Pipeline Abandonment

The term abandonment applies to a situation when a pipeline operator decides to permanently stop operating the pipeline. Currently in Canada, very few pipelines are abandoned, and we do not anticipate terminating operation of our pipeline systems in the foreseeable future. However, as the owners of significant infrastructure, we need to plan for our pipeline’s end of practical life. We aim to ensure that our pipelines are abandoned in a safe, environmentally sound and economically feasible manner.

As required by the National Energy Board (NEB) and in conjunction with the Land Matters Consulting Initiative (LMCI), Kinder Morgan Canada developed a five-year action plan to reach a NEB 2015 milestone requiring pipeline operators to begin setting aside funds designated for future pipeline abandonment. The goal of the initiative is to address all aspects of abandonment: approaches, costs and expected timing, and to ensure that abandonment will not be a cost borne by landowners. The collection and set-aside of funds for pipeline abandonment began January 1, 2015 by adding a surcharge to the tolls paid by shippers transporting petroleum.

Since 2011, we have been communicating information about pipeline abandonment and LMCI to landowners, occupants and land managers along our pipeline systems (see the list of landowner communications regarding pipeline abandonment below)

For more information about pipeline abandonment, please visit the NEB website https://www.neb-one.gc.ca/prtcptn/pplnbndnmnt-eng.htm

We look to landowners, occupants and land managers to help develop an approach that serves the interests of the public while having minimal impact on the environment. Your input will have an effect on our abandonment plan.

Please contact us at 1.866.268.3001 or landowners@kindermorgan.com if you have any questions, comments or suggestions about pipeline abandonment.

Trans Mountain collects a Pipeline Reclamation Surcharge from its Shippers and contributes the collections to the Trans Mountain Pipeline Reclamation Trust where they are held for future abandonment activities.

The current Trans Mountain Tariff that contains Reclamation Surcharge information can be found on the Tolls and Tariffs webpage.

Pipeline Reclamation Trust Information:

Trans Mountain Pipeline Reclamation Trust Fund - financial statements (2017)

Trans Mountain Pipeline Reclamation Trust Fund - financial statements (2016)

Trans Mountain Pipeline Reclamation Trust Fund - financial statements (2015)

Trans Mountain Pipeline Reclamation Trust Agreement

The Statement of Investment Policy and Procedures

What is pipeline abandonment? When a pipeline is no longer useful, a company may apply to abandon it. Once a pipeline is abandoned, it cannot be used to carry oil and gas products or any commodity again. In some cases, pipelines may be deactivated or taken out of service for periods of time before they are abandoned.

What is the NEB process for abandonment? When a company who owns a pipeline wants to stop operating part or all of it, the company must inform the NEB. The company might apply to deactivate, decommission, or abandon the pipeline. The NEB may hold a public hearing (written or oral) to consider the application. Information on the hearing process can be found in the National Energy Board Hearing Process Handbook.

What happens to the pipeline after it has been abandoned? Abandoned pipelines can be removed completely or partially or they can be abandoned in place, meaning that the pipeline is left in the ground. The choice between removing or abandoning in place depends on the current and future uses of the land and the impacts each option will have on the surrounding environment.

Who is responsible for the cost of abandonment? Pipeline companies are responsible for the full costs of constructing, operating and abandoning their pipelines.

Some pipelines are between 40 and 60 years old; why are they not abandoned? With ongoing maintenance, the application of the latest technology and sound operating practices, pipelines can have an indefinite lifespan.

Does the landowner have a say in the decision? Yes. When we propose to abandon a pipeline, we will work with landowners to review specific land use and the appropriate abandonment method for the lands.

What if the trust does not have enough money set aside to complete abandonment as well as clean up and restoration? The pipeline companies are ultimately responsible for pipeline abandonment regardless of the amount of money collected through the set-aside and collection mechanisms described above. We are responsible for initial abandonment activities as well as post-abandonment monitoring and remediation.

Once the pipeline is abandoned, does the liability fall back onto the landowner? No. The liability remains with the pipeline company. The NEB and the pipeline companies are committed to developing the requirements and processes to ensure that funds are available for future pipeline abandonment activities. This is a long-term commitment with funds for abandonment to be collected from users of the pipeline over time.