained; as a result the plaintiff’s property became contaminated; and the plaintiff sustained damages."

In response to the lawsuit, the MOECC brought a motion to strike the claim against it on the basis that it is "plain and obvious" that there is no reasonable cause of action that can be sustained against the MOECC.  The argument by the Ministry was that it owed no duty of care to the neighbouring landowner.  The Ministry argued that it was under no duty to perform any of the tasks described in the Environmental Protection Act, as they were discretionary only.  Therefore, any failure to perform those tasks could not form the basis of a negligence claim.

In deciding the motion, Justice Ray of the Superior Court of Justice accepted that the powers of the MOECC under the Act are discretionary, but ruled that the fact that the powers were discretionary did not preclude a finding that the MOECC owed the neighbouring landowner a duty of care.  As noted by Justice Ray:

Once the [MOECC] embarks on a course of action (whether obliged to do so under a legislative scheme, or has chosen to do so under discretionary powers) the [MOECC] is obliged to carry out that course of conduct without negligence.  There is then a sufficient proximity for the basis of a private law duty of care.

The MOECC's motion to strike was dismissed and the negligence claim against the MOECC is allowed to proceed.

Read the decision at: Swaita v Her Majesty the Queen in Right of Ontario (Environment).

Ontario: Licensing Private Natural Gas Wells

The Ontario Ministry of Natural Resources (MNR) has now released the final version of its "Approach for Licensing Private Gas Wells".  This internal operating policy directive establishes the criteria by which operating, pre-existing private gas wells can become licensed by the MNR under the Oil, Gas and Salt Resources Act.  The requirement for a license came into effect for all wells, private or commercial, in June 1997.  However, many private wells were not licensed.

The policy directive clarifies the terms and establishes minimum guidelines for licensing pre-existing private wells.  According to MNR, the policy addresses potential safety and environmental risks posed by those wells, while recognizing the benefits of having private well operators come forward to obtain a well licence.  Read the policy directive at: Licensing Existing Private Natural Gas Wells.

On the Environmental Bill of Rights Registry, the MNR has also posted a summary of various comments it received during the review process and its responses to these comments:

1. “Private Use” of Gas

Comment: Natural gas from these wells is often consumed by someone on a property other than the one on which the gas well is located. Such a transfer of gas, or the transfer of a gas well itself in some cases, may have been captured in a written agreement between the two parties who believe they are acting within the law. The policy describes any sale of gas as disqualifying the well from being considered as “private use”. The suggestion was made to allow flexibility to recognize these ‘good faith’ agreements as being within the definition of private use.

MNR Response: To accommodate these types of agreements, the interpretation of “private use” has been revised to include persons with a legal interest in the well. MNR recognizes that such agreements exist and will have various levels of complexity and sophistication. Agreements will be examined on a case-by-case basis to determine if there is substantial evidence to support the legitimate use of gas by someone other than the well owner.

2. Annual Consumption of Gas

Comment: The policy requires that the annual consumption of gas from a well be less than 10,000 m3 for it to be considered a private well. Some respondents commented that this threshold should be removed from the policy altogether. Others commented that the limit was too low and should be increased to accommodate farmers who use the gas in the operation of their farm (for drying crops, heating outbuildings, etc).

MNR Response: The annual consumption limit has been removed from the policy.

3. Adjacent Lands

Comment: The policy allows for use of gas on “adjacent” properties so long as those properties are owned by the well operator. The meaning of the term “adjacent” needs to be clarified.

MNR Response: The term adjacent has been clarified in the policy to mean “two properties that share a common boundary.”

4. Pipelines Crossings Right-of-Ways

Comment: Transmission of gas through a pipeline crossing or alongside a municipal road allowance or right-of-way disqualifies the well for licensing unless the pipeline is inspected by the Technical Standards and Safety Authority (TSSA) and authorized by the municipality. A number of respondents were uncomfortable with the idea that TSSA might be contacted by MNR, because TSSA operates on a cost-recovery basis and could cause undue hardship for well owners.

