3rd edition
Authors:	Duncan Kenyon, Nikki Way, Andrew Read, Barend Dronkers, Benjamin Israel, Binnu Jeyakumar, Nina Lothian
Publisher:	Pembina Institute
Publish Date:	October 2016
PDF Download:	[Landowners' Guide]              [Landowners' Primer]
Initiation Phase
Exploration Phase
Development Phase
Pipelines and Other Infrastructure               Pipelines and Emergency Response               Pipelines Regulated by AER               Questions Before Signing a Pipeline Agreement               Oil Batteries and Gas Compressor Plants               Gas Plant Risks and Questions Regarding                Other Infrastructure
Environmental Impacts
Abandonment and Reclamation
Compensation, Rights, and Hearings
Appendices

Pipelines Regulated by the Alberta Energy Regulator

The AER regulates all oil and gas pipelines that link wells to facilities in Alberta, in accordance with the Pipeline Act, Pipeline Regulation and applicable CSA standards. Over half of all pipelines in Alberta are regulated by the AER; the remainder are utility pipes and those regulated by the NEB.

There are a number of aspects of pipeline project development that are important for landowners to understand, including selecting a route through good consultation, ensuring proper pipeline setbacks, and understanding environmental impacts. This section outlines how to resolve known issues and how to be prepared in case of an emergency.

Route selection

The first step in constructing a pipeline is for the company to survey the proposed route (see Surveying). Before a company can apply to the AER for a permit to construct a pipeline the company will send a land agent to landowners and occupants to discuss the proposed route and ask them for input, such as the terms to access land. Once the route has been decided, the landowner and occupant are asked to enter into a negotiation to sign a right-of-way agreement (or pipeline easement). The agreement should list all the things the company must do when constructing, operating and eventually reclaiming the pipeline. Once the agreement is signed, a caveat is created on the landowner’s land title, specific to the pipeline. For more information consult the AER Directive 056: Energy Development Applications and Schedules, which includes a full list of technical and public involvement requirements for pipelines, similar to that for wells. The licence to construct a pipeline expires if no work has begun within a year of its issue.

In selecting the pipeline route, the surveyor must provide reasonable notice to the landowner when accessing their land. While the Surveys Act and Surface Rights Act allow access, they also place responsibility for damages with the surveyor. For pipelines, like wells, the company must obtain consent for right of entry from both the landowner and the occupant.

Objecting to the pipeline route

If you do not like the exact location of the proposed pipeline, you can object and/or suggest an alternative route. If you and the company are unable to negotiate a satisfactory location for the pipeline or if you disagree on other issues relating to the construction of the line, the procedure for pipelines is similar to that for wells: either party can request mediation or facilitation by AER Alternative Dispute Resolution (ADR) staff, or by a member of the third-party mediator roster (see Working with the Alberta Energy Regulator). If it is still impossible to reach agreement, the pipeline company must file a non-routine application, telling the AER about the outstanding issues. The application process, routine and non-routine, is outlined in Directive 056. At this time, the company can also request an AER hearing. As a landowner, it is a good idea to inform the AER in writing of your concerns, so they can be considered when reviewing the application. Informing the AER in writing is considered a statement of concern, which should be sent to both the AER and to the pipeline company. Even when the company has filed its application, you and the company will usually continue with the appropriate dispute resolution process.

A hearing on a disputed pipeline application can be slow and expensive for a company, so they will usually try to resolve issues directly with the landowner before the hearing date. The hearing process is summarized in Public Hearings and Regulatory Board Processes. For detailed information on the participant involvement process, see Directive 029: Energy and Utility Development Applications and the Hearing Process.

The AER can reject the company’s application or grant the permit with or without conditions. The AER rarely rejects an application due to environmental issues, but may include conditions that reflect a landowner’s concerns. If the AER gives the company a permit and you have not reached agreement with the company, the company will then apply to the Surface Rights Board for a right-of-entry order. The Surface Rights Board will usually grant the right of entry and determine the amount of compensation that the company must pay you as the landowner or occupant (see Compensation for Pipelines).

