There are a lot of myths about transmission pipelines that can cause misunderstanding and confusion. Part of our role is to clarify these myths.
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Myth: Who pays if there’s a pipeline spill? We do – not you.
Fact: Canadian transmission pipelines have been safely delivering the energy that Canadians use every day for a long time. In fact, over the last ten years the industry has a 99.999 per cent safe delivery record – and we’re working hard to get to 100 per cent.
Who Is Responsible to pay for Pipeline Spills?
But spills still happen occasionally; and when they do, the pipeline operator and industry are responsible for ALL clean up and recovery efforts. It’s called the Polluter Pays principle and it’s law under the Pipeline Safety Act, which came into force in June 2016.
You, the Canadian taxpayer, do not have to pay a dime. So, how does Polluter Pays actually work? Here are some of the key points.
Pipeline operators are prepared to respond
CEPA members are sophisticated and well-capitalized corporations, and take spill response, recovery and remediation very seriously. These companies know their pipelines inside and out – and are ready to respond if a spill does happen.
All CEPA members have emergency response plans in place as well as technical and financial resources to respond to any incident. In addition, member company employees have built relationships with first responders who would also respond to incidents, including running through the emergency plans and test exercises with them. Above all, member companies are committed to responding effectively and to restoring the environment if there is a spill.
Adherence to extensive federal and provincial regulation assures pipelines are operated safely. Both the NEB and provincial regulators review and audit operators’ emergency response plans and require companies to conduct regular inspections on their pipelines.
The Pipeline Industry has funds at the ready
All CEPA members have insurance to cover the costs if an incident does occur. They also have the financial capacity to pay further costs up front, if needed.
No tax dollars -- we’re backed by our fellow companies
The absolute financial liability that falls on industry for the costs associated with a spill is instilled in law under the Pipeline Safety Act. In the unlikely event that a company can’t pay all the costs associated with a spill, other members of the industry are required to pitch in.
The National Energy Board (NEB) can also access money from an industry-pooled fund and from a Consolidated Revenue Fund to cover expenses. If the Consolidated Revenue Fund is used, money is then recovered from industry, with no financial burden passed on to taxpayers.
Pipeline Companies Accept Absolute Liability
The Pipeline Safety Act assures Canadians that companies will financially and physically clean up all spills. Regardless of who or what is at fault, pipeline companies pay the entire cost up to $1 billion with no questions asked. You can learn more about the concept of absolute liability on this NEB page.
Transmission pipeline spills are very, very rare. When they happen, we jump into action. And cover every dollar of the cost. That’s part of our commitment to delivering the energy to Canadians in the safest and most responsible way.
Myth: Pipeline retirement is common
Fact: Pipeline facilities are sometimes deactivated or decommissioned. However, applying to retire a major transmission pipeline has never happened.
Due to the relatively young age of pipeline systems, there have been no cases of retiring large-diameter pipelines in North America.
Myth: Landowners don’t have a say in pipeline retirement
Fact: Consultation with a landowner is a key step in determining if a retired pipeline should be left in place or removed.
Pipeline companies must also work with landowners to develop reclamation plans, so that the land around facilities can be returned to a state comparable to the surrounding environment.
Myth: Retired natural gas and liquids pipelines are full of product that will contaminate the ground
Fact: If a pipeline is left in the ground, it has to be properly purged and cleaned before retirement.
There are a couple of options for retiring a pipeline. Companies can leave the pipe in place, remove sections of the pipeline or completely remove the pipeline. However, in most cases it is safe, less disruptive to the environment and more cost-effective to leave a pipeline in place.
Myth: If pipelines are taken out of service because they are no longer needed (retired), the costs and risks associated with the abandoned pipeline falls to the owner of the land where the pipeline is located
Fact: In Canada, by law, federally regulated pipeline companies, not the landowner, are responsible for the abandonment of their pipelines.
Pipeline companies are ultimately responsible for the full costs of operating and abandoning their pipelines they are held responsible for these costs by the regulator.
Myth: A pipeline can be “abandoned”
Fact: A company cannot just walk away from a pipeline – operators have a lifetime commitment to ensure their operations remain safe for the public and the environment, even if a pipeline isn’t being used.
If an operator wants to permanently retire a line and associated facilities, it’s still responsible for long-term safety and environmental protection of the area.