MNR Response: MNR is responsible only for the licensing of the gas well. The intention of this requirement was to ensure well owners recognized that MNR’s gas well licence may not be the only approval needed for the operation of a private well. The wording in the policy has been revised to make clear that it is the responsibility of the well owner to obtain any other necessary approvals that may be required to use and/or transmit gas from a private well. The onus to seek other approvals rests solely with the well owner or operator and will not be a condition of licensing.

5. Qualified Persons

Comment: The list of Qualified Persons in the policy should be expanded to include technicians and technologists, not just engineers, geoscientists, and Examiners. Respondents pointed out that the cost of using an engineer, for example, may be prohibitive.

MNR Response: The policy is revised to state that other persons not already qualified as Class II Examiners may seek to qualify as a Class II Examiner and thereby become a Qualified Person. This would include someone certified as an engineering technologist (C.E.T.) or certified technician (C. Tech) with the Ontario Association of Certified Engineering Technicians and Technologists.

6. Cementing Around the Wellhead

Comment: Generally respondents felt that the requirement to cement around the wellhead was not practical and should be removed from the policy. The freezing and thawing of the ground around the wellhead will cause the cement to fracture and break apart, defeating its intended purpose. In some locales, the ground around a well is made of hard clay and is already impervious to water.

MNR Response: MNR has removed the requirement to cement around the wellhead from the minimum Acceptable Well Conditions described in the policy. However, it is still required that the ground around the wellhead be sloped away in all directions to prevent the pooling of water in the vicinity of the well.

7. Setbacks

Comment: Setbacks from buildings and other infrastructure were the subject of many responses. Some pointed to the fact that many wells had been encroached upon by development (i.e. were there prior to the infrastructure, not vice-versa) and therefore the setbacks unfairly penalize the well owners. The 30 metre (m) setback from a property boundary was the subject of most comments. People noted that many wells were purposefully placed near a property boundary to keep them from obstructing farming operations. Others remarked that utility installations were often located within 10m of a roadway and felt that private gas wells were being unfairly penalized by requiring a 10m setback from the road allowance.

MNR Response: MNR has made the following changes to the setbacks in the policy:

• The 30m setback from a property boundary has been removed.
• Reduced the setback from road allowance to 5m (from 10m).
• Removed the 50m setback from Great Lakes and tributaries. A 15m setback will apply to water bodies.

Other setbacks, namely the 30m setback from private residences and the 75m setback from public buildings, remain unchanged. However, the ministry will consider a reduced separation distance if it is supported by the opinion of a professional engineer hired by the well owner.

8. Term of Licence

Comment: A number of respondents did not agree with limiting the term of a private gas well licence to 10 years. Some thought it should be longer than 10 years; others thought that there term should not be limited at all. There was a general concern that the licensing conditions will be different in 10 years time and wells that had previously received a private licence would no longer qualify.

MNR Response: The policy has been changed so that licences will be eligible for a 10-year renewal upon expiry. The 10-year renewal is subject to an evaluation confirming that the well continues to meet the requirements expressed in the policy.

9. Transfer of Licence

Comment: Most respondents agreed that a private well licence should be transferable to a new land owner. One person suggested that the requirement for an evaluation prior to transfer be waived if the well had recently been evaluated.

MNR Response: The well licence will be transferable without the requirement for a new evaluation if the well owner can provide proof that the well had been evaluated within the last year.

10. Safeguards

Comment: The policy requires that methane detectors be installed in buildings being supplied gas from a private well and that barriers be built around a well with the potential to be struck by a vehicle. Although several respondents recognized methane detectors would improve safety for those using the gas, it was felt by some that that it was not within the MNR’s authority to establish such a requirement. Several respondents supported the requirement for barriers to protect the well where there was potential for a vehicle to collide with the well.

MNR Response: The safeguard section has been reworded to recommend the installation of methane detectors and vehicular barriers as a “best practice”.

