FEDERAL REG

SOR/2016-133: National Energy Board Pipeline Damage Prevention Regulations - Obligations of Pipeline Companies

REGISTRATION OF FEDERAL REGULATION - VIA OIC DATABASE, PRIOR TO PART II OF THE GAZETTE

Registered
June 13, 2016


REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the regulations.) Issues The Pipeline Safety Act, which received royal assent on June 18 2015, amends the National Energy Board Act (NEB Act) to modernize its regulation making authority. The NEB’s regulations for pipeline damage prevention clarify what the requirements are to safely carry out activities, construction, or crossin... (Click for more)


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Published on June 13, 2016

Bill Summary

SOR/2016-133: National Energy Board Pipeline Damage Prevention Regulations - Obligations of Pipeline Companies

REGULATORY IMPACT ANALYSIS STATEMENT (This statement is not part of the regulations.) Issues The Pipeline Safety Act, which received royal assent on June 18 2015, amends the National Energy Board Act (NEB Act) to modernize its regulation making authority. The NEB’s regulations for pipeline damage prevention clarify what the requirements are to safely carry out activities, construction, or crossings around a pipeline. The National Energy Board’s (NEB or Board) regulations for pipeline damage prevention must be updated to provide clear requirements for the public, landowners, land users, and pipeline companies that may be planning to conduct an activity near a pipeline. The regulations also formalize and consolidate damage prevention program requirements so that a consistent approach is taken by regulated companies. The regulations include a requirement that NEB-regulated pipeline companies be members of one-call centres in areas where they operate pipelines, and where one-call centres exist, to share their infrastructure location information with the one-call centre for information coordination. Background Under the NEB Act, the responsibility to prevent pipeline damage is shared between anyone who plans to conduct an activity near a pipeline and the pipeline company. Pipeline companies are required to ensure that people know how to safely conduct activities near pipelines, and people planning activities near pipelines are required to confirm the location of pipelines and meet all conditions before they start these activities. The NEB provides regulatory oversight for both, and must create the conditions necessary to hold persons and companies accountable for carrying out these responsibilities. The NEB’s compliance verification and enforcement activities support this framework and are used to promote safety and environmental protection. The Pipeline Safety Act, which received royal assent on June 18, 2015, amends the damage prevention provisions in the NEB Act, therefore requiring that new regulations be in place by June 19, 2016. The regulations reflect the changes to the legislative authority for the NEB’s damage prevention regulatory framework. In addition, over recent years, the NEB has conducted extensive review of, and consultation, on best practices for pipeline damage prevention. As a result of this work, formalizing the requirement for a pipeline company to have a damage prevention program and including one-call centre requirements for companies and anyone planning an activity near a pipeline are included in the regulations. Regulations The following regulations are now in force: Regulations Amending the National Energy Board Onshore Pipeline Regulations (OPR) [made under subsection 48(2) of the NEB Act] The OPR sets requirements for pipeline companies regarding the design, construction, operation and abandonment of their pipelines while managing with a view to overall safety and environmental protection. National Energy Board Pipeline Damage Prevention Regulations – Obligations of Pipeline Companies [made under subsections 48(2) and 112(5) of the NEB Act] These Regulations replace the National Energy Board Pipeline Crossing Regulations, Part II. They set out requirements for NEB-regulated pipeline companies to prevent damage to their pipelines. Regulations Amending the Administrative Monetary Penalties Regulations (National Energy Board) [NEB AMPs Regulations] (made under section 134 of the NEB Act) Through the NEB AMPs Regulations, the NEB may apply administrative monetary penalties to companies or individuals for non-compliance with the NEB Act, regulations, decisions, permits, orders, licences or certificate conditions. The National Energy Board Pipeline Damage Prevention Regulations – Obligations of Pipeline Companies (DPR-Obligations of Pipeline Companies) contains the pipeline company responsibilities that are reciprocal to those in the National Energy Board Pipeline Damage Prevention Regulations – Authorizations (DPR-Authorizations) for those planning activities near NEB-regulated pipeline. This Regulatory Impact Analysis Statement (RIAS) covers requirements contained in the DPR-Obligations of Pipeline Companies, the OPR and NEB AMPs Regulations. The DPR-Authorizations is addressed in a separate RIAS. Objectives The objectives of the NEB’s amended regulations for pipeline damage prevention are to align the regulations with the changes that the Pipeline Safety Act makes to the NEB Act; set out the requirements that NEB-regulated companies must meet in developing their damage prevention programs and related public awareness programs; enhance safety through coordinated information sharing between pipeline companies, one-call centres, and anyone initiating a locate request