Ottawa's National Energy Board (NEB), and the Pipeline Industry Knowingly Apply Spin So As To Mislead Thousands of Alberta Landowners

When the application to transfer the Nova gas pipeline system from Alberta’s regulatory control into the hands of Ottawa’s NEB, rather than acknowledge the clear implications upon landowners, the federal regulator and the pipeline industry applied spin, and in doing so, misled thousands of landowners about the implications that the shift would have upon them.

At the time, to clarify the issue in his own mind, one Alberta MP wrote to CAEPLA and to CEPA (Canadian Energy Pipeline Association) asking for answers to a number of very specific questions. CEPA is the big pipeline lobby group that represents the big pipeline companies in Canada. The answers the MP received are below.

CEPA's response is first, followed by CAEPLA’s comments.

The Impact of the NOVA Jurisdictional Shift Upon Landowners

1. Are there changes to crossing restrictions for landowners?
   
2. Will landowners be held liable for accidental damage to pipelines?
   
3. Will there be any changes to landowner compensation?
   
4. Will landowners be liable for abandoned pipelines if the pipeline undergoes a jurisdictional shift?
   
5. What about costs associated with any legal burden?
   
6. Is the control zone wider or different under federal regulation? What does this mean if my neighbor has a pipeline adjacent to my property?
   
7. Are there other federally regulated pipelines in Alberta?

Crossing Restrictions

MP’s Question: Are there changes to crossing restrictions for landowners?

CEPA Answer: Under both the provincial and federal regulation, normal farming practices, to a depth of 30 cm, over the entire pipeline right of way are permitted. (The 30 cm depth restriction is a federal regulation.)

For crossings other than normal farming equipment, (e.g. construction equipment or a drilling rig), it has always been the case that permissions are required. Under federal regulation, a response is required within ten working days (as opposed to twenty one under the provincial regulation.)
It is important to note that the reason permissions are required is to ensure the safety of the landowner, the public, the environment and also the integrity of the pipeline.

CAEPLA Response #1: There is a vast difference between provincial and federal regulations on crossing restrictions. Alberta recognizes, in statute, the importance of agriculture and provides farmers with a significant measure of operational flexibility. The NEB Act makes no specific provision for agriculture or agricultural operations. For example, under provincial legislation, the working depth is 45 centimetres (18 inches). Under federal jurisdiction, it is only 30 centimetres, or slightly less than 12 inches.

Provincial jurisdiction specifically exempts landowners from requiring company permission before crossing buried pipelines with vehicles or farm equipment. In contrast, Section 112 of the National Energy Board Act requires that a landowner request permission of the pipeline company for ALL mobile equipment before crossing. There is no exemption for farm equipment.

Additionally, no limit has ever been established regarding how long a pipeline company can take to respond to a request for permission to cross. And, there is no defined consequence for the pipeline company when it either refuses, or neglects, to respond to such a request in a timely fashion.

CAEPLA Response #2: Absolutely there are changes to crossing restrictions! Alberta Pipeline Regulations section 66 specifically exempts landowners from requiring company permission to cross pipelines with vehicles or equipment for farming operations. Put that up against Section 112 of the National Energy Board Act, which clearly indicates that every "person" needs company permission to cross:

...no person shall operate a vehicle or mobile equipment across a pipeline unless leave is first obtained from the company or the vehicle or mobile equipment is operated within the travelled portion of a highway or public road.

With respect to cultivation practices, under Alberta rules a "ground disturbance” does not include any cultivation that does not exceed 45 centimetres (18 inches) in depth. Under the NEB Act and regulations, permission from the pipeline company must be obtained for any cultivation that exceeds 30 centimetres (roughly 11.8 inches) in depth.

If any person in the National Energy Board system wants to cultivate below 12 inches anywhere within the control zone, regulations require that consent from the pipeline company is obtained, unless that individual gets consent from the NEB.

The individual who seeks consent, is required to give three days working notice, and then the pipeline company has up to 10 working days to respond. There is, in this setup, the possibility of a delay of up to 13 working days, not including weekends. And what farmer doesn't work weekends?

