Market Snapshot: Since 2015 CER-regulated companies have set aside over $2 billion to cover the costs of abandoning their pipelines in the future
Release date: 2020-06-10
A company will abandon a pipeline (permanently shutting the pipeline down and rehabilitating the land around it) after the pipeline is no longer useful. The Canada Energy Regulator (CER) requires this be done safely and in an environmentally responsible manner. More information regarding abandonment is available on the CER website.
Pipeline owners−not landowners or governments−are liable for the costs and financing of safe and environmentally responsible pipeline abandonment. In 2014, the CER required the companies it regulated to collect and set aside funds to cover future pipeline abandonment costs. Over $2 billion has already been set aside for abandonment funding, and more money is being set aside every year.
Figure 1. Abandonment funds in trusts for CER regulated pipelines
Source and Description
Description: The graph shows the amount of money collected in trusts which started at $0 in 2014 and has grown to over $2.1 billion in 2019.
The interactive graph shows the total amount set aside in trust funds. You can select the pipeline names listed below the graph to see the funds set aside for each pipeline. Some companies also use letters of credit or surety bonds to ensure there will be funds available to pay for abandonment activities when required.Footnote 1
Pipeline companies report related information to the CER each year, including amounts contributed to trusts and earnings on investments in these trusts. Official CER documents related to abandonment funding can be found here, sorted by year and by company, for every pipeline the CER regulates: abandonment funding documents [Folder 3300366].
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