Before the Project Starts deals with negotiations and appropriate dispute resolution.

Remember that the AER only deals with issues relating to the pipeline itself; compensation is handled by the Surface Rights Board (see Compensation for Pipelines and Regulatory Appeals for AER Decisions Made Without a Hearing).

Issues to consider

Things to consider in the negotiation process of selecting a pipeline route include pipeline location and setback distances, the depth and number of buried pipes, implications for topsoil removal, and specific requirements for pipe abandonment and reclamation of land at the end of project life. Compensation for pipelines, unlike for wells, is based on one-time payments that may include compensation for hiring legal assistance for the negotiation.

The company must advise you about the type and size of the pipeline and its operating pressure. It is a good idea to inquire about the proximity and spacing of shut-off valves, and the location of tie-ins, compressor stations or pumping stations. You may also want to inquire about future plans if more oil or gas is developed upstream: ask whether the company might increase the pressure in the line by putting in more compressors, or lay a new pipeline parallel to the initial line.

Where topography and soil conditions are suitable, small-diameter plastic pipelines (often less than 10 cm but up to 15 cm in diameter) can be installed by plough-in operations, instead of the traditional trenching. This reduces the surface disturbance. Ploughed-in pipelines are given special regulatory treatment, including exemption from the requirement to obtain a reclamation certificate. AER regulation still requires pipeline companies to follow strict requirements regarding end-of-life activities, regardless of pipeline installation method. In 2001, Alberta Environment identified some concerns with ploughed-in pipeline construction and emphasized that the work must be carried out using the right equipment under the right environmental conditions. The most suitable pipeline construction method will depend on timing and soil conditions.

In-depth technical requirements for pipelines are detailed in Directive 056, including setback distances, leak detection, and emergency response plan requirements. The directive also covers discontinuation, abandonment and removal of pipe.

Other unique requirements exist for steam distribution pipelines, which are regulated by the Pipeline Regulation (under authority of the Pipeline Act) and governed by the Alberta Boiler Safety Authority (ABSA).

Also, the company will always need access to its pipeline when flowing. This working area must be defined through the landowner and company negotiations. You may want to include specific requirements in the pipeline agreement, or create a separate agreement with the company.

Setbacks

When reviewing the proposed route for the pipeline, consider whether the pipeline might affect future plans you have for the land, such as the location of new farm buildings or plans for subdivision. Depending on what is flowing through the pipeline, the setback may be wider than the right-of-way, which could constrain options for future land developments. Even if the pipeline is constructed to carry sweet gas, it may later be approved to carry sour gas, which could result in greater setback distances for buildings.

A setback is the minimum distance that must be maintained between an energy facility and various surface developments for land use and public safety purposes.

Setback distances from the pipeline depend on the level of hydrogen sulphide (H₂S) gas contained in the flowing natural gas or oil effluent. Table 5.5 in Directive 056 summarizes minimum distances from the pipeline to permanent dwellings, unrestricted country developments, urban centres and public facilities. The higher the level of H₂S gas, the higher the minimum distance required. Since 2005, Directive 026 requires the same setback rules to be applied for oil effluent pipelines, which can potentially release sour gas that is contained in the oil. For both natural gas and oil effluent, the regulated threshold to apply the minimum setbacks distance is at least 10 mol of H₂S per 1 kmol of natural gas. Below this threshold gas is considered “sweet”, as opposed to “sour”.

Sweet gas or oil — The required pipeline setback distance is the width of its right-of-way. However, there are special requirements for high vapour pressure lines, including the provision of an emergency preparedness plan.

Sour gas or oil — The setback distances depend on the volume of sour gas that would be released if the pipeline ruptured, as indicated in Table 4. To calculate the volume, engineers account for the distance between shutoff valves and diameter of the pipe. The minimum setback distance from a permanent dwelling is 100 metres, applied to Level 1 sour gas pipelines; other developments require larger setbacks.

