An Overview of Environmental Issues Pertaining to Abandonment of an NEB-Regulated Pipeline: A Case Study of the Yukon Pipelines Limited Abandonment

Abstract

The National Energy Board (NEB or the Board) is an independent regulatory tribunal that regulates various aspects of the Canadian energy industry, including the design, construction, operation and abandonment of oil and gas pipelines that cross provincial or international borders. Under section 74(1)(d) of the National Energy Board Act, a company shall not, without the leave of the Board, abandon the operation of a pipeline. To date, only one large-scale abandonment of an NEB-regulated pipeline has occurred. However, as pipeline infrastructure ages and markets shift, pipeline abandonments are likely to become more common. It is therefore important to review and learn from this case so that industry and regulators may effect future abandonments in as efficient and environmentally responsible a manner as possible. The Yukon Pipeline was part of the Canol Pipeline built by the United States Army in 1942. From 1958 through 1994, Yukon Pipelines Limited (YPL) and related companies operated the portion of pipeline from Skagway, Alaska, to Whitehorse, Yukon, to transport furnace oil, diesel fuel and gasoline to Whitehorse for distribution and use in the Yukon. The 114 km Canadian portion of the Yukon Pipeline, as well as an associated pump station at Carcross, Yukon, and a tank farm in Whitehorse, have been regulated by the NEB since 1962. An abandonment hearing was held in 1996, and the NEB issued a conditional order granting YPL leave to abandon the pipeline. The order would not come into force until YPL conducted further contaminant investigation and planned and successfully completed remedial work, all in consultation with a variety of stakeholders and regulatory bodies. The physical abandonment of the YPL facilities was relatively straightforward. Significant issues pertain primarily to the ongoing associated remediation of historical contamination. Challenges include appropriate characterization of the site, changing environmental standards and regulatory frameworks, changes in approach to remediation of the site, and complex jurisdictional interactions. Special concerns pertain to the application of environmental risk assessment and risk management. In order for future abandonment projects to proceed efficiently and effectively, it is recommended that site characterization and risk assessment work be completed early in the process, that risk management planning also be completed as early as possible (including planning how site closure will be achieved within the applicable regulatory context), and that the abandonment process and provisions be sufficiently flexible to accommodate changing circumstances while still achieving the desired end result.