11. Incentives

Comment: Many respondents who commented on the proposed incentives thought that the MNR should pay the entire cost of upgrading or decommissioning a well. One commentor suggested that the MNR pay for half (50%) of the well operator’s cost to become compliant. Another commentor did not support the use of government resources to upgrade or decommission private wells.

MNR Response: The MNR has decided to proceed with incentives to help well operators meet the requirements established by the policy.

"Enbridge not telling entire story about pipeline, hearing told": Toronto Star

John Spears of the Toronto Star published an article about the Line 9 Reversal Hearing before the National Energy Board in London that concluded yesterday.  Spears refers to the submissions made on behalf of environmental groups and the Ontario Pipeline Landowners Association (OPLA), which represents landowners along the length of the Enbridge crude oil pipeline corridor in Ontario. 

Read the article at: Line 9 Reversal Hearing.

Former Pipeline Inspector attacks TransCanada construction practices

Mike Klink, formerly a pipeline inspector for Bechtel, recently wrote an editorial piece expressing concern over the workmanship he witnessed during the construction of TransCanada's Keystone Pipeline and the risk that it will be repeated in the construction of the Keystone XL pipeline.  Bechtel was an inspection company working on behalf of TransCanada.  Klink says that he witnessed the use of substandard steel that cracked during welding, faulty safety tests and the installation of insufficient foundations.  He warns, "If it were a car, the first Keystone would be a lemon.  And it would be far worse to double down on a proven loser with Keystone XL."  Klink points to fourteen spills as having already occurred on the relatively new Keystone pipeline.

Read the opinion piece at: journalstar.com

NEB to hold oral public hearing for Enbridge Line 9 Reversal Application

The National Energy Board (NEB) announced yesterday that it will convene an oral public hearing to review Enbridge's application to reverse the flow of its Line 9 oil pipeline through southern Ontario.  The pipeline has been flowing westward since 1999.  When initially constructed in 1975, the flow direction was eastward. 

The Draft List of Issues for the hearing includes the need for the project; the engineering design and integrity of the pipeline, including the potential effects of flow reversal; contingency planning for spills, accidents or malfunctions, during construction and operation of the pipeline; the potential environmental and socio-economic effects of the project; the project’s potential impacts on Aboriginal interests; and its potential impacts on affected landowners.

Financial assistance will be made available through the Participant Funding Program to "applicants who meet the criteria and can demonstrate a need to support their timely and meaningful involvement in the proceeding."

Enbridge to abandon 75 miles of the oil pipeline that contaminated the Kalamazoo River

Noel Griese of the Energy Pipeline News is reporting that Enbridge Energy Partners plans to replace 75 miles of pipeline in Michigan and Indiana related to the July, 2010 spill into the Kalamazoo River.  The Michigan Public Service Commission will be holding public hearings into the proposal, beginning with a pre-hearing conference on September 21.  Read Griese's article at: Energy Pipeline News.

The original announcement was made on May 12 in Houston:

HOUSTON, TX, May 12, 2011 (MARKETWIRE via COMTEX) --

Enbridge Energy Partners, L.P. (NYSE: EEP) (the "Partnership") today announced additional capital investments to replace portions of its Line 6B pipeline system that spans from Griffith, Indiana, through Michigan to the international border at the St. Clair River. This program will include replacement of approximately 75 miles of the pipeline in various locations in Indiana and Michigan, at an estimated cost of $286 million. These costs will be recovered through the Facilities Surcharge Mechanism ("FSM") that is part of the system-wide rates of the Lakehead system.

Earlier this year, the Partnership completed the replacement of 14 segments, totaling 9,000 feet, of Line 6B in southeastern Michigan and installed a new segment of pipeline under the St. Clair River, which will be operational by late June. This latest investment includes the replacement of five miles of pipeline immediately downstream of two pump stations in Indiana and three pump stations in Michigan as well as replacement of 50 miles of pipeline downstream of the Stockbridge station and delivery terminal northwest of the Detroit metro area. Subject to regulatory approvals, the new segments of pipeline will be installed in 2012 and will be staged to be placed in-service in consultation with, and to minimize impact to, refiners and shippers served by Line 6B crude oil deliveries.

