The basics of pipeline regulation

Pipelines are one of the safest, most cost effective and environmentally friendly way of transporting energy. There are a lot of factors that contribute to this reality. One of the main factors is the substantial regulation of the pipeline industry.

Pipeline regulation can be a complex topic, so we’ve put together this post to give you the basics of regulation.

Why are pipelines so thoroughly regulated?

According to Feisal Gazie, Manager, Regulatory Strategy & Compliance, Market Development for Enbridge Pipelines Inc., the pipeline industry is thoroughly regulated to protect the interests of a number of parties, including average Canadians. These pipelines regulations are developed to balance our energy and economic needs with the protection of the environment.

“Pipelines are regulated to promote safety, environmental protection and economic efficiency for the benefit of Canadians. These regulations are designed to protect against the potential negative impacts of energy development while enabling the benefits of energy supply, security and economic development for all Canadians,” says Gazie.

Of course there are some parties more directly involved with pipelines and Gazie says pipeline regulations are there to protect them as well:

“Pipelines are regulated to balance the competing interests within industry between producers of energy, shippers, pipelines and end-users. Beyond that, pipelines are regulated to balance the interests of industry with landowners, Aboriginals, environmental groups and the general public.”

Who regulates pipelines?

Private companies own pipelines and construct and operate their pipelines according to the rules and regulations established by provincial and federal regulators.

These regulators are responsible for ensuring that companies meet all regulations for the safety of employees, the public and the environment throughout the design, construction, operation, maintenance and potential abandonment of a pipeline.

“Regulators are impartial organizations that are charged with the responsibility of ensuring only those projects that are in the public interest of Canadians are approved,” explains Gazie.

And they rely on the knowledge of industry experts to make these important decisions:

“They employ numerous experts in fields including biology, engineering, law, and economics in order to provide advice to decision makers, who themselves have extensive experience in the operation and regulation of pipelines.”

Here’s a quick breakdown of exactly who regulates what:

Federal regulators

  • Pipelines that cross provincial or national borders fall under the responsibility of federal regulators.
  • The National Energy Board (NEB) regulates the construction and operation, tolls and tariffs of interprovincial and international pipelines.

Provincial regulators

  • Most provinces and territories have energy regulatory bodies with specific mandates and responsibilities for their jurisdiction.

Both the federal and provincial regulators work with numerous provincial and federal agencies.

What exactly is regulated?

The short answer is everything – every step of a pipeline’s life cycle, from before construction to the potential abandonment of the pipeline, is regulated.

Here’s a quick rundown of the process:

Before a pipeline can be built, the pipeline operator must file an application with a regulator for approval. An application contains important information, including consultation, environment, safety, commercial, and engineering components of the pipeline application.

If the pipeline project is approved, the regulator may attach conditions to ensure the pipeline is operated safely and that the environment is respected and protected. These conditions are monitored and enforced throughout the entire life of the project, from construction through to operation and the potential abandonment of the facility.

Regulators may also audit and inspect a pipeline’s construction activities and operations to ensure compliance with regulations and that the public and environment continue to be protected.

How do we know these regulations are being followed?

Pipeline regulations are in place because regulators and pipeline owners are united in their strict commitment to safety.

“Safety is a top priority. Both pipelines and regulators aim to prevent incidents from occurring in the first place and take all available actions required to protect the environment and the public. Pipeline companies strive to anticipate, prevent, manage and mitigate any potential negative or dangerous condition associated with the transportation of energy,” says Gazie.

As further assurance to Canadians, regulators are continually developing ways to increase public involvement and have become increasingly transparent by publishing results of compliance and by developing and implementing regulations through public consultation and review processes.

Information on regulatory compliance is free and open to the public. Check out the following resources to stay informed:

The Canadian Energy Pipeline Association represents Canada’s transmission pipeline companies who operate approximately 110,000 kilometres of pipelines in Canada. In 2011, these energy highways moved approximately 1.2 billion barrels of liquid petroleum products and 5.3 trillion cubic feet of natural gas. Our members transport 97% of Canada’s daily natural gas and onshore crude oil from producing regions to markets throughout North America.