There's also Section 9 of the Pipeline Crossing Regulations Part I, which provides that a company like TransCanada could prohibit cultivation of any sort for up to three working days on the entire farm, not just in the control zone. And all of these restrictions will commence the moment regulatory jurisdiction is transferred. The restrictions will apply to anyone falling within the control zone as defined by the National Energy Board Act, whether it's a landowner with a TransCanada right-of-way or a neighbouring landowner who has no TransCanada right-of-way. It's not just the thousands of agricultural landowners who have the Alberta System pipelines that will be affected; it's also their neighbours, to the extent that they fall within the control zone. And there can be substantial penalties for non-compliance with the control zone restrictions.

If a landowner happens to disagree with what TransCanada is telling them and how they're being restricted in their operations in the control zone and they don't comply with the permission requirements, then they become subject under section 49 of the Act to the National Energy Board's inspection. And non-cooperation with the inspection or non-compliance with inspection orders can result, on indictment, in fines of up to $1 million or imprisonment for up to five years. And, of course, this is a federal Act, so we're dealing with Criminal Code charges when it comes to prosecution.

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Liability

MP’s Question: Will landowners be held liable for accidental damage to a pipeline?

CEPA Answer: No. Most, (but not all), existing easement agreements protect landowners from liability for pipeline damages which may result from normal farming operations. This will not change.

However, it should be noted that it has never been the practice of CEPA member companies to hold landowners liable for accidental damage to a pipeline and we will not be changing this practice.

CAEPLA Response #1: Regulatory liability is not decided by a private citizen or by a pipeline company. Liability is based on applicable law. While some recent easement agreements may provide an indemnity for landowners, easement agreements made before 1983 do not.

It is not true that existing easement agreements protect landowners from liability that may result from normal farming practices. Given the recent decision of the Ontario Court of Appeal in CAPLA v. Enbridge and TransCanada, landowners don't know whether the words in their easement agreements have any effect in the face of new legislation and regulations designed to protect the interests of pipeline companies and their return on capital.

The NEB Act at Section 112 (2) states that we have to ask permission to cross the pipeline with mobile equipment, and the Act provides not a single exemption for normal farming practices. What it all means is that in a court of law, if a landowner does not have written permission to cross a pipeline, and that pipeline collapses or is otherwise damaged, a legitimate basis for landowner liability exists. That one or more pipeline company representatives in the midst of applying for a jurisdictional transfer is saying, "trust us on this one, we know what the law says but we would never go there," is hardly reassuring.

Some time ago, the National Energy Board requested that CEPA consult with landowners to come up with a blanket exemption for farm equipment to cross pipelines. CEPA's written response was to say that they would not fulfill the request, since it is a site specific issue.

In other words, this means if a buried pipeline is too shallow, too corroded, too old, or isn't buried deep enough, the pipeline operator can deny permission. Is this for the safety of the farmer, or is it so pipeline companies don't have to upgrade aging infrastructure?

CAEPLA Response #2: This is a situation where the pipeline operators are saying, "regardless of what the Act might say, there is no landowner liability—take our word for it!" Yet if section 112 of the Act establishes the fact that landowners are obligated to seek permission prior to crossing, how can the operators then construe the situation to declare that there will never be a consequence if and when a landowner might infringe the Act?

In its evidence presented at the Calgary hearing, TransCanada said that it permits "normal farming operations" with "normal farm equipment" over its pipelines. Our question is who decides what constitutes "normal?" And is what's normal for one farmer automatically considered normal for another? If it is TransCanada who decides; then our farming operations are at risk of being prohibited by the pipeline company. If the pipelines are safe, farmers should have a blanket permission to cross as is provided in the existing Alberta regulations. What is occurring here is that there is a duty of care, as well as an ongoing risk, that is being imposed on landowners by the pipeline companies, and that obligation exists in law regardless of the words the pipeline companies might speak.

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Compensation

MP’s Question: Will there be any changes to landowner compensation?

CEPA Answer: No. A pipeline operator is contractually bound to the payment terms of their agreement with the landowner. This obligation remains unchanged, regardless of the jurisdiction of the pipeline.

CAEPLA Response: The above statement by CEPA demonstrates why landowners on the Foothills Pipeline were able to maintain their ongoing annual payments that had been established under the Northern Pipelines Act, after the Foothills line was transferred to NEB jurisdiction.

Contrary to what certain Alberta government MLAs have been claiming, a transfer of jurisdiction will mean that for future pipelines constructed by TransCanada adjacent to existing NOVA Gas pipelines, Alberta landowners will not be eligible to receive annual payments of the sort that have been established in a recent ruling by Alberta's own Surface Rights Board. (These are perpetual and ongoing annual payments due to the ongoing impact of pipeline operations.)

