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Public Comment Period - Operations and Maintenance Activities on NEB-Regulated Facilities: Requirements and Guidance Notes [PDF 322 KB]

File 3000-A000-25
11 April 2005

To: All Companies under the National Energy Board’s Jurisdiction REAC (Federal, provincial, and territorial government agencies)
Landowner Associations

Public Comment Period - “Operations and Maintenance Activities on NEB-Regulated Facilities: Requirements and Guidance Notes”

In December 2003, the National Energy Board launched a project to clarify the regulatory process Companies would be required to follow with respect to the operations and maintenance of Board-regulated facilities. The purpose of the project is to provide a clear and consistent approach to regulating operations and maintenance activities so that landowners, the public, regulated Companies, and the Board would have a common understanding of how operations and maintenance activities would be regulated in the future and which projects would require an application pursuant to section 58 of the NEB Act or would fall under the section 58 Streamlining Order.

The Board has solicited feedback from regulated Companies and from landowner associations across Canada on the draft requirements for operations and maintenance activities on pipelines and processing plants under the Board’s jurisdiction. Based on the feedback received, the Board has revised its requirements and guidance, which are captured in the attached documents. In addition, the Board has revised the Streamlining Order to support changes to the way operations and maintenance activities are regulated, which is also attached.

The Board is seeking public comment on both the draft document “Operations and Maintenance Activities on NEB-Regulated Facilities: Requirements and Guidance Notes” and on the draft Streamlining Order. The NEB has contacted you for your feedback based on your experience with NEB-regulated facilities.

If the proposed operations and maintenance requirements are implemented by the Board, the NEB will continue to assess typical operations and maintenance activities as part of the original application for approval of a pipeline or processing plant. Throughout the life of a facility, the NEB will exercise oversight of operations and maintenance activities using its existing inspection and audit programs. Since operations and maintenance activities will no longer be considered by the Board as section 58 applications after a pipeline or processing plant has been approved and constructed, they will no longer be NEB Act triggers under the Canadian Environmental Assessment Act (CEA Act) Law List Regulations. The Board notes that Companies will still be required to meet their obligations to federal, territorial and provincial agencies under other relevant pieces of legislation (e.g., Fisheries Act, Mackenzie Valley Resource Management Act). This expectation is outlined in the guidance notes of the attached draft document.

The Board will consider all of the comments received from the public and revise the operations and maintenance requirements and guidance notes, and the section 58 Streamlining Order where appropriate. At this time, parties should be aware that the draft requirements for operations and maintenance activities and the draft Streamlining Order have not yet been implemented. When these new requirements and the draft Streamlining Order are approved by the Board, details of implementation will be clearly communicated to all parties with an information package. The information package will include specific information about how to provide notification for operations and maintenance activities, who to contact within the Board for further information, and an outline of other regulatory changes that will be necessary to support this approach. Other regulatory changes that may be necessary resulting from these new requirements for operations and maintenance activities include amending the Onshore Pipeline Regulations, amending the Processing Plant Regulations, and rescinding the guidance on “Investigative Digs and Related Pipeline Repairs and Replacements”. The implementation process will be discussed in greater detail at the NEB Workshop, 6-8 June 2005 and full implementation of the regulatory change could take place in early summer 2005.

Please send comments to the Board before 16 May 2005, clearly indicating they are related to “Operations and Maintenance on NEB-Regulated Pipelines” to:

Mr. Michel L. Mantha, Secretary
National Energy Board
444 Seventh Avenue SW
Calgary, Alberta  T2P 0X8
Facsimile: 403-292-5503
Email: secretary@neb-one.gc.ca

If you know of another party that would be interested in this project, please pass this information package on to them, or ask them to contact the NEB for a copy. This information is also available on the NEB website (www.neb-one.gc.ca) under “Operations and Maintenance Activities”.

If you have any questions regarding this project, please contact the NEB using the toll-free number 1-800-899-1265.