before starting any activities near a pipeline; and align the Administrative Monetary Penalties Regulations (National Energy Board) with the NEB’s amended regulations for pipeline damage prevention. Description The Pipeline Safety Act amendments to the NEB Act are in force as of June 19, 2016, requiring that the NEB’s regulations for pipeline damage prevention be updated by that date. In addition, the NEB had proposed amendments to the regulations, and consulted on these in 2014. Broad support was expressed for formalizing the requirement for a pipeline company to have a damage prevention program and to belong to a one-call centre. Damage prevention program The regulations formalize the requirement for a clear damage prevention program that is contained in the amended OPR. In addition, specific requirements for a damage prevention program are now consolidated in the DPR-Obligations of Pipeline Companies. Requirements for a public awareness program are consolidated to inform the public on how to work safely around the pipeline; how to report an emergency or any contact with, or damage to, a pipeline; how to use the services of a one-call centre; the necessity for prior authorization when conducting certain activities near a pipeline; the information to be provided in requests for consent prior to conducting an activity; and the requirement to make a locate request and how to do so. The regulations also consolidate the requirements for monitoring of land use and land ownership changes near a pipeline; a process for timely responses to locate requests; standards for locating pipes; and a process for managing requests for consent under the regulations. Consolidating these requirements in the regulations allows NEB-regulated pipeline companies to have better defined damage prevention programs, which will improve mitigation and prevention efforts and provide for more detailed engagement with the public on pipeline damage prevention. This will serve to improve overall pipeline safety and environmental protection. One-call centre requirements The DPR-Obligations of Pipeline Companies include the requirement for a NEB-regulated pipeline company to be a member of a one-call centre in the geographic areas across Canada where it operates a pipeline and where a one-call centre exists. A one-call centre is an organization that receives locate requests and, for each locate request received, notifies the potentially affected members of any construction or activities that are the subject of the locate request. One-call centre members participate in this effort for the purposes of protecting their facilities from damage and of ensuring public safety. The regulations also require that a company’s public awareness program informs the public of the services of a one-call centre in the area. Pipeline companies responding to requests for conducting activities, construction and crossings The DPR-Obligations of Pipeline Companies has been updated to reflect the authorization framework introduced through the Pipeline Safety Act changes to the NEB Act. As a result, the DPR-Obligations of Pipeline Companies provides requirements for companies to provide consents for anyone conducting activities or construction near pipelines and for pipeline crossings. The conditions and measures found in the previous regulations to carry out these activities are largely maintained in the DPR-Obligations of Pipeline Companies. For example, a company responding to a request from a person planning to carry out activities or construct a facilities near a pipeline still needs to provide a written response with consent for conducting the activity along with the safety conditions for conducting the activity, or reasons for not providing the consent, within 10 working days of receiving the request. The regulations also incorporate the intent of the NEB’s Exemption Order Respecting Crossings by Agricultural Vehicles or Mobile Equipment (Order MO-21-2010). Companies must identify the location where agricultural activities have the potential to damage the pipeline and provide notification in writing to the landowner or those engaged in agricultural activities in those areas. Existing permissions The regulations contain transitional clauses for record keeping for existing permissions and any suspensions for permissions that were in place at the time the amended regulations come into force. Administrative monetary penalties The NEB uses various types of enforcement activities throughout the life cycle of a pipeline. These include the issuance of notices of non-compliance, orders, directions, and administrative monetary penalties (AMPs); the suspension of authorizations; and prosecution. AMPs are applied when they are the most appropriate tool, such as when compliance is not obtained using other enforcement tools or when harm is caused because of non-compliance. The NEB AMPs Regulations identify violations of specific provisions of NEB regulations that could cause violators to be subject to an administrative monetary penalty. They outline when penalties apply and how the amount is calculated. The NEB AMPs Regulations provide that if a company or individual does not agree with the notice of violation, the company or individual can request that the Board review the amount of the penalty, the facts of the violation, or both, within 30 days of receiving the notice. There are no changes to the enforcement or recourse processes in the regulations. The NEB AMPs Regulations, made under section 134 of the NEB Act, are amended to reflect the changes in the NEB’s regulations for pipeline damage