Some Alberta government MLAs are telling landowners that the NEB legislation on this issue is similar to the Alberta legislation. At a casual glance, to an uninformed eye, things may appear that way, but in this case what certain MLAs think a piece of federal legislation is supposed to mean, and what a federal judge has already determined the legislation to mean, are two different things. Time and again, when it comes to ongoing annual compensation for landowners affected by NEB regulated pipelines, the federal arbitration committee that makes decisions about such things, has ruled that Alberta-style annual payments are not available under the federal rules. And the federal courts have backed this assertion, in legal cases such as Bue v. Alliance Pipelines. For information about Bue v. Alliance Pipelines see this site.

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Abandonment

MP’s Question: Will landowners be liable for abandoned pipelines if the pipeline undergoes a jurisdictional shift?

CEPA Answer: No. Regulatory approval is required regardless of the jurisdiction of the pipeline. As well, abandonment plans are negotiated between the landowner and the pipeline company. It is the intention of CEPA member companies that the burden of abandonment never falls to the landowner.

CAEPLA Response #1: The industry is absolutely not telling the truth here. Under the Alberta rules landowners have a regulatory remedy with respect of future abandonment costs and liabilities. With respect to abandonment, the Alberta Act only imposes liabilities on the pipeline companies, not on the landowner.

Under existing Ottawa-based rules, the minute a pipeline is declared as abandoned, the NEB no longer has any jurisdiction. A situation is created in which no one has liability but the landowner, who at the point of abandonment becomes the sole owner of the worn out pipes. Only the landowner is responsible for subsequent costs.

CAEPLA Response #2: Definitely yes, landowners are responsible and legally liable. Here's why: It's clear that the provisions of the Alberta legislation, which currently applies to all NOVA pipelines within its jurisdiction, provides landowners with a regulatory remedy in respect of future abandonment costs. Liabilities are only imposed on provincial licensees. This would not include TCPL if the NOVA system has been transferred to federal jurisdiction.

Whereas under the Alberta rules a company remains responsible for its pipeline after abandonment, and this obligation may be enforced by the provincial regulator, the NEB loses its jurisdiction over a pipeline once it makes an abandonment order in favour of a pipeline company——following a process in which landowners have no access to costs or funding to participate.

In other words, upon abandonment the NEB no longer has any say in the matter, and the landowner thus owns the pipeline that has been abandoned. There are no existing legal or regulatory provisions for landowner non-liability in this matter.

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Legal Burden Costs

MP's Question: What about costs associated with any legal burden?

CEPA Answer: These disputes are managed on a case by case basis between the individual pipeline company and the landowner(s), however, CEPA's [Canadian Energy Pipeline Association] member companies do not believe that landowners should be held liable for any cost associated with pipeline abandonment.

CAEPLA Response #1: If the NEB approves abandonment in place it no longer has jurisdiction. The landowner is responsible for the pipeline. Without cathodic protection or maintenance, abandoned lines will corrode and collapse. Imagine a large diameter pipeline collapsing when a farmer drives across his field with a fully loaded combine or truck.

Additionally, an abandoned pipeline will act as a water and/or contamination conduit. Perhaps CEPA members say they do not think landowners should carry liability, but under the NEB Act that is exactly what happens. If what the law says and what a pipeline company says differ, inside a courtroom the law will trump the pipeline company every single time.

CAEPLA Response #2: Under Alberta regulation, until a pipeline has been removed from the ground, the landowner will always be able to go back to the regulator in the event there is a problem with the pipeline, and recover the cost of having to do so. Under NEB regulation, once the NEB signs off on the abandonment of a pipeline, the NEB loses jurisdiction and the landowner will have no one to turn to. The NEB says landowners can always take part in abandonment hearings to decide how abandonment will take place. However, landowners under the NEB provisions must pay all their own costs of participating in these increasingly expensive, and at times complex, quasi-judicial hearings. Under Alberta rules, landowners may readily receive funding for reasonable costs, including advance funding to prepare for an upcoming hearing.

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Control Zone

MP's Question: Is the [control] zone wider or different under federal regulation? What does this mean if my neighbour has a pipeline adjacent to my property?

CEPA Answer: It is true that the NEB safety zone (federal regulation) is measured differently than the provincially regulated safety zone. The safety zone is exactly the same size in each case; 30 metres. The NEB measures it from the edge of the pipeline versus the ERCB measuring it from the centre of the pipeline. In each case however, normal farming practices are not affected by the pipeline safety zone. This zone is in effect for the safety of the landowner.

