Pipeline Safety Act Provides Significant Changes to the NEB Act

The Pipeline Safety Act (Bill C-46), which first received Royal Assent on June 18, 2015, went into full force Monday, providing relevant and significant changes to the National Energy Board (NEB) Act as well as a few changes to the Canada Oil and Gas Operations Act.

According to an NEB statement, the most significant changes relate to absolute liability and financial resource requirements, abandonment, pipeline releases, damage prevention, and audit and enforcement powers.

The Pipeline Safety Act sets new measures to ensure NEB-regulated pipeline companies have enough financial resources to pay costs in the event of a spill or rupture. These companies who operate pipelines that have the capacity to transport at least 250,000 barrels per day of oil will now be liable for all costs and damages for leaks or ruptures up to C$1 billion, regardless of fault. Remaining companies will have absolute liability set through regulations.

Current companies affected by the C$1 billion absolute liability include Enbridge Pipelines, Enbridge Pipeline Westspur, Express Pipeline, TransCanada Keystone Pipeline, and Trans Mountain Pipeline. Other projects awaiting approval for construction that would also fall under these new regulations include TransCanada’s Energy East pipeline project and Kinder Morgan’s Trans Mountain expansion project.

New regulations have also been made for damage prevention. These regulations lay out the obligations of those planning construction of facilities, ground disturbance activities, or mobile equipment crossing near an NEB-regulated pipeline.

Now under expanded jurisdiction of the NEB, pipeline companies will remain reliable for post-abandonment costs and damages of pipelines. The regulations provide the NEB with new powers for Inspection Officers as well as new authority to assume control of an abandoned pipeline if a company does not comply with an NEB order.

Further, the Governor in Council has the authority to designate a company in the event of a pipeline leak or rupture if it does not have the ability to pay costs for the release or does not comply with an NEB order, which then authorizes NEB to take over the spill response.

Read more about the regulatory changes:

Mining Weekly