Yours truly,

Michel L. Mantha
Secretary

Attachment


ATTACHMENT A

Operations and Maintenance Activities
on National Energy Board Regulated Pipelines:
Requirements and Guidance Notes
(“Operations and Maintenance Requirements”)
- Draft for Discussion -
11 April 2005

Table of Contents

  • 1.0 Goal
  • 2.0 Background
    • 2.1. Background to the Project
    • 2.2. Background to the Requirements
  • 3.0 Definitions
  • 4.0 Requirements
    • 4.1. Notification to the National Energy Board
    • 4.2. Unplanned Operations and Maintenance Activities
    • 4.3. Landowner and Public Notification and Consultation
    • 4.4. Record Maintenance
    • 4.5. Other Regulatory Obligations
  • 5.0 Other Issues
    • 5.1. Toll Considerations & Commercial Third Parties
  • 6.0 Contacting the NEB
  • Figure 1 - NEB-Regulated Facility Filings
  • Section 58 Streamlining Order [Folder 255376]

1.0 Goal

The goal of these requirements and guidance notes (“Operations and Maintenance Requirements”) is to provide stakeholders with greater clarity about how operations and maintenance activities on pipelines[1] (including processing plants) under the National Energy Board’s (NEB or the Board) jurisdiction will be regulated, while promoting safety, security, environmental protection, economic efficiency, and respect for the rights of those affected.

[1] "Pipeline" is defined in the NEB Act as "a line that is used or to be used for the transmission of oil, gas, alone or with other commodity... and includes all branches, extensions, tanks, reservoirs, storage facilities, pumps, racks, compressors, loading facilities, interstation systems of communication by telephone, telegraph or radio and real and personal property, or immovable and movable, and works connected to them, but does not include a sewer or water pipeline that is used or proposed to be used solely for municipal purposes."

2.0 Background

2.1. Background to the Project

In response to questions raised by Companies regarding clarification of which operations and maintenance activities require an application under section 58 of the National Energy Board Act (NEB Act) and which activities fall under the section 58 Streamlining Order, the Board announced at its December 2003 Workshop that it would initiate a project to assess current applications under section 58, to update the section 58 Streamlining Order, and to identify requirements for operations and maintenance activities on NEB-regulated pipelines. These requirements and guidance notes are the result of the NEB’s activities to improve the clarity of its expectations for pipeline operations and maintenance activities.

Typical operations and maintenance activities are evaluated by the NEB as part of the original application for the construction and operation of a pipeline; therefore, Companies will not be required to apply for approval to undertake operations and maintenance activities. However, the NEB will continue to regulate operations and maintenance activities and to fulfill its mandate through increased reliance on its inspection and audit programs.

2.2. Background to the Requirements

The requirements for operations and maintenance activities contained in this document apply to all NEB-regulated pipelines that occur on lands where there is an agreement in place between the Company and the landowners that covers the construction, operation and maintenance of a pipeline, including:

  • company owned land;
  • land rights held under easement, leased, or licensed land; and
  • temporary workspace.

For information on expectations for relations with landowners and the public throughout all phases of a pipeline, please review the requirements outlined in section 4.3.

3.0 Definitions

Operations and maintenance activities include:

  1. All activities necessary to safely operate an existing pipeline; and
  2. Maintenance activities, upgrades, repairs, or replacements to an existing pipeline or part of a pipeline that do not increase the approved maximum operating pressure (MOP) or diameter of the pipeline.

Operations and maintenance activities do not require an application to the Board under the NEB Act; however Companies will be required to notify the Board prior to undertaking some operations and maintenance activities. (See Figure 1 and section 4.1).

Guidance Notes:

Typical operations and maintenance activities are considered in the original application for approval to construct and operate a pipeline or processing plant. The Board expects that operations and maintenance activities will be undertaken to keep the pipeline working in a safe and environmentally-sound manner provided these activities do not change the approved maximum operating pressure (MOP) or diameter of the pipeline.

In general, “upgrades” do not include additions of components to a pipeline or processing facility that were not specifically contemplated in the original Certificate or Order. However, the definition of upgrade would include the addition of cathodic protection systems, as these are typically contemplated during the assessment of the original pipeline.

Upgrades also include improvements in technology. For example, if a Company were proposing to install solar panels as a power source in place of an existing source of fuel oil, the proposed installation would be considered an upgrade or a replacement, since the function of the installation would not change from what was originally approved.