Federal regulations do stipulate that "excavating, drilling, blasting or digging deeper than 30 cm is not allowed without permission of the pipeline company to prevent accidental damage to the pipe."

This differs from the provincial regulation that cultivation can occur to a depth of 45 cm within the control or safety zone. It is important to recognize that this restriction is for the safety of the landowners/farmers. The intention is not to impact normal farming practices.

It is very important, however, for all landowners to "Call Before You Dig" to ensure the integrity of all buried facilities as well as landowner and public safety.

CAEPLA Response #1: Contrary to what CEPA has stated above, an NEB regulated control zone is measured from the edge of the easement, not from the edge of the pipe. Under provincial rules it is measured from the centre of the pipe. It means if the pipeline were in a 60-foot corridor, under provincial regulations there would be control zone restrictions on 200 feet of land (30 meters, or roughly 100 feet, on either side of the pipe). Under the NEB rules, landowners will have an additional 60 feet of restrictions. The control zone will be 260 feet wide.

(As a sidebar issue, the very existence of, or need for, a controlled safety zone demonstrates that the pipelines themselves do not have adequate cover and are not buried deep enough.)

CEPA claims that the control zone does not affect normal farming practices, but then it says there must be depth restrictions in the zone. Under Alberta provincial rules, ripping, which is a common soil conditioning method in some areas of the province, can go to 18 inches (45 centimetres). Under the NEB rules it is restricted to 11.8 inches (30 centimetres), which means that soil ripping becomes unusable, despite the fact that it is an important farming practice.

With respect to the control zone, the NEB Act provides for penalties against individuals and corporations. On a summary conviction offence alone, a landowner could face a fine of up to $100,000 and one year's imprisonment. Under the Alberta legislation, a landowner would face only a fine of up to $5,000 with no risk of imprisonment except in default of payment. Additionally, a landowner who is in violation of the NEB Crossing Regulation is subject to inspections. The inspectors are empowered to order landowner compliance, and a violation of such an order constitutes an offence that carries a fine of up to $1,000,000 and imprisonment of up to five years. The prosecution is not under the NEB Act but rather, pursuant to the Criminal Code.

CAEPLA Response #2: The control zone is an area that the operator can control, and upon which it can restrict a farmer's activities. Under the proposed Ottawa-based rules, the control zone is much wider than it is under existing Alberta law.

Contrary to what has been stated by CEPA, the federal control zone is not the same size as the provincial control zone. CEPA is right when it says that the provincial control zone is 30 meters on each side of the pipe, measured from the centre of the pipe. However, CEPA is absolutely misrepresenting the truth when it says that the federal control zone is 30 meters from the edge of the pipe. The federally regulated control zone extends 30 meters on either side of the easement.

The federal control zone is measured from the edge of the easement, not from the edge of the pipe.
The NEB control zone is so much wider that some farmers who don't even have underground gas pipelines or related surface structures are going to discover that because of the proximity of their land to a pipeline that's buried at the edge of a neighbour's field, portions of their land will suddenly come within the jurisdiction of the new control zone.

This means the neighbour will not be able to excavate, drill a posthole, or cultivate deeper than 11.8 inches without getting permission from the pipeline company. It also means the neighbour could theoretically find himself, or herself, in a spat with an NEB inspector, and the consequence for violating the order of an NEB inspector could lead to prosecution under the Criminal Code with fines of up to $1 million plus five years in prison.

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Change in Regulation

MP's Question: Are there other federally regulated pipelines in Alberta?

CEPA Answer: Yes, there are a number of federally regulated pipelines that cross through or intersect parts of Alberta.

MP's Question: Is one jurisdiction better than the other? Say provincial better than federal?

CEPA Answer: No. Both provincial and federal regulations are set up to maintain the safety and integrity of the pipeline system. CEPA member companies do not have a choice as to which jurisdiction applies to their respective pipelines. Those decisions are "facts in law" and are determined by the relevant regulatory authority, (e.g. NEB, ERCB, etc.)

CAEPLA Response: From the perspective of the landowner, provincial jurisdiction is preferred every time. The Alberta legislation has been tried and tested over a period of many decades. Landowner interests are entrenched in law. There is provision for cost recovery if a legal conflict should arise.