prevention. Typographical updates have also been made to align section numbering and the list of violations is updated. “One-for-One” Rule There are no incremental administrative requirements associated with the regulations, and the “One-for-One” Rule does not apply. Small business lens The small business lens does not apply to the regulations. Consultation The NEB issued a letter on its Web site on October 20, 2015, providing information that the NEB’s damage prevention regulations must be updated following adoption of the Pipeline Safety Act, and that the previously proposed amendments would be carried forward into the proposed regulations. In addition to being available on the NEB Web site, these materials were distributed to groups that had shown previous interest in the NEB’s damage prevention regulations. The NEB received 18 letters of comment from a variety of groups including landowner and damage prevention associations, industry associations, farming and agricultural and sod associations, a municipality, and NEB-regulated companies and interested individuals. Twelve letters expressed support for requirements for companies to have a damage prevention program, with specific damage prevention controls, and to belong to a one-call centre. On 8 January 2016, the NEB provided the information issued on its Web site on October 20, 2015, to Indigenous organizations in the geographic areas across Canada where NEB-regulated pipelines operate. The information provided an offer for NEB technical staff to meet with Indigenous organizations to explain the information on updates required for the regulations. On March 18, 2016, the NEB issued a notification on its Web site that the proposed regulations were available in the Canada Gazette, Part I, for a 30-day comment period ending April 18, 2016. The notification and a copy of the proposed regulations from the Canada Gazette, Part I, were emailed to over 120 recipients across Canada, including national and regional landowner and damage prevention associations; farming, agricultural, nursery and sod associations; municipal associations; industry associations; NEB-regulated companies; and interested individuals. The notification and proposed regulations were emailed to 36 Indigenous organizations in the geographic areas across Canada where NEB-regulated companies operate pipelines. On-line information sessions and meetings were held during the comment period to provide information and answer questions on the proposed regulations. The NEB received 30 letters of comment from a range of stakeholders interested in damage prevention and pipeline companies. Damage prevention program and one-call centre requirements Comments submitted expressed support for the requirement for NEB-regulated companies to have a damage prevention program as part of their management system and to be a member of a one-call centre in the geographic area(s) across Canada where they operate pipelines, and where a one-call centre exists. As such, no changes to the proposed regulations were made. Through a damage prevention program, companies are required to continually assess hazards to the pipeline from a damage prevention perspective. Formalizing the requirement for a damage prevention program complements the changes introduced by the Pipeline Safety Act change by ensuring that companies have the management system in place required for ongoing assessment and improvement of their damage prevention processes. A company’s damage prevention program clarifies the roles and responsibilities, and communication requirements between the company and those working near pipelines. Pipeline companies responding to requests for conducting activities, construction and crossings Comments submitted expressed support for pipeline company responsibilities for damage prevention. Support was also expressed for the requirement for pipeline companies to have specific components related to ongoing management of damage prevention controls in their damage prevention programs. Many of the comments submitted related to implementation of safety requirements in the previous regulations, which are largely maintained in the regulations. The basic safety steps in the damage prevention framework required by both previous and the updated regulations include: planning the activity and including time for approvals; making a locate request and contacting the pipeline company; being on site when the pipeline is located and knowing the meaning of the pipeline markers; following the pipeline company’s safety measures and the instructions of the on-site pipeline company representative. Requests for further clarification of the requirements for pipeline damage prevention, which are largely maintained from the previous to the updated regulations, are addressed in NEB guidance materials. Several changes were made to the DPR-Obligations for Pipeline Companies as a result of stake holder comments. In paragraph 7(b), the definition for agricultural activities has been clarified for consistency across the regulations. In section 9, the section in the regulations has been clarified to require that if a pipeline company detects any deterioration of a facility that might adversely affect a pipe, the pipeline company must notify the facility’s owner in writing. Detecting deterioration of a facility can occur through many means, including inspections, observations, incidents or self-reporting by the owner of the facility. This change is also reflected in the NEB AMPs Regulations. The words “including its abandonment” have been removed from the record keeping requirement