The $286 million expenditures are in addition to the $210 million integrity expenditures on Line 6B recently announced by the Partnership for the year 2011, of which $175 million will be recovered through the FSM.

In actual fact, Enbridge is proposing to construct a new pipeline alongside the existing pipeline in a new 25 foot wide right-of-way.  Enbridge will abandon the existing pipeline in place, saying that this will "minimize additional disturbance along the route".  Enbridge has provided responses on its website to "frequently asked questions" for affected landowners, including questions about construction, disturbance and compensation: Frequently Asked Questions.

PetroBakken Energy seeks to abandon oil pipeline in place

In what is likely to become a more common occurrence, PetroBakken Energy Ltd. has applied to the National Energy Board for permission to abandon one of its pipelines in the ground.  The pipe is 580 metres in length and is connected to an oil well within the Alsask Gathering System, about 30 km east of Oyen, Alberta (it crosses the border with Saskatchewan).  Construction of the line was approved by the NEB in 2003, and the well ceased production in 2009. 

PetroBakken says it has no plans to put the line back into operation and now must either suspend the line, maintaining cathodic protection, or abandon it.  PetroBakken says that maintaining cathodic protection on the line to avoid corrosion is too expensive, so it chooses to attempt to clean the line and then leave it in place.  On the issue of "liability exposure", PetroBakken states in its application to the NEB:

The proposed abandonment of the pipeline segment is largely driven by legal obligation to meet the requirements of NEB regulation, which indicates that PetroBakken must either suspend or abandon any pipeline that has not operated for over 12 months.  Secondarily, but equally, or more importantly, the proposal to abandon is also being done for ethical reasons as the potential for ground contamination by the (unknown) product within the pipeline must be eliminated.  Leaving this potential risk in the ground (for no operational benefit) would be an unjustified environmental liability for PetroBakken, which could be minimized or eliminated by cleaning and abandoning the pipeline segment.

As the volume of contents remaining within the pipeline segment is uncertain, the environmental liability to the organization is unknown.  The cost to abandon is expected to be less than $10k, which is considered minimal when considering the potential environmental liability.

The Saskatchewan land affected by the line is privately owned.  PetroBakken says that it notified the landowner by phone and was told that the proposed abandonment was "fine".  The Alberta land is in a Special Area and is leased to a farmer.  Again, notification of the project was given by phone and the farmer apparently had "no issues".  The lands affected by the pipeline are apparently used for grazing purposes on both sides of the provincial boundary.

At about 1/2 a kilometre in length, this is a short pipeline to be abandoned.  However, it does give some indication of what might be in store for other landowners across the country facing pipeline abandonment in the future.  The NEB has issued a hearing order for the abandonment application, but no funding has been available for participation in the hearing either by directly affected landowners or other concerned parties.  Therefore, anyone wishing to participate in the process will do so at his or her own cost.  Unlike the situation in provincial jurisdictions, the NEB will make no costs award at the end of the process. 

This application demonstrates the failings of the NEB's recent creation of a participant funding program.  It is assumed that no funding has been made available in this case because of the relatively short length of the pipeline involved (participant funding is reserved for "large projects").  However, for the landowners directly involved, the pipeline is quite long enough to cause concern.  How long does a pipeline have to be before directly affected landowners will have access to "participant funding"?  Is the participant funding sufficient in any event to enable landowners to test the appropriateness of the abandonment plan that is being proposed? 

And can we expect moving forward that pipeline companies will choose to abandon small segments of pipeline on a continual basis rather than applying for the abandonment of large pipeline segments so as to avoid the participant funding program?  The NEB has made it quite clear in its previous decisions that it will allow companies to decide how they make their regulatory applications, even where it is clear that the manner in which those applications are made is intended to thwart the ability of landowners to participate in the process.

