On Wednesday, Aug. 28, the National Energy Board (NEB) became the Canada Energy Regulator (CER). For further information please visit our Implementing the Canadian Energy Regulator Act information page

Pipeline Abandonment

When a company who owns a pipeline wants to stop operating part or all of it, the company must inform the Commission. The company might apply to deactivate, decommission, or abandon the pipeline.

Process

When a company who owns a pipeline wants to stop operating part or all of it, the company must inform the Commission. The company might apply to deactivate, decommission, or abandon the pipeline.

When a company applies for approval to abandon a section of pipeline or an entire pipeline, it must include certain information in its application which is found in Guide B of the CER’s Filing Manual.

Under the Canadian Energy Regulator Act, the company must also provide notice to owners that the abandonment application has been filed:

  • CER Act s.241 (2) If a company has submitted to the Regulator an application to abandon a pipeline, the company must, in the form and manner specified by the Commission, (a) serve a notice on all owners of lands through which the pipeline passes, insofar as they can be ascertained; and (b) publish a notice in at least one issue of a publication, if any, in general circulation within the area in which the lands are situated.

The Commission expects companies to use the form of notice specified by the Commission:

Anyone may object to the abandonment or make a request to the Commission to hold a public hearing. A template statement of opposition or request for a hearing form is available here.

The Commission takes safety seriously and will take all available actions to protect Canadians and the environment. A company must demonstrate that it will abandon the pipeline in a way that protects the environment and the public and that the company will anticipate, prevent, manage and mitigate any potentially dangerous conditions associated with its pipeline.

If the CER allows abandonment of a pipeline or a section of it, it issues an Order that usually includes conditions that must be met before abandonment is complete. The CER verifies that conditions or other legal requirements are met through its review of submissions, site-inspections, and audits. If the pipeline is abandoned by removal, CER oversight ends after all conditions in the Order are satisfied. If a pipeline is abandoned in place, the CER continues to have oversight.

Financial Aspects of Abandonment

In May 2009, the Board issued the RH-2-2008 Reasons for Decision [Filing A21835], setting out the NEB’s guiding principles and an Action Plan to address the monetary costs of abandonment. Large NEB-regulated companies filed their first estimates of future abandonment costs which were considered by the Board in the (Abandonment Cost Estimates (ACE) MH-001-2012) hearing [Folder 782061]. The Board released its Decision on the reasonableness of these estimates and its directions to small companies [Filing A50478] on their estimates in February 2013.

The Board will continue to address the financial aspects of abandonment by considering companies’ plans to collect, store, manage, and access these funds. Companies’ plans will undergo regular reviews and revisions as more information becomes available.

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