On September 13, 2011 the Energy Resources and Conservation Board (“ERCB” or “Board”) released decision 2011 ABERCB 029, The City of Calgary Application Pursuant to Section 33 of the Pipeline Act for the Relocation of a Pipeline. The decision is noteworthy, as it is one of the few reported decisions of the Board which has considered the Board’s powers under section 33 of the Pipeline Act. Section 33 of the Pipeline Act allows the Board to order the relocation of a pipeline in the public interest and grants the Board the power to determine who should bear the costs of relocation.

As a result of a breakdown in negotiations between the City and the pipeline operator, Alberta Products Pipeline Ltd. (“APPL”), the City applied to the ERCB pursuant to section 33 of the Pipeline Act for an order requiring APPL to relocate a portion of its product pipeline (in the vicinity of 52nd Street SE and 90th and 98th Avenue) in order to accommodate the widening and upgrading of 52nd Street from two lanes to six lanes. The City requested that the Board consider its application in two stages. In the first stage the Board would consider and render a decision on whether relocation of the pipeline is in the public interest. In the second stage, if necessary, the Board would consider the cost allocation of the relocation.

APPL objected to the relocation on the basis that the City had developed a modified four lane configuration as an interim measure in order to meet deadlines imposed by its funding agreement with the Federal Government that would avoid its pipeline in the area (the “Modified Configuration”). APPL submitted that the Modified Configuration called into question the City’s need to build out to six lanes and thus to relocate the pipeline. APPL also objected to the two stage process proposed by the City to deal with the application.

The Board agreed with the two stage process proposed by the City and a public hearing was held in Calgary, Alberta on September 7, 2011. After opening the hearing, the Board was informed that an agreement, subject to formalization, had been reached between the parties, the terms of which would be kept confidential. As a result, APPL withdrew its objection to the City’s application and consented to the Board issuing order that the pipeline be relocated. Notwithstanding that an agreement was reached by the parties the Board made several important findings in its brief written decision, namely;

That the City’s request to have the pipeline relocated was made in furtherance of its legislative objective to develop effective transportation systems;

That the two stage process proposed by the City, whereby the public interest consideration of whether the pipeline should be relocated was separated from the issue of who should pay for the relocation, was appropriate in the circumstances;  

The Board recognized that both parties had concerns with the safe operation of the pipeline in its current location under the proposed six lane roadway which favored relocation;

That APPL would be required to file an application in accordance with Directive 56 to have the pipeline relocated, notwithstanding the order to relocate; and  

That the agreed upon relocation design would use City Right of Way (“ROW”) which would minimize impacts to adjacent landowners.

In rendering its decision, the Board concluded that in consideration of the record before it and noting APPL’s support for the relocation ordered that the Pipeline be relocated in the public interest, in accordance with the terms of the agreement reached between the parties.