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 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 (CER Act), the company must 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 of the Canada Energy Regulator expects companies to use the form of notice specified by the Commission [Notice of Proposed Abandonment: English, WORD 719 KB]; [Notice of Proposed Abandonment: French, WORD 720 KB].

When publishing notices, consider the availability of English and French newspapers and their respective regional coverage. In the event that newspapers in the region are published in only one official language, publish both the French and English versions side by side in compliance with the Official Languages Act.

The Commission expects companies to serve notice that an abandonment application has been filed on potentially impacted Indigenous peoples. Companies must also provide to Indigenous peoples the letter from the CER’s Chief Executive Officer outlining the CER’s approach to Crown consultation for which the CER, through its Commission, is the final decision-maker. The company must file with the CER, at the earliest practical date, a letter indicating the date when the Notice of proposed abandonment has been served on each person or group and the publication date(s).

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 Commission 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 Commission verifies that conditions or other legal requirements are met through its review of submissions, site-inspections, and audits.

Financial Aspects of Abandonment

In May 2009, the National Energy Board (NEB) 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 NEB in the (Abandonment Cost Estimates (ACE) MH-001-2012) hearing [Folder 782061]. The NEB released its Decision on the reasonableness of these estimates and its directions to small companies [Filing A50478] on their estimates in February 2013.

Since that time, the NEB and CER have conducted reviews on a five-year cycle, to update and refine abandonment cost estimates and the funding for these costs. In June 2023, the Commission of the Canada Energy Regulator released a Report setting out a new GIS-based ACE Calculation Method  [Filing A50478].

Abandonment Funding Documents

As part of the CER’s regulation of pipeline abandonment funding, all CER-regulated pipeline companies have certain requirements. The appendices of regulatory decisions and reports have introduced certain model documents, reporting forms, and tables for companies to use, and these are updated occasionally as required.

Links to the latest updated versions of most of these appendices are provided below.Footnote 1 These relate to matters such as annual company reporting for their set-aside mechanism, the calculation of a company’s annual contribution amount, the information required in abandonment funding plans, and the reporting of actual abandonment costs.

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