Table 4. Setback requirements for sour gas facilities

Level of facility	H2S volume (m3)	Minimum distance
1	<300	At least 100 m to a pipeline right-of-way
2	300–2,000	At least 100 m to individual permanent dwellings and unrestricted country development. At least 500 m to urban centres or public facilities
3	2,000–6,000	At least 100 m to individual permanent dwellings up to 8 dwellings per quarter section At least 500 m to unrestricted country developments At least 1.5 km to urban centres or public facilities
4	>6,000	As specified by the AER, but not less than Level 3

Source: This table is based on information in AER Directive 056: Energy Development Applications and Schedules, Tables 5.5, 6.3 and 7.5. The reader should refer to these tables for full details.

Environmental issues

Since 2014, environmental impacts from pipelines are regulated by the AER; guidelines for pipeline development have been outlined by Alberta Environment and Parks. Adherence to and consideration for the guidelines are particularly important for Class II pipelines, which are not bound by a formal review process.

Read Environmental Protection Guidelines for Pipelines before signing a lease agreement.

Class I pipelines — those that are relatively long and/or large, and not regulated by the NEB — must be approved by the AER and meet any specific conditions in this approval in addition to those in the guidelines. However, both Class I and II pipelines must follow the same environmental protection guidelines. The guidelines point out the importance of identifying potential environmental concerns through pre-construction site assessments and pre-planning, taking precautions to minimize the amount of remedial work after construction, and proper operations and maintenance activities, including hydrostatic testing of old and new pipelines.

You may need to discuss or negotiate one or more of the following concerns with the land agent, making sure to include provisions in the pipeline agreement:

Pipeline route selection

• minimize right of way requirements by considering existing/future pipelines
• avoid forested areas, areas with environmentally sensitivities and high wildlife value, and archeological or historic sites
• if tree stumps will need to be removed from the entire width of the right-of-way, this must be negotiated

Scheduling and timing

• avoid weather that could contaminate/move soils
• if reclamation does not immediately follow construction, timing of backfill, topsoil replacement and revegetation efforts will need to consider factors such as access to fields for spring seeding, weed control, livestock movement in presence of temporary right-of-way fencing, and erosion monitoring and prevention
• consult with Alberta Fish and Wildlife about constraints they may have to protect wildlife

Construction

• follow environmental guidelines for clearing the pipeline right-of-way and salvaging the topsoil, to be replaced when backfilling the pipeline with minimal loss; practices should minimize soil disturbance
• when backfilling, ensure adequate compaction of backfill material to prevent soil slumping and erosion
• when grading, ensure that results do not cause increased erosion, slope instability and sedimentation, which would reduce success of reclamation
• consult the guide for specific requirements on water crossings
• the company should document and remediate all contamination, following up construction with soil sampling

The above requirements are high-level, but the guidelines also have very specific requirements — for example, consideration for removal of any tree stumps, rocks or other debris from the right-of-way; the reseeding of the surface with appropriate seed (e.g., native grasses); the location of any above-ground structure associated with the pipeline; and the minimum depth at which a pipeline is buried (with respect to deep surface operations).

Monitoring

When the pipeline is operating, the company is responsible for monitoring leaks and spills. You may want to ensure that the company notifies you of any leak or break that occurs in the pipeline, and tells you how they are repairing the damage and cleaning up.

You may also want to find out how the company will monitor for corrosion, which can cause leaks or other pipeline failures. Ask if the pipeline route will be inspected by air or land and how often the pipeline itself will be checked internally. You should inquire if the pipeline will be cathodically protected (which means that a low-voltage current is passed through it) to reduce the risk of corrosion. If the substance being transported in the pipeline changes, corrosion control needs to be re-evaluated by the company.

You will also want to know if the temperature of material in the pipeline will affect the temperature of surface soil, since warmer soil above the pipeline can cause the crops to ripen at different times than the rest of the field, which makes harvesting difficult.

A number of other environmental issues that should be considered when negotiating with a company are identified by questions in the next section.

Pipeline failures are discussed in Pipelines. Leaks of oil or saline water may contaminate soil and affect vegetation. While much of the spilled hydrocarbon and saline water can be contained and removed quickly, the affected sites can take years to completely recover.

ᐸ   Previous   Next   ᐳ