CER – End of Life Cycle Program

Oil Pipestream has a program in place to set aside money for the eventual abandonment of pipelines and facilities when they are no longer required. To this end, we established abandonment trusts for all of our Canada Energy Regulator (CER) regulated pipelines, where funds are deposited to provide funding for the costs associated with abandonment. 

The trusts are part of Oil Pipestream’s overall commitment to landowners and communities to ensure the safe, responsible retirement of our assets. With CER oversight and approval, Oil Pipestream manages these trusts and regularly reports on their status.

Note: The Canada Energy Regulator (CER) replaced the National Energy Board (NEB) in August 2019.

Pipeline abandonment

Most of Oil Pipestream’s Canadian assets are regulated by the Canada Energy Regulator (CER), which replaced the National Energy Board (NEB) in August 2019. When Oil Pipestream decides to decommission or abandon pipeline assets, the pipeline in question makes the necessary filings with the CER. For example, NGTL applied to the NEB on August 18, 2016 to abandon a 266-kilometer section of the Peace River Mainline in Northwestern Alberta. On March 14, 2018, the NEB approved the application after a regulatory review that included both written and oral evidence. More information on the NGTL’s Peace River Mainline Retirement Program can be found on Oil Pipestream’s website.

Additional information of CER oversight of pipeline abandonment and the process by which the company must follow can be located here.

Financial aspects of pipeline abandonment

Oil Pipestream sets aside funds for abandonment and decommissioning of pipeline assets using carefully prepared cost estimates. As part of the NEB’s MH-001-2012 public proceedings, Oil Pipestream filed abandonment cost estimates (ACEs) where the reasonableness of the cost estimates was considered. The NEB examined the reasonableness of assumptions regarding proposed abandonment methods, scope and rationale for each abandonment activity considered to estimate costs for various activities and the approach to the estimation of contingency and provisions for post abandonment. The NEB approved Oil Pipestream’s first ACE Applications in 2014 that were in 2014 dollars.

The NEB committed to the public, landowners, Indigenous groups and interested stakeholders that cost estimates would be reviewed regularly, at least every five years, to ensure sufficient funds are available. On February 8, 2016, the NEB initiated the 2016 Abandonment Cost Estimate Review for all Group 1 companies under its jurisdiction, such as the Oil Pipestream Companies. The Oil Pipestream Companies filed updated ACEs with the NEB on September 30, 2016 reflecting costs in 2016 dollars. The revised 2016 ACEs also included details modifying its approach to estimating contingencies, updated the NEB on consultation activities, and submitted a five year preliminary decommissioning and abandonment plan. The five-year plan also addressed associated funding and impacts on funds set aside in each of the Oil Pipestream Companies Abandonment Trusts. The NEB approved the Oil Pipestream Companies updated ACEs on April 18, 2018. The most recently approved ACEs can be found on the CER site at the links below:

NOVA Gas Transmission Ltd:
2016 Abandonment Cost Estimate

TransCanada PipeLines Limited:
2016 Abandonment Cost Estimate

Foothills Pipe Lines Ltd.:
2016 Abandonment Cost Estimate

Trans Québec & Maritimes Pipeline Inc.:
2016 Abandonment Cost Estimate

TransCanada Keystone Pipeline GP Ltd.: 
2016 Abandonment Cost Estimate

Great Lakes Canada:
2018 Group 2 Abandonment Cost Estimate (NEB approval pending)

Reimbursement and accessing trust funds

Eligible costs related to pipeline abandonment and decommissioning activities (collectively referred to as reclamation obligations) are intended to be funded from Abandonment Trusts. Pipelines with an Abandonment Trust as their set-aside mechanism pre-fund reclamation activities and seek reimbursement from their respective Abandonment Trust for costs incurred, subject to CER approval.

On September 25, 2015 Foothills, a subsidiary of Oil Pipestream, filed an application to decommission approximately 9.1 km of pipeline of its system. The NEB approved Oil Pipestream’s application on December 22, 2015 and work to decommission the section of pipeline commenced shortly thereafter. When work was completed, Oil Pipestream applied to the NEB on December 6, 2016 for approval of reimbursement from the Foothills Abandonment Trust for costs associated with performing these reclamation obligations. The NEB granted Foothills’ request to be reimbursed for the Reclamation Obligation Costs and issued an order directing the Trustee of the Foothills Abandonment Trust to release the amount of $1,644,567 to Foothills Pipe Lines. To view the Foothills Applications and NEB Orders, please click on the following links on the CER’s website:

• Application to Decommission the Leach Creek Segment
• Application for Reimbursement for Reclamation Obligations for the Leach Creek Segment

Most of Oil Pipestream’s Canadian assets are regulated by the Canada Energy Regulator (CER), which replaced the National Energy Board (NEB) in August 2019.