Read the PetroBakken application at: Abandonment Application.

Read the NEB Hearing Order at: Hearing Order dated September 6, 2011.

Enbridge files Line 9 engineering assessment

Enbridge has filed an engineering assessment of its Line 9 oil pipeline with the National Energy Board (NEB) as part of an application for approval of a flow reversal.  The assessment addresses risks of internal and external pipeline corrosion, stress corrosion cracking and mechanical damage to the pipeline and provides information obtained from recent investigative digs and associated testing.  Read the assessment at: ENGINEERING ASSESSMENT FOR LINE 9 REVERSAL PHASE 1.

Enbridge spill into Kalamazoo River showing added risks of tar sands oil

One year ago on July 26, 2010, Enbridge Pipelines Inc. spilled more than 3.8 million litres of oil in Michigan after one of its pipelines ruptured.  More than 1.5 million litres ended up in Michigan waterways, including the Kalamazoo River.  Enbridge says that 3.48 million litres have been recovered.  News stories in the past couple of days are revealing the difficulties faced by clean up crews in recovering the last few hundred thousand litres.  The problem is the nature of the product spilled - bitumen from the Alberta tar sands mixed with "light hydrocarbons" refined in the U.S.  The heavy bitumen component is proving difficult to collect. 

The spill affected a 65-kilometre stretch of the Kalamazoo River.  The river has been closed off to recreational paddlers, fishermen and any other users since the spill.

Read the Financial Post article "Enbridge cleanup: Aftermath of a spill" by Sheldon Alberts at this link.

Meanwhile, Enbridge's latest newsletter called "eBridge", Volume 70, doesn't mention the Michigan spill (or the Norman Wells spill for that matter), but does celebrate Enbridge's ranking as #10 out of the Best 50 Corporate Citizens in Canada by "Corporation Knights" ("The Magazine for Clean Capitalism").

National Energy Board says it's shifting from "reactive" to "proactive"

The National Energy Board (NEB) says it has decided to increase the number of pipeline performance measures beyond those currently collected by the Board through incident reporting requirements in the Onshore Pipeline Regulations, 1999.  The NEB claims this initiative will supplement existing measures such as spills and injuries with performance measures of activities that require planning and ongoing monitoring. This is anticipated to bring a predictive dimension to how a company manages its programs. The measurement of performance is intended to promote a shift from reactive to proactive management. Companies will be able to use the resulting data to trend and compare performance, and to encourage continual improvement. The NEB will also use the data to assist in compliance verification planning.

The NEB's Background Information enclosure describes deficiencies in its current overview of security and the environment:

The Board currently requires companies to report on incidents, such as releases of substances and serious injuries. These measures are "lagging indicators" because the information provides a historic view. The Board is taking action to promote safety, security and environmental protection by proposing that all Board-regulated companies also report on "leading" performance measures. "Leading" measures are predictive and forward looking, measuring aspects of processes and activities that are likely to contribute to a desired outcome. A mix of leading, lagging and qualitative measures can provide an overview of the effectiveness of a company in meeting program objectives.

Read the NEB's letter to Oil and Gas companies at: July 11, 2011 letter.

Enbridge's latest update on the Norman Wells spill

Here is the latest from Enbridge on its spill of between 700 and 1,500 barrels of oil near Wrigley, NWT:

On May 9, Enbridge Inc. reported that it had confirmed at approximately 12:40 MT that day a crude oil leak from a pipeline on its Norman Wells System (Line 21) approximately 50 km south of the community of Wrigley, NWT. On May 20th Enbridge returned the Norman Wells line to service after completing the necessary repairs.

