ARCHIVED - NEB Approves the Abandonment Cost Estimates for Large Pipeline Companies

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For immediate release
14 February  2013

NEB Approves the Abandonment Cost Estimates for Large Pipeline Companies

CALGARY - The National Energy Board (NEB or Board) has issued its Reasons for Decision for the abandonment cost estimates of 12 of the 13 large pipeline companies regulated by the NEB.

The Board approved the cost estimates as filed subject to numerous directions specific to each company. For example, the Board directed companies to account for the removal of 20 per cent of medium and large diameter pipe located on lands in the categories of “agricultural, cultivated” and “agricultural, non-cultivated” for the purpose of estimating their abandonment costs. The Board also directed companies to adjust their cost estimates to account for monitoring and remediation for as long as the pipelines are in the ground. For all the directions made by the Board for this matter, see the Reasons for Decision.

As stated in a previous decision, the Board said that landowners will not be liable for the costs of pipeline abandonment. Any costs associated with the abandonment of a pipeline are the responsibility of the pipeline company.

As the next step, the companies are required to re-file abandonment cost estimates based on the Board’s decision by 16 April 2013.

An oral public hearing to consider the cost estimates of the large pipeline companies was held in Calgary from 30 October - 8 November 2012. During the hearing the Board considered the reasonableness of each company’s cost estimates including:

  • the assumptions for proposed abandonment methods;
  • the scope and rationale for each abandonment activity; and
  • the approach used to estimate contingency and provisions for post-abandonment.

This decision applies to the 12 large companies that submitted pipeline-specific abandonment cost estimates to the NEB in November 2011. One large company, Maritimes & Northeast Pipeline Management Ltd., was not a part of this process because it followed the NEB’s previously released base case for abandonment cost estimates and therefore did not require Board approval.

All NEB-regulated pipeline companies are to begin setting aside funds for future abandonment by 2015. This decision represents one step in an on-going process by the NEB to make sure that adequate funds are in place for abandonment. The NEB will review all companies’ abandonment cost estimates on a regular basis, at least every five years.

The National Energy Board is an independent federal regulator of several parts of Canada's energy industry with the safety of Canadians and protection of the environment as its top priority. Its purpose is to regulate pipelines, energy development and trade in the Canadian public interest.

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For further information:

Kristen  Higgins
Communications Officer

National Energy Board
Telephone: 403-292-4800
Telephone (toll free): 1-800-899-1265

Related documents:

For a printed copy of the Reasons for Decision MH-001-2012:

National Energy Board Library
Suite 210, 517 Tenth Avenue SW
Calgary, Alberta
T2R 0A8
Telephone: 403-299-3561
Telephone (toll free): 1-800-899-1265
Facsimile: 403-292-5503
Facsimile (toll free): 1-877-288-8803
TTY (teletype): 1-800-632-1663

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