Upgrades do not include additions of new connections, including a tie-in or installation of a “T”, and associated piping and metering facilities for the purposes of sale or receipt of gas. These installations still require an exemption Order under section 58 of the NEB Act and are captured on the revised Streamlining Order. Metering or regulating facilities installed for the purposes of measurement or monitoring would be considered operations and maintenance.

Operations and maintenance activities do not include:

  1. Upgrades that result in increases to the MOP, the diameter of the pipeline, and/or permanent increases in airborne emissions or noise levels, above previously approved levels[2];
  2. “Looping” (i.e., adding pipe parallel or adjacent to, and interconnected with, an existing pipeline for the general purpose of increasing capacity);
  3. Construction of a new pipeline; and
  4. Deactivation (for longer than 12 months), reactivation (where a pipeline has been deactivated for more than 12 months), decommissioning, or abandonment.

[2] Does not include temporary increases in air emissions and noise emissions during construction.

These activities require an application under the NEB Act, the Onshore Pipeline Regulations (OPR) or the Processing Plant Regulations (PPR). (See Figure 1).

Guidance Notes:

See Figure 1 to identify the appropriate application process for the activities that would not be considered operations and maintenance. Most of these activities would require an approval under section 52 of the NEB Act or an exemption under section 58; however some may require an approval process under the OPR or PPR, or other sections of the NEB Act.

4.0 Requirements

4.1. Notification to the National Energy Board

Goal:

The NEB requires sufficient information to make a decision to inspect operations and maintenance activities that could result in high consequences to landowners, the public or the environment.

Requirements:

Companies are not required to submit an application for, or give the Board advance notice of most activities that fit the definition of operations and maintenance. However, in the following circumstances, the Board requires Companies to provide notification to the Board of operations and maintenance activities at least 10 working days[3] prior to starting work:

  • activities that result in ground disturbance, removing the pipe coating or cutting into the pressure envelope of the pipe in a Class 2, Class 3 or Class 4 Canadian Standards Association (CSA Z662-03) location
  • pressure testing other than hydrostatic[4];
  • welding on an in-service pipeline that is owned and operated by a Company that has not previously undertaken in-service welding as defined under CSA Z662-03;
  • activity resulting in ground disturbance that exposes the pipe in or within 30 m of a wetland or the banks of a water body[5];
  • pipe replacements that are individually or cumulatively greater than 100 m in length; and
  • in-service welding on high vapour pressure (HVP) pipelines.

[3] “working days” do not include Saturdays, Sundays, or statutory holidays.
[4] Per sections 7 and 23 of the OPR, the Board may require a Company to submit the details of its pressure testing program prior to starting pressure testing.
[5] Means a river, a lake, a creek, a stream, a canal, a reservoir, an ocean, up to the high-water mark, but does not include a sewage or waste treatment lagoon or a mine tailings pond.

For these activities, Companies are required to submit the following information when notifying the NEB:

  • a bridf description of the planned activity or project;
  • a rationale for the activity or project;
  • the general location of the activity (e.g., latitude and longitude, legal land description, kilometer post);
  • general timing and duration of the activity (i.e., the month or quarter);
  • reference to relevant section(s) of its Operations and Maintenance Manual; and
  • a contact person with whom NEB staff could follow-up.

Guidance Notes:

Activities on the notification list could result in high consequences to landowners, the public, the environment, or to pipeline integrity/safety; therefore, the NEB requires sufficient information to make a decision to inspect these activities. The NEB will rely on the Company’s procedures outlined in its Operations and Maintenance Manual, its Landowner and Public Notification and Consultation Program, and/or its Environmental Protection Program, for example, to ensure operations and maintenance activities are carried out appropriately.

If Companies are undertaking a program involving multiple activities on the notification list, they should notify the NEB at least 10 working days prior to undertaking the program.

The information required for notification to the NEB should be concise, but it should provide the NEB with sufficient detail to determine whether an inspection is warranted. If necessary, the NEB will follow-up with the Company for further information and/or to schedule an inspection.

Details of how Companies are to provide notification to the NEB will be provided once the regulatory changes are final and will be in the form of a detailed information package.

4.2. Unplanned Operations and Maintenance Activities

Goal:

Companies will undertake operations and maintenance activities that are required to safely operate a pipeline and to protect the environment.