Enbridge is working to minimize helicopter traffic in the Willowlake River area. A 25-person camp is being established near the incident site to house crews while they continue cleanup and reclamation work. The camp is expected to be open this week. There has been an increase in truck traffic on the Mackenzie Highway between Fort Simpson and Wrigley due to the incident. We want to ensure the safety of our crews and the people in the community and ask that everyone use caution when travelling on the highway.

The oil remains contained and there are no impacts to moving water. Our original four barrel estimate was based on oil collected at the surface and did not take into account the subsurface impacts, which were believed to be not significantly different. The increase in subsurface oil was discovered during the ongoing environmental site assessment, which includes subsurface analysis and is standard practice for all releases. Based on current estimates provided by the third party experts on site, Enbridge anticipates the release volume could range from a minimum of 700 barrels to a maximum of 1,500 barrels. Based on its current analysis, Enbridge anticipates the probability that the maximum volume would be exceeded to be low.

Enbridge continues to regularly engage with First Nations, government officials and the public and we are committed to having open dialogue and transparent communications. The community information line remains operational and the phone number is 867-695-3158. People are encouraged to call if they have any questions regarding the incident.

The safety of people and the protection of the environment are our highest priorities and the Company is doing its best to ensure there is no impact to the land, wildlife and waterways. We are committed to regaining the community’s confidence in Enbridge as a reliable operator and safe transporter of energy.

[emphasis added]

Pinhole in Enbridge pipelines leaks up to 1,500 barrels of oil

Noel Griese of the Energy Pipeline News has a report on a recent Enbridge Pipelines oil spill in the Northwest Territories at: Enbridge says no coverup in its underestimate of N.W.T. pipeline spill.  At first, Enbridge had reported a spill of four barrels from its Norman Wells pipeline.  Now the estimate is between 700 and 1,500 barrels.  Griese reports that Enbridge officials say the oil leaked out of a pinhole opening in the pipeline.

Enbridge's own statement at http://www.enbridge.com/ says that the original estimate "did not take into account the subsurface impacts".  Enbridge had expected that the amount of oil underground would not be significantly different than the oil on the surface.  Enbridge notes that there are "no impacts to moving water", but does not address any potential impact on groundwater. 

Pinhole leaks in pipelines pose a significant problem for landowners with oil pipelines.  Subsurface pipelines can leak large quantities of oil over long periods of time without the leaks being detectable to pipeline company monitoring equipment.  Areas around leaks can be significantly contaminated, but the contamination may never be discovered unless it rises to the surface of the ground or, more often, the pipeline company has some reason to dig up the area.  For example, contaminated areas have been discovered frequently during the construction of new pipelines adjacent to existing pipelines. 

At present, neither pipeline companies nor energy regulators are taking any initiative to locate contaminated areas along existing pipelines.  It may be time for property owners to demand extensive soil testing along oil pipelines on an ongoing basis to ensure that their land is not being contaminated by undetected leaks in pipelines.

Sierra Club asks NEB for intervenor funding to participate in offshore drilling consultation process

The National Energy Board has recently publicized its move toward introducing a funding process for intervenors in its public hearings.  The Sierra Club has written this week to request funding to participate in a consultation process concerning offshore oil drilling in Canada.  Will funding be made available? 

Same Season Relief Well issue before the NEB - What will be done in Canada to avoid a repeat of the BP disaster here?

Somewhat ironically, the National Energy Board had started a hearing process in February, 2010 to review its Same Season Relief Well (SSRW) policy, just weeks before the BP drilling rig explosion and oil spill in the Gulf of Mexico (relevant documents can be viewed at: MH-1-2010.  BP has been criticized for not having relief wells in place to reduce the pressure in its damaged well that is now spewing oil onto the Gulf coast. 

Here's what BP said in its submission to the NEB in March:

As will be discussed in greater detail below, for both technological and operational reasons, continuance of the SSRW capability is not required and is problematical for BP and other operators, and may well impede further exploration in the Beaufort Sea.

