TC Energy TC Energy 450 – 1 Street SW 450 – 1 Street SW Calgary, AB T2P 5H1 Calgary, AB T2P 5H1 Email: Nicole [email protected] Email: Brock [email protected]
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LETTER DECISION File OF-Fac-Gas-N081-2018-16 01 20 December 2019 Ms. Nicole Prince Mr. Brock Gent Regulatory Analyst Legal Council Regulatory, Canadian Gas Pipelines Regulatory, Canadian Gas Pipelines TC Energy TC Energy 450 – 1 Street SW 450 – 1 Street SW Calgary, AB T2P 5H1 Calgary, AB T2P 5H1 Email: [email protected] Email: [email protected] Dear Ms. Prince and Mr. Thrasher: Abandonment Hearing MHW-003-2019 Nova Gas Transmission Limited (NGTL) 2018 Meter Stations and Laterals Abandonment Program The Commission of the Canada Energy Regulator (Commission) has considered the above-referenced application filed with the National Energy Board (NEB) on 28 September 2018 (Application). The Commission grants NGTL leave to abandon the facilities. On 28 August 2019, the Canadian Energy Regulator Act (CER Act) came into force. Pursuant to section 36 of the transition provisions associated with the CER Act, the Application shall be considered by the Commission in accordance with the National Energy Board Act (NEB Act). The Application describes activities related to the abandonment of 15 meter stations and 22 associated lateral pipelines, one stand-alone meter station and four stand-alone laterals (2018 Program or Facilities). Pursuant to paragraph 74(1)(d) of the National Energy Board Act (NEB Act) and taking into account section 50 of the National Energy Board Onshore Pipeline Regulations (NEB OPR), the Commission has issued the attached Order ZO-008- 2019 (Order), the effect of which is to grant NGTL leave to abandon the Facilities in its 2018 Program. The attached Order sets out the conditions the Commission has imposed on the 2018 Program. The Commission’s reasons for its decision to issue the Order are set out in this Letter Decision. In reaching its decision, the Commission considered all of the evidence on the record related to this matter. The regulatory documents on file for the MHW-002-2019 proceeding are available in the 2018 Program File on the Commission’s website. Letter Decision Page 1 of 11 1.0 2018 Program Overview and the Process 1.1 Application and 2018 Program Overview On 28 September 2018, NGTL filed their Application for leave to abandon the Facilities with a total estimated cost of $18.1 million. NGTL submitted information about land, engineering, environment and socio-economic matters with its Application and in its 7 January 2019 and 10 May 2019 responses to the NEB’s Information Requests (IRs) No.1 and IR No. 2. The 2018 Program is located throughout Alberta on freehold lands, lands owned by municipalities, Special Areas lands, Alberta Crown (Alberta Environment and Parks [AEP], and Alberta Tourism, Parks & Recreation) lands, Federal Crown (Canadian Forces Base [CFB] Suffield) lands, and on lands located on the Saddle Lake Cree Indian Reserve No. 125. NGTL stated that at each site the scope of its 2018 Program is relatively small in scale and short in duration with physical abandonment activities at each location lasting 14 to 28 days. Eleven facilities will be abandoned by removal including approximately 15 km of lateral pipelines. The remainder of the 2018 Program facilities, including approximately 158 km of lateral pipelines, will be abandoned in place. Above- and below-ground facility infrastructure would be removed at 16 meter station locations, and excavation and isolation would occur at 34 locations. All abandoned above-ground infrastructure (meter stations and side valves) would be removed. 1.2 The NEB Process Under the NEB Act, the regulator must hold a public hearing to consider an application for leave to abandon a pipeline. The regulator issued a Notice of Abandonment Hearing MHW-003-2019 for the 2018 Program (Notice) on 25 January 2019, which set out how the regulator would consider the Application. NGTL was directed to serve a copy of the Notice on all persons potentially impacted by the 2018 Program including the 57 Indigenous communities with asserted traditional territory in the 2018 Program area. The Notice indicated that any person potentially impacted by the 2018 Program wishing to participate in the hearing process must file a letter by 20 February 2019. The Notice indicated that NGTL must reply by 27 February 2019 to any letters from interested persons that are potentially impacted by the 2018 Program. And finally, the Notice indicated that the regulator would either release a decision on the abandonment application, or determine that additional procedural steps are required and provide a procedural update. On 20 February 2019, the NEB received a letter from Métis Nation of Alberta Region 1 (MNAR1). On 21 February 2019, the NEB received a letter from Métis Nation of Alberta Region 5 (MNAR5). On 27 February 2019, NGTL filed a letter with reply comments. Details are discussed in section 2.5 of this Letter Decision. On 22 July 2019, the NEB sent a letter to all 57 of the potentially affected Indigenous