National Energy Board Seeking Comments on Draft Pipeline Financial Resource Requirements
For Immediate Release
February 15, 2019 – Calgary – National Energy Board
The National Energy Board (NEB) is seeking feedback on Draft Pipeline Financial Requirements Guidelines (Draft Guidelines) that aim to provide further details on the information that pipeline companies should provide to demonstrate that they meet the financial resource requirements established in the National Energy Board Act (NEB Act) and the Pipeline Financial Requirements Regulations (the Regulations).
The Pipeline Safety Act came into force on June 19, 2016. Among other changes, the Pipeline Safety Act amended the NEB Act by introducing $1 billion absolute liability level to pipeline companies with the capacity to transport greater than 250,000 barrels of oil per day, and requiring such companies to maintain the financial resources to be equal to their absolute liability level.
On June 8, 2018, the Pipeline Financial Requirements Regulations (the Regulations) were passed. The Regulations set out absolute liability limits for all other NEB regulated pipeline companies and come into force on July 11, 2019. As of that date, all NEB-regulated pipeline companies must maintain financial resources equal to their respective absolute liability limits, or a greater amount if determined by the NEB.
The NEB is seeking feedback and comments on the Draft Guidelines by March 8, 2019. Based on the feedback, the NEB will publish final Guidelines. The NEB has also set out a schedule for companies to submit Financial Resource Plans detailing how they meet the new Financial Resource Requirements.
- Absolute liability means that a pipeline company is accountable for all costs and damages up to the its absolute liability limit, regardless of whether there is proof of its fault or negligence. If a court determines that the pipeline company’s fault or negligence is responsible for a spill or unintended release, there is no limit to liability for costs and damages related to the spill.
- The NEB has assessed the financial resources of Enbridge Pipelines Inc., Trans Mountain Pipeline ULC, Plains Midstream Canada ULC, Express Pipeline Ltd., and TransCanada Keystone Pipeline Limited Partnership – all of which have a capacity greater than 250,000 barrels per day. The NEB has found them to be in compliance with the financial resource provisions of the NEB Act.
- The Regulations set out specific financial resource types that the NEB may order companies to maintain, and set out the portion of financial resources that must be held in a form that is readily accessible to companies.
- NEB Letter
- Draft Guidelines [PDF]
- National Energy Board Act
- Canada Gazette, Part II, Volume 152, Number 14
- Pipeline Financial Requirements Regulations
The National Energy Board is an independent federal regulator of several parts of Canada’s energy industry. It regulates pipelines, energy development and trade in the public interest with safety as its primary concern. For more information on the NEB and its mandate,please visit the National Energy Board website.
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