BP is advocating that the policy be changed by eliminating the requirement for same season relief well capability, and any time-of-year drilling restrictions associated with that policy. In BP's view, consistent with the on-going development of goal-oriented regulation, the Board should utilize a series of goals and objectives to enhance safety and protection of the environment.

That was in March.  Of course, in April, BP's operations in the Gulf of Mexico have initiated the worst environmental disaster in the United States since the Exxon Valdez.  Is "goal-oriented regulation", which is the NEB's policy in dealing with safety and the environment, right for Canada?  Where the goal is to avoid environmental disasters, does "goal-oriented" regulation (i.e. set the goal and let industry decide what needs to be done to achieve the goal) do any good?

For its part, Conoco Phillips wrote to the NEB on Monday to suggest that the hearing process be put on hold pending the investigation of the BP disaster: Conoco Phillips to NEB.

Alberta Court of Appeal rules 2 to 1 against Imperial Oil appeal in pipeline contamination case

The Alberta Court of Appeal has dismissed the appeal by Imperial Oil of an award of damages to a rancher for injury to her cattle caused by leaking oil.  One of the three appellate judges, however, wrote a dissenting opinion that would have found Imperial Oil not liable for the damages alleged.  Agnes Ball, the rancher involved, leased grazing land from the Alberta government in the "School Section", and alleged that during Imperial's clean up of an oil leak from its pipeline, Imperial negligently allowed her cattle to ingest hydrocarbons.  The ingestion resulted in premature calving and loss of calves.  Ball had been away on vacation at the time of the leak and the trial judge found that, although Imperial attempted to communicate with Ball through her daughter, Imperial did not ask for permission to enter on the land (outside of its easement) or advise her of the type of work required or its urgency.

At trial, the Alberta Court of Queen's Bench judge found that Imperial Oil had a duty to give adequate prior notice of its intended repair work and to “adequately protect the Plaintiff’s livestock from exposure to Hydrocarbons and hydrocarbon contaminated soil and water”, (reasons at para. 116). He went on to find Imperial Oil had breached that duty by failing to give adequate notice of the repair work and by “pouring contaminated water on the ground and leaving contaminated soil unfenced”, (para. 116). He also found that Imperial Oil allowed the escape of a noxious substance and, thereby, created a nuisance. In light of these findings, he found it unnecessary to deal with the claim in trespass; nor did the parties make any submission on the appeal with respect to this alleged cause of action.

Two of the three Court of Appeal judges hearing the case rejected all of the grounds of appeal advanced by Imperial.  One judge, however, found that:

the trial judge committed an error of law in determining that the respondent was only required to prove some “exposure” to risk by the cattle. The respondent had to prove consumption of contaminated soil and water of sufficient quantities and toxicity to cause injuries on a balance of probabilities. The trial judge used the wrong legal test for causation. As a result, he failed to make the findings of fact needed to apply the correct “but for” test. The reasons at trial do not contain findings of fact on some of the key topics that are needed to resolve the causation issue. The only alternative available is to allow the appeal, and direct a new trial.

It remains to be seen whether Imperial will seek leave to appeal this decision to the Supreme Court of Canada.

Read the Court of Appeal decision at: Ball v. Imperial Oil Resources Limited.

Read the trial decision at: Ball v. Imperial - Court of Queen's Bench.

Enbridge oil spills into Manitoba creek

CBC News - Manitoba - Oil spills into Manitoba creek

A leak in an Enbridge pipeline has spilled 1,500 litres of oil into a creek near the town of Virden, MB. Click on the CBC link above to view the news story. For pictures of the spill and details of the clean up, check out the Kipperstein Press blog and the message board at eBrandon.ca.

Pipeline clean up tax in South Dakota being opposed by TransCanada

Noel Griese of the Energy Pipeline News is reporting on a move by South Dakota to charge an environmental clean up tax on pipelines carrying oil.  The tax rate would be 2 cents per barrel for pipelines carrying more than 10,000 barrels per day.  The money collected would go into a fund to cover costs of cleaning up oil releases, but the fund would be capped at $30 million. 

