98 pipeline companies regulated by the National Energy Board
73,000 km of pipelines regulated by the National Energy Board
$106 billion/year - the value of energy products transported via pipeline (2015)
1,339 million barrels/year of oil transported via pipeline
6,200 billion cubic feet/year of natural gas transported via pipeline
Federal Pipeline Regulatory Regime
With 825,000 kilometres of transmission, gathering and distribution pipelines in Canada, most provinces have significant pipeline infrastructure. Close to 100 pipeline companies are federally-regulated and operate approximately 73,000 kilometres of pipelines in Canada.
Federal Pipeline Regulator
The National Energy Board (NEB) is an independent federal agency that regulates cross-border pipelines in Canada. The role of the NEB is to make sure pipeline companies meet strict requirements to keep Canadians and the environment safe.
The National Energy Board Act is the legal framework that ensures that federally-regulated pipelines are designed, constructed, operated and abandoned in a manner that is safe for the public and the environment. Regulations made under this Act, such as the National Energy Board Onshore Pipeline Regulations, require that companies design safety management, environmental protection, emergency management, third-party crossing, public awareness, and integrity management programs, which are reviewed by the NEB.
Pipelines and equipment regulated by the NEB must meet Canadian Standards Association specifications. The CSA Standard Z662 — Oil and Gas Pipeline Systems sets out the technical standards for the design, construction, operation, maintenance, and decommissioning of Canada’s oil and gas pipelines.
The NEB is also responsible for conducting environmental assessments for the projects it regulates in accordance with the Canadian Environmental Assessment Act, 2012.
The NEB requires pipeline companies to have integrity management programs in place to ensure the physical condition of the pipeline is monitored and maintained so that releases do not occur.
The NEB conducts ongoing pipeline monitoring, inspections, and site visits to confirm compliance to regulatory requirements. Where necessary, the NEB can issue mandatory compliance orders or use other appropriate tools to enforce these requirements.
The Pipeline Safety Act came into force on June 19, 2016. The Act enshrines the polluter-pays principle into law, clarifies audit and inspection powers of the NEB, and ensures companies remain responsible for their abandoned pipelines. The Government of Canada has also sought the NEB’s guidance, through a study and report, on the use of best available technologies in federally regulated pipeline projects. This includes materials, construction methods, emergency response techniques, and environmental considerations.
Preparedness and Response
The NEB requires companies to have an emergency management program that anticipates, prevents, manages and mitigates conditions during an emergency that could adversely affect property, the environment, or the safety of workers or the public.
Companies must also develop, review and update emergency procedures manuals, and submit these manuals to the NEB. The regulator requires key emergency response information to be made public and has ordered all pipelines companies to publish their emergency procedures manuals on their websites by the end of September 2016.
The NEB must be notified immediately of any release that occurs on federally-regulated pipelines. In an emergency situation, the NEB’s top priority is to make sure that people are safe and secure, and that property and the environment are protected.
Pipeline companies must have incident first-responders and continually educate all first-responders, such as fire departments and police, on procedures to be followed in the event of an emergency.
When an emergency occurs, the NEB:
- Monitors, observes, and assesses the company’s emergency response
- Investigates the incident, sometimes in cooperation with the Transportation Safety Board (TSB). The mandate of the TSB is to identify and publicly report the causes and contributing factors of incidents, and to make recommendations to eliminate or reduce any identified safety issues.
- Initiates enforcement actions
- Oversees remediation actions
- Coordinates post-incident follow-up
- Updates its online incident map
The Pipeline Safety Act requires companies to demonstrate that they have financial resources to match at a minimum their level of absolute liability. A portion of these resources will need to be readily accessible to help ensure rapid incident response.
Liability and Compensation
Pipeline companies regulated by the NEB are liable for all remediation costs if at fault or negligent. Regardless of fault or negligence, companies are required to address and mitigate pipeline incidents, and the NEB can issue orders to this effect.
Companies may be subjected to administrative penalties or other enforcement actions if they do not comply with regulatory requirements
For example, companies can be prosecuted for certain violations of the National Energy Board Act, with fines ranging from $100,000 to $1 million and imprisonment from one to five years. The NEB can also impose Administrative Monetary Penalties to individuals or companies for infractions, ranging from $25,000 to $100,000 per day per violation.
The Pipeline Safety Act enshrines in law the “polluter pays” principle, under which companies have unlimited liability when at fault or negligent; introduces absolute liability for all NEB-regulated companies, meaning that companies will be liable for all costs and damages up to set limits ($1 billion for companies operating major oil pipelines) without proof of fault or negligence; provides governments the ability to pursue pipeline operators for the costs of environmental damages; authorizes the NEB to order reimbursement of costs and expenses incurred by others in taking actions related to an incident; and, allows for the NEB to take control of incident response in exceptional circumstances, if a company operating a pipeline is unwilling or unable to shoulder its responsibilities. In such a circumstance, costs are to be recovered fully from industry.
Users are reminded that this publication has no legislative sanction. It has been consolidated for convenience of reference only. Original Regulations should be consulted for all purposes of interpreting the law.