communities and attached a letter from Natural Resources Canada (NRCan) that clarifies the federal Crown’s approach to fulfilling any potential duty to consult that may arise on projects regulated by the NEB. In particular, NRCan stated that “the Federal Crown relies to the extent possible on the NEB processes to fulfill its duty to consult” and that “the Crown strongly encourages Indigenous groups […] to make their concerns known to the NEB”. The NEB did not receive any concerns from potentially affected Indigenous Communities in response to the 22 July 2019 letter. Letter Decision Page 2 of 11 2.0 Assessment of the Application 2.1 Engineering Matters NGTL indicated that the 2018 Program will be carried out in accordance with Canadian Standards Association Standard Z662-15: Oil and Gas Pipeline Systems (CSA Z662-15) and the NEB OPR. NGTL further noted that it will conduct hazard assessments on the pipelines to be abandoned to ensure proper handling, storage and/or disposal of onsite infrastructure, waste and materials. Views of the Commission The Commission finds that the 2018 Program’s abandonment activities as described in the Application are consistent with NGTL’s commitment, and requirement to comply with CSA Z662-15 and the NEB OPR. The Commission is therefore satisfied with NGTL’s approach. The Commission reminds NGTL that it is obligated to comply with the updated and new requirements in CSA Z662-191. 2.2 Economics Matters NGTL stated that the 2018 Program will have no impacts to existing customers or service on the NGTL System. NGTL stated that meeting safety and environmental protection objectives in a cost-effective manner was a key guiding principle for NGTL’s determination of the most appropriate method of abandonment. NGTL confirmed that all potentially affected commercial third-parties have been notified of the 2018 Program and NGTL stated that it was not aware of any issues or concerns. Notification of the anticipated filing of the Application was made to the Tolls, Tariff, Facilities and Procedures Committee on August 16, 2018. NGTL stated that the 2018 Program is expected to have no material impact on tolls on the NGTL System or on the current transportation services offered on the NGTL System. The estimated cost of the 2018 Program is approximately $18.1 million. NGTL confirmed that funding is available and proposes to provide interim funding for all costs associated with the 2018 Program and NGTL stated it intends to subsequently seek reimbursement from the Abandonment Trust for all abandonment costs. 1 The new edition of the CSA Z662-19, Oil and Gas Pipeline Systems standard was released to the general public on 19 June 2019. As the NEB OPR incorporates Z662 by reference “as amended from time to time”, the new version of the standard has entered into force pursuant to the NEB OPR as of that date. The 2015 version of Z662 has been rescinded and replaced; it has no force or effect. An Information Advisory regarding CSA-Z662-19 was issued by the NEB on 8 July 2019. Letter Decision Page 3 of 11 NGTL stated that potential liability exposures associated with the 2018 Program include third-party damage and ground subsidence. However, NGTL expects these exposures to be low based on the mitigation proposed for the 2018 Program. NGTL stated that once equivalent land capability is achieved, no further post-abandonment activities are planned. If, however, additional reclamation monitoring takes place or future activities are required, the costs associated with this work are expected to be funded through the Abandonment Trust. Views of the Commission The Commission notes that the abandonment of the Facilities are not expected to have a material impact on service or tolls for NGTL’s shippers. The Commission is satisfied that NGTL has sufficient funds to carry out the abandonment work. Further, the Commission notes that NGTL’s Abandonment Trust could be drawn upon in the case of unforeseen liabilities or reclamation obligations. The Commission reminds NGTL that, should there be a material change to its Abandonment Cost Estimates (ACE), it must file an application with the Commission. Improving the accuracy of ACEs is an ongoing process which benefits from learnings of abandonments as they take place. Therefore, the Commission imposes Condition 3 – Quarterly Physical Abandonment Activity Cost Reports which requires NGTL to provide actual cost data broken down by abandonment activity. 2.3 Environment Matters The Facilities are located across Alberta within a diverse range of environmental settings. NGTL indicated that it would reclaim the 2018 Program areas to equivalent land capability after abandonment activities are conducted. NGTL’s Environmental Protection Plan (EPP) outlines NGTL’s objectives and process for reclaiming disturbed areas. NGTL further stated that all lateral pipelines would be purged prior to abandonment. Based on the estimated volume of gas to be vented, NGTL estimated that the total greenhouse gas (GHG) emissions would be 7,240 t CO2e, which equates to 0.0028% of 2016 Alberta emissions and 0.0010% of 2016 Federal emissions.