On June 19, 2016, the amendments under the Pipeline Safety Act (the “Act”), which amend the damage prevention provisions in the National Energy Board Act and the Canadian Oil and Gas Operations Act, came into force. These amendments set out the specific obligations of individuals and pipeline companies with respect to preventing pipeline damage. Under the recent amendments, pipeline companies must ensure that individuals know how to safely conduct activities such as excavation and construction near pipelines, and individuals planning to conduct activities near pipelines must report plans to a one-call centre before beginning the activities. The amendments pertain to absolute liability and financial resource requirements, abandonment, pipeline releases, damage prevention, as well as audit and enforcement powers. Some of the most noteworthy changes resulting from the amendments include:
- Pipeline companies with the capacity to transport at least 250,000 barrels per day of oil will be liable for all costs and damages for an unintended release, up to $1 billion, regardless of fault. The limits of absolute liability for the remaining pipeline companies under the jurisdiction of the National Energy Board (“NEB”) will be set by regulation.
- The jurisdiction of the NEB has expanded to include oversight of pipelines post-abandonment; however, companies remain liable for post-abandonment costs and damages. The NEB is also granted new powers for inspection officers, and authority to assume control of an abandonment or abandoned pipeline if a company is not complying with an NEB order.
- In the event of a pipeline release, the Governor in Council has been provided the authority to “designate” a company if it either does not have the ability to pay for the release or does not comply with a Board order, and for the NEB to take over spill response.
Along with the amendments to the Act, the following regulations have also come into force:
- National Energy Board Pipeline Damage Prevention Regulations – Authorizations (SOR/2016-124) – these regulations replace the National Energy Board Pipeline Crossing Regulations, Part I, (SOR/88-528)
- National Energy Board Pipeline Damage Prevention Regulations – Obligations of Pipeline Companies (SOR/2016-133) – these regulations replace the National Energy Board Pipeline Crossing Regulations, Part II (SOR/88-529)
- Regulations Amending the National Energy Board Onshore Pipeline Regulations (SOR/2016-134)
- Regulations Amending Administrative Monetary Penalties Regulations (National Energy Board) (SOR/2016-135)
These regulations set out the obligations of pipeline companies and individuals planning construction, ground disturbance activities or crossings in the vicinity of an NEB-regulated pipeline. Under the new regulations:
- Pipeline companies operating a pipeline within a geographical area where a one-call centre exists are required to become members of that centre.
- Individuals are required to contact a one-call centre before engaging in an activity that would cause ground disturbance in the vicinity of a pipeline.
- Pipeline companies are required to have a damage prevention program in place within their management systems. Under a damage prevention program, a pipeline company is required to maintain an ongoing public awareness program, monitor land use and land ownership changes near a pipeline, and have standards and processes for managing activity requests and locates.
- Individuals and pipeline companies planning to conduct ground disturbance activities within the prescribed area, defined as a strip of land measured 30 metres perpendicularly on each side from the centreline of a pipe, must meet the requirements outlined in the regulations.
In effect, these legislative changes mark an increase in responsibility and liability on the part of pipeline companies and individuals conducting activities near pipelines. As such, individuals and pipeline companies should be mindful of these recent amendments and take care to comply with the obligations set out in the Act and accompanying regulations when undertaking activities in proximity to NEB-regulated pipelines.