TransCanada Pipelines Limited, which plans to build the Keystone XL oil pipeline through South Dakota, opposes the tax.  TransCanada suggests it will lose an estimated $38 million in tax incentives.  Wayne Ortman of The Oklahoman reports that Dennis Duncan, a lobbyist for TransCanada, says that the company would be paying $20 million in property taxes annually on the pipeline and that the new tax bill could damage South Dakota's pro-business and tax friendly image.

Read the articles at the following links:
Noel Griese Article at Energy Pipeline News
Wayne Ortman article at NewsOK

The continuing perils of fuel oil leaks

I don't know if there has been increase in the incidence of fuel oil leaks and spills, but I have noticed a fair number of reported court cases and news stories about the problem in the past year or so. Most often a spill occurs when a fuel oil supplier is delivering oil to a homeowner. I can recall a recent story out of Newfoundland where a fuel supply company pumped oil into an intake pipe at the side of a house only to discover that he was at the wrong house and the intake pipe led directly to the basement (the former oil tank had been removed).

On February 19, the Nova Scotia Supreme Court issued a decision in a case involving a leaking storage tank in a hotel/office building complex - Park Place Centre Limited v. Ultramar Ltd. and G&S Haulage Limited. Ultramar supplied the fuel oil. G&S was hired by Ultramar to deliver the oil. On one delivery date, oil was pumped into the storage tank and leaked out into the building through a breach in the tank. The cost of clean up was more than $300,000.

In the end, liabilty for the main part of the plaintiff's damages claim was apportioned 70%/30% between the two defendants and the plaintiff itself. The Court found that G&S was negligent in
filling the tank without taking proper precautions to ensure that it would not leak. The Court found Ultramar vicariously liable for the damage caused by G&S, since Ultramar owed a duty to the plaintiff to ensure that G&S took reasonable care in delivering the fuel oil. The Court also found that Ultramar had breached an implied term of its contract with the plaintiff, namely that it would deliver fuel oil safely in a manner that would not allow it to escape from the tank.

The plaintiff, Park Place, however, was not without its own responsibility for the spill. The Court found the plaintiff contributorily negligent to the tune of 30% because it had done almost nothing in the years since the tank was installed to ensure that the tank was in proper order and did not ensure that the tank room itself was liquid tight. The Court ruled that an "ordinary, reasonable and prudent operator of a hotel and office complex" would have recognized the importance of ensuring that oil would not escape from the tank room.

Read the decision at:
http://www.canlii.org/en/ns/nssc/doc/2010/2010nssc39/2010nssc39.html

Too much new pipeline capacity to take oil sands to the US?

Noel Griese at Energy Pipeline News reports that Suncor and Imperial Oil are accusing Enbridge Pipelines Inc. of overbuilding pipeline capacity into the U.S. when it is not needed. Enbridge is in the process of completing the Alberta Clipper pipeline to carry Alberta oil sands oil to refineries in the United States. At the same time, TransCanada is proceeding with the Keystone XL pipeline designed to do the same thing. Now Suncor and Imperial Oil have applied to the U.S. regulator for breaks on tolls payable to Enbridge. Has the expansion in the export of oil to the U.S. moved too quickly?

Read the article: http://energypipelinenews.blogspot.com/2010/02/rhubarb-over-clipper-rates-pits-suncor.html

Montreal Pipe Line Limited Applies to Abandon Pipeline in place

Montreal Pipe Line Limited has applied to the National Energy Board to abandon in place a small length of oil line that has been deactivated for several years. At the following link you can read the NEB's initial response to the application, including a number of information requests, as well as the application itself:
https://www.neb-one.gc.ca/ll-eng/livelink.exe?func=ll&objId=576050&objAction=browse&sort=-name

One of the main concerns raised about the application is the risk of future contamination. MPL acknowledges in its application that the plan is to leave the pipe in the ground unprotected and the result will be the corrosion of the pipeline.