Requirement:

For operations and maintenance activities that are unplanned (i.e., the Company is not aware these activities are necessary 10 working days prior to starting work), but which would normally require advance notification (see list of activities requiring notification in section 4.1), Companies are required to notify the Board as soon as they determine the activity must be carried out. The Board will then decide whether to carry out an inspection or follow-up audit of the activity.

Unplanned activities are not incidents. Companies are still required to meet the various incident reporting requirements in addition to any requirements set out in this document.

Guidance Notes:

Companies need to ensure they have fulfilled their reporting requirements for incidents within the OPR, PPR, the National Energy Board Pipeline Crossing Regulations, the Transportation Safety Board Act, and the Canada Labour Code, and under other relevant legislation.

4.3. Landowner and Public Notification and Consultation

Goal:

Companies will carry out appropriate consultation and notification activities with landowners and the public throughout the life of a pipeline.

Requirements:

The Board expects Companies to develop, implement and maintain a program for landowner and public notification and consultation activities. All activities will be documented, and documentation will be maintained by the Company for NEB audit purposes.

At a minimum, Companies will notify landowners and the public of operations and maintenance activities that could affect them. Where new lands are required to carry out operations and maintenance activities Companies must fulfill the requirements of sections 86 and 87 of the NEB Act.

Guidance Notes:

The OPR and the PPR will be amended to include a requirement for Companies to develop, implement and maintain a program for life-of-the-pipeline landowner and public notification and consultation activities, and document retention. Currently, section 3-2, Chapter 3 of the NEB’s Filing Manual provides some additional guidance regarding the NEB’s expectations about consultation activities. In general, affected landowners and/or the public would include those parties that could see, hear, or smell the operations and maintenance activity planned by the Company.

4.4. Record Maintenance

Goal:

Companies will maintain documentation for operations and maintenance activities.

Requirement:

Companies are required to keep a record of all operations and maintenance activities undertaken in accordance with CSA Z662-03.

Guidance Notes:

The OPR and PPR will be amended to clarify the National Energy Board’s records maintenance requirements. Companies are expected to keep a record of all planned and unplanned operations and maintenance activities that are carried out. Companies are also expected to maintain documentation of the operations and maintenance activities for which notification to the Board is required. The information listed for notification purposes in section 4.1 is the minimum required for documentation.

4.5. Other Regulatory Obligations

Goal:

Companies are aware they may have other regulatory obligations for operations and maintenance activities.

Requirements:

Depending on the type and/or location of the operations and maintenance activity, Companies may have regulatory obligations to other federal, territorial or provincial agencies or under other parts of the NEB Act, the OPR, PPR or other regulations pursuant to the NEB Act. Figure 1 provides additional guidance for other facility filings to the NEB.

Guidance Notes:

Since operations and maintenance activities on NEB-regulated facilities do not require a section 58 exemption or section 52 Certificate under the NEB Act, these activities will not trigger a screening under the Canadian Environmental Assessment Act (CEA Act). However, Companies may require approvals, permits or authorizations under other legislation, such as the federal Fisheries Act, that may also trigger the CEA Act. The National Energy Board recommends that Companies check with regional offices for federal, territorial and provincial agencies to ensure they are meeting all of their regulatory obligations.

In addition, certain activities may require an application or notification under other parts of the NEB Act, the OPR, the PPR, or other regulations pursuant to the NEB Act. For example, a deviation of the original right-of-way requires an application under section 45 of the NEB Act.

5.0 Other Issues

5.1. Toll Considerations & Commercial Third Parties

Goal:

Companies are aware that a decision pursuant to section 52 or section 58 of the NEB Act does not constitute an approval of the costs associated with operations and maintenance activities for inclusion in the cost of service and/or rate base.

Requirements:

None.

Guidance Notes:

Since operations and maintenance activities do not require an application under section 58 or section 52 of the NEB Act, Companies may wish to consider other methods to communicate certain capital additions to shippers.

6.0 Contacting the NEB

Where a project or activity does not appear to be addressed by this framework, Companies are expected to contact the NEB for clarification, prior to undertaking the activity:

NEB Toll-free Number:
1-800-899-1265

Figure 1: NEB-Regulated Facilities Filings

Section 58 Streamlining Order [Folder 255376]

Date modified: