TC Energy has a program in place to set aside money for the eventual abandonment of pipelines and facilities when they are no longer required. To this end, we established abandonment trusts for all of our Canada Energy Regulator (CER) regulated pipelines, where funds are deposited to provide funding for the costs associated with abandonment.
The trusts are part of TC Energy’s overall commitment to landowners and communities to ensure the safe, responsible retirement of our assets. With CER oversight and approval, TC Energy manages these trusts and regularly reports on their status.
Note: The Canada Energy Regulator (CER) replaced the National Energy Board (NEB) in August 2019.
Most of TC Energy’s Canadian assets are regulated by the Canada Energy Regulator (CER), which replaced the National Energy Board (NEB) in August 2019. When TC Energy decides to decommission or abandon pipeline assets, the pipeline in question makes the necessary filings with the CER. For example, NGTL applied to the NEB on August 18, 2016 to abandon a 266-kilometer section of the Peace River Mainline in Northwestern Alberta. On March 14th, 2018, the NEB approved the application after a regulatory review that included both written and oral evidence. More information on the NGTL’s Peace River Mainline Retirement Program can be found on TC Energy’s website.
Additional information of CER oversight of pipeline abandonment and the process by which the company must follow can be located here.
TC Energy sets aside funds for abandonment and decommissioning of pipeline assets using carefully prepared cost estimates. As part of the NEB’s MH-001-2012 public proceedings, TC Energy filed abandonment cost estimates (ACEs) where the reasonableness of the cost estimates was considered. The NEB examined the reasonableness of assumptions regarding proposed abandonment methods, scope and rationale for each abandonment activity considered to estimate costs for various activities, and the approach to the estimation of contingency and provisions for post abandonment. The NEB approved TC Energy’s first ACE Applications in 2014 that were in 2014 dollars.
The NEB committed to the public, all landowners, indigenous groups and interested stakeholders that cost estimates would be reviewed regularly, at least every five years to ensure sufficient funds are available. On February 8, 2016, the NEB initiated the 2016 Abandonment Cost Estimate Review for all Group 1 companies under its jurisdiction, such as the TC Energy Companies. The TC Energy Companies filed updated ACEs with the NEB on September 30th, 2016 reflecting costs in 2016 dollars. The revised 2016 ACEs also included details modifying its approach to estimating contingency, updated the NEB on consultation activities, and submitted a five-year preliminary decommissioning and abandonment plan. The five-year plan also addressed associated funding and impacts on funds set aside in each of the TC Energy Companies Abandonment Trusts. The NEB approved the TC Energy Companies updated ACEs on April 18, 2018. The most recently approved ACEs can be found on the CER site at the links below:
NOVA Gas Transmission Ltd:2016 Abandonment Cost Estimate
TransCanada PipeLines Limited:2016 Abandonment Cost Estimate
Foothills Pipe Lines Ltd.:2016 Abandonment Cost Estimate
Trans Québec & Maritimes Pipeline Inc.:2016 Abandonment Cost Estimate
TransCanada Keystone Pipeline GP Ltd.: 2016 Abandonment Cost Estimate
Great Lakes Canada:2018 Group 2 Abandonment Cost Estimate (NEB approval pending)
Eligible costs related to pipeline abandonment and decommissioning activities (collectively referred to as reclamation obligations) are intended to be funded from Abandonment Trusts. Pipelines with an Abandonment Trust as their set-aside mechanism pre-fund reclamation activities and seek reimbursement from their respective Abandonment Trust for costs incurred, subject to CER approval.
On September 25, 2015 Foothills, a subsidiary of TC Energy, filed an Application to Decommission approximately 9.1km of pipeline of its system. The NEB approved TC Energy’s Application on December 22, 2015 and work to decommission the section of pipeline commenced shortly thereafter. When work was completed, TC Energy applied to the NEB on December 6, 2016 for approval of reimbursement from the Foothills Abandonment Trust for costs associated with performing these reclamation obligations. The NEB granted Foothills’ request to be reimbursed for the Reclamation Obligation Costs and issued an order directing the Trustee of the Foothills Abandonment Trust to release the amount of $1,644,567 to Foothills Pipe Lines. To view the Foothills Applications and NEB Orders, please click on the following links on the CER’s website:
Download and read funding reporting forms and financial statements for some of our key CER regulated Canadian natural gas and oil & liquids assets below.
Most of TC Energy’s Canadian assets are regulated by the Canada Energy Regulator (CER), which replaced the National Energy Board (NEB) in August 2019
We’ve established trusts with the Canada Energy Regulator (CER), which replaced the National Energy Board (NEB) in August 2019, to ensure the responsible retirement of our assets once they have reached the end of their lifecycle.
Read more about the financial aspects of this process at the CER website.
The amount to be collected and set aside each year is approved by the CER. As of December 31, 2017, the balance of funds set aside in the trust accounts are provided in the 2017 Abandonment Funding Forms for individual pipelines viewable in the forms above.
We are required to collect and set aside funds for all of our federally regulated pipelines under CER jurisdiction. This includes the Canadian Mainline, NGTL, Foothills and TQM natural gas pipeline systems and the Keystone oil pipeline system.
Our customers who transport natural gas and oil through our pipeline systems are levied a surcharge to cover costs associated with the abandonment of those pipelines. This surcharge is collected and protected in trusts established for each individual pipeline.
Yes. The CER requires a periodic review process that includes public participation to ensure appropriate funds are collected for pipeline retirement. We also regularly assess our finances to ensure adequate funds will be available when needed.
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