in subsection 12(1). Records of construction of facilities and activities causing a ground disturbance must be kept during the life of the pipeline. Administrative monetary penalties Recommendations were not received on the content of the amending regulations. Recommendations were made that funds from the NEB AMPs Regulations be put back into public awareness for damage prevention or be given to landowners. However, remittance of penalties under the NEB AMPs Regulations is subject to section 151(1) of the NEB Act which provides that a penalty constitutes a debt due to Her Majesty in right of Canada, and the funds are payable to the Receiver General for Canada. Rationale The regulations ensure that the requirements for pipeline damage prevention are aligned with legislation introduced through the Pipeline Safety Act amendments to the NEB Act. The regulations formalize and consolidate damage prevention practices and clarify damage prevention requirements in order to promote continued prevention of damage to pipelines, as well as the safety of people and protection of the environment. Damage prevention program As an industry best practice, NEB-regulated companies have damage prevention programs or operate under the program of a parent company. The OPR contains damage prevention requirements and requires companies to perform regular review and ongoing maintenance of programs associated with their management systems. Including the requirement for a damage prevention program and providing greater detail on the content of the program formalizes and standardizes the regulatory requirement for a company’s damage prevention program. One-call centre membership Company membership in one-call centres has been the industry best practice for several years. Over 90% of NEB-regulated pipelines in Canada are owned by companies that are members of one-call centres. It is estimated that 98% of NEB-regulated pipelines are registered with one-call centres; the remaining 2% are in areas where there is no one-call centres. Where no one-call centres exist, a person is required to contact the individual pipeline companies directly to initiate a locate request, as currently required in the regulations. Requiring NEB-regulated companies to be members of a one-call centre where centres exist and where companies have buried pipe ensures ongoing coordination and greater certainty for all parties that need to be involved in the prevention of damage to pipelines and all buried infrastructure. Given that NEB-regulated pipelines are registered with one-call centres, where one-call centres exist, the regulations have no incremental cost for business. Pipeline companies responding to requests for conducting activities, construction and crossings The Pipeline Safety Act enables modernization of NEB Act regulations for pipeline damage prevention, and supports alignment with more recent provincial damage prevention regulations. While the requirements anyone planning construction or activity near a pipeline, or crossing it with a vehicle or mobile equipment remain largely the same, they also provide clarity about the regulatory requirements for all involved to prevent damage to a pipeline and to maintain the safety of people and protection of the environment. Implementation, enforcement and service standards Under the NEB Act, the NEB enforces regulatory requirements to obtain compliance, deter future non-compliance, and prevent harm by using the most appropriate tools available. No changes to compliance and enforcement authority or responsibilities result from these regulations. The NEB has trained and qualified damage prevention inspectors and enforcement personnel, and existing regulatory oversight programs. The NEB will continue to perform regular inspections and audits. The NEB uses a series of compliance and enforcement tools, including audits and inspections, compliance meetings, notices of non-compliance, orders and administrative monetary penalties to encourage compliance with regulations to minimize infractions related to safety and damage prevention. Each case is examined on an individual basis to determine the best course of enforcement to make sure damage prevention and safety requirements are followed. The updated Administrative Monetary Penalties Regulations (National Energy Board) will be implemented where appropriate. There are no new service standards in the regulations. There are existing Board processes in place to support the implementation of the regulations, and NEB guidance will be updated to reflect the proposed regulations. Existing time requirements are carried over into the proposed regulations, including the requirement for a pipeline company to reply within 10 working days after receiving a person’s request for information relevant to an application made to the Board for authorization to conduct an activity. All of the regulations come into force on the first day on which sections 15 and 34 of the Pipeline Safety Act are in force, but if they are registered after that day, they come into force on the day on which they are registered. Contact Shannon Neufeld Technical Leader Damage Prevention National Energy Board 517 Tenth Avenue SW Calgary, Alberta T2R 0A8 Toll-free telephone: 1-800-899-1265 Fax: 403-299-5503 Toll-free fax: 1-877-288-8803 Email: [email protected] Footnote a S.C. 2015, c. 21, s. 15(1) Footnote b S.C. 2015, c. 21, s. 34(2) Footnote c R.S., c. N-7 Footnote d S.C. 2015, c. 21, s. 15(1) Footnote e R.S., c. N-7 Footnote 1 SOR/88-529

This Bill does not amend any statutes.

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