ARCHIVED - NEB Releases Decision on Abandonment Funding Set-Aside and Collection Mechanism

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For immediate release
29 May 2014

NEB Releases Decision on Abandonment Funding Set-Aside and Collection Mechanism

CALGARY - The National Energy Board (NEB or the Board) today announced its decision on NEB-regulated pipeline companies’ set-aside and collection mechanism applications (MH-001-2013). The purpose of these mechanisms is to provide money to pay for pipeline abandonment.

By 1 January 2015, NEB-regulated pipeline companies must have a set-aside mechanism in place to begin accumulating funds to pay for pipeline abandonment. Most pipeline companies must establish a trust or provide a letter of credit issued by a Schedule 1 bank or a surety bond supplied by a surety company regulated under the Trust and Loan Companies Act. The Board will require almost all pipeline companies to provide their trust agreement, surety bond or letter of credit for approval.

The Board will regularly review companies’ estimates of abandonment costs, the coverage provided by their set-aside mechanisms, and the assumptions about how those funds will grow. To allow for greater transparency and to facilitate consultation, the Board expects pipeline companies to consider specific tools to communicate information about abandonment funding. Additionally, the amount of abandonment funds being set aside must be included in annual reports filed with the Board.

In 2009, as a part of the RH-2-2008 Reasons for Decision, the NEB directed all pipeline companies to begin setting aside abandonment funds. That decision set out guiding principles and considerations, and a list of attributes for any mechanism that would be used to set aside funds for pipeline abandonment. It also established a five-year Action Plan for companies to follow.

The Board’s decision on set-aside and collection mechanisms for pipeline abandonment cost funding is the tenth and final step of the Action Plan.

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. For more information on the NEB and its mandate, please visit

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For further information:

Stacey Squires
Communications Officer

National Energy Board
Telephone: 403-299-2717
Telephone (toll free): 1-800-899-1265
Facsimile: 403-292-5503
Facsimile (toll free): 1-877-288-8803
TTY (Teletype): 1-800-632-1663

Related documents:

For a copy of the Reasons for Decision:

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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