Myth: Hydrostatic testing is the only way to test pipeline integrity
Fact: Hydrostatic testing is one of many technologies used to test pipelinesPhased array ultrasonic testing is another way of checking the integrity of pipeline welds in 3D.
Inline inspection tools called smart pigs check the pipeline from inside, looking for anything that might indicate a weakening or thinning of the steel.
Myth: Canada’s pipeline regulations are not strong enough
Fact: The regulatory process to approve and maintain pipelines is rigorous and transparent to protect the public interest. Canada has one of the most highly-regulated, safest pipeline industries in the world.
In addition, pipeline companies must meet numerous standards published by the Canadian Standards Association related to the design, construction, operation and maintenance of oil and gas pipeline systems.
Myth: Pipeline companies run their pipelines at dangerously high pressure to reduce their operating costs
Fact: Each pipeline has a maximum allowable operating pressure, and to exceed that maximum is prohibited by law.
It is typical for pipeline companies to operate their pipelines below the allowable maximum operating pressure.
Myth: Diluted bitumen from the oil sands is harder to clean up if it spills from a pipeline
Fact: In the event that diluted bitumen was to spill, the procedures for cleaning up the spill would be similar to cleaning up a conventional crude oil spill.
Environmental and site-specific conditions will determine the type of procedures and equipment used during the clean-up.
Myth: Oil sands crude is more corrosive than other types of crudes and can cause damage to pipelines
Fact: Pipelines transporting oil sands crude (diluted bitumen) are not at any greater risk of corrosion than pipelines carrying other types of petroleum products, such as conventional crude.
There is virtually no difference between oil sands crude and conventional crude oil. Our industry has been safely transporting diluted bitumen in pipelines for more than 30 years and conventional crude for more than 60 years.
Myth: All pipelines corrode
Fact: Corrosion is preventableProtective coatings keep pipelines from corroding in wet soil. Cathodic protection is also used – electrical current draws corrosion away from a pipeline to another piece of metal, called an anode. In addition, the industry uses scrapers, which are large wire brushes that rotate through the pipeline cleaning away deposits, to prevent product from building up and corroding the pipeline.
Myth: Canada’s pipelines are old and deteriorating, increasing the risk of spills
Fact: With proper maintenance and monitoring a pipeline can be safely operated indefinitely.
Pipelines are subject to regular testing and assessment to ensure continued safe operations. The age of a pipeline is not in and of itself a reason for concern.
Myth: No one is watching for pipeline leaks
Fact: Technology helps monitor pipelines 24/7
Thanks to Supervisory Control and Data Acquisition (SCADA) equipment, pipelines can be monitored 24/7, using a wide array of advanced technology.
Myth: Pipeline companies don’t value Aboriginal knowledge
Myth: Pipeline companies cut corners in areas such as safety to make more money
Fact: Pipeline companies operate under financial regulation. Investments in pipeline safety and integrity are adequately covered by the tolls their customers (oil and gas producers) pay them to transport their product.
There is no financial incentive for pipeline companies to cut safety expenses; in fact, there is a strong financial incentive to invest in pipeline safety so that their pipelines can continue to operate in a reliable manner.
Myth: Pipeline companies do not take responsibility for their spills
Fact: In the event of a pipeline incident, pipeline companies are 100 per cent responsible to clean up the spill and to ensure any impacted land is remediated to as close to the original condition as possible.
Myth: Irreparable environmental damage from pipeline spills is inevitable
Myth: Renewable energy development conflicts with the interests of pipeline companies
Fact: Many pipeline companies are actually invested in sources of renewable energy.
For example, Enbridge is invested in 16 wind farms, and a TransCanada compressor station in BC provides emission-free electricity for the province’s power grid.
Myth: Pipelines are unsafe
Fact: Pipelines are a safe and environmentally sound way of transporting large quantities of crude oil and natural gas over land.
Transmission pipelines in Canada operate with a 99.999% safety record, and incidents on pipelines are rare relative to other modes of transportation.
Myth: Pipeline operators don’t protect Canada’s wildlife, forests, waterways or land
Myth: The pipeline industry doesn’t care about climate change
Fact: The facts show climate change is real. That’s why pipeline companies are working to reduce emissions from their operations while delivering energy that is still needed by people in Canada and around the world.
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