Crossing restrictions, loss of annual payment provisions of the kind that now exist in Alberta, and unresolved policies on abandonment costs and liabilities makes the possibility of a shift to NEB regulations thoroughly odious to landowners. Add to this the complete absence of cost recovery for landowners at NEB hearings, and it is easy to see how landowners effectively end up being shut out of the process.

It is also important to note that as this application for jurisdictional transfer has unfolded, landowners have been deliberately ignored by the Alberta government, the applicant (TCPL), and the NEB itself has overlooked its own requirements that the applicant has an obligation to consult with individual landowners.

The NEB even posted information on its website that tells half stories and ignores the implications of a jurisdictional shift. For example, the NEB has stated that the assertion put forward by landowners with regard to the possibility of $1 million fines and up to five years in prison is a false claim. It is not a false claim. It is true that under the auspices of the NEB Act, the maximum penalty is one year in prison and a fine of $100,000, but it is also true that a landowner who violates the order of an NEB inspector is subject to criminal prosecution under the provisions of the Criminal Code, and in that context could be fined up to $1 million and spend five years in prison.
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By way of an endnote, to shed light on the attitude of TransCanada Nova on this issue, it is worth noting that at the NEB hearing in Calgary, TransCanada NOVA publicly stated that as far as it was concerned landowners didn't need to know anything about the way proposed changes would affect them until “after” the jurisdictional shift has already been approved. Obviously, the federal regulator, which suffers from an acute case of regulatory capture, agreed.

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TCPL Response to CAEPLA Regarding NOVA

Recently you may have received a letter or heard a radio ad regarding an application by TransCanada PipeLines Limited (TransCanada) to have its NOVA Gas Transmission Ltd. (NGTL) pipeline system federally regulated by the National Energy Board (NEB). You may be concerned by or have questions about what you have read or heard, so we felt it was important to send this letter to give you additional information about how this possible jurisdictional change might affect you. Read more...

"Responding Directly to the TCPL/NOVA Propaganda Machine" - CAEPLA's Response to TCPL (The CAEPLA Landowner Journal Spring 2009 Edition)

Late last year, with the tacit endorsement of the Stelmach government and the Alberta Minister of Energy, NOVA Gas Transmission Limited (NGTL), which is owned by TransCanada Pipelines (TCPL), made application to transfer nearly 25,000 km of its Alberta gas pipeline system out from under the regulatory jurisdiction of Alberta, and into the hands of Ottawa's regulator - the National Energy Board (NEB). On the heels of that application, landowner groups issued a press release explaining how far-reaching the implications would be for farmers and ranchers if the NGTL application were approved. We also sent a letter to 40,000 landowners that provided details on the implications of the transfer. NGTL responded by sending letters to individual farmers that explained point-by-point, its position on the issues we raised in our letter. The NGTL letter has also been posted on the Internet. Below are quotes taken from NGTL's letter, followed by CAEPLA's response. Landowners can judge for themselves who they want to believe. Read more...

What Alberta Landowners Lost When Ottawa's National Energy Board (NEB) Moved In, and Took Over Regulatory Control of the Alberta NOVA Gas Pipeline System

The following information is taken from the transcript of the National Energy Board hearing in Calgary, which addressed the issue of regulatory control over the Alberta Nova Gas Pipeline system. Even a casual read of the information demonstrates that Ottawa’s energy regulator knew exactly what it was taking away from Alberta landowners, and inordinately imposing upon them in terms of costs, liability, and duty of care, when it ruled that its own bureaucrats, rather than the Alberta government, should regulate the NOVA gas pipeline system.

Landowner Impact — Cultivation Restrictions Imposed on Landowners/Control Zone

— "(And) the moment there is a[n NEB] Board Certificate in place for the operation of the Alberta System, each and every landowner on the system will be subject to the National Energy Board Act 30-metre control zone and whatever restrictions that might bring with it. We looked at one specific example: Cultivation.

Whereas under the Alberta Pipeline Act and Regulation, no farmer must obtain company consent for cultivation down to a depth of 45 centimetres or 18 inches, and the Alberta Act specifically exempts that cultivation from being considered a ground disturbance. Under the National Energy Board Act Regime those same landowners would have to seek permission every time they wanted to cultivate below 30 centimetres or 12 inches, anywhere on the right-of-way -- anywhere on the right-of-way which could be, according to TransCanada's evidence, anywhere from 15 metres wide to over 30 metres wide and on an additional 30 metres on each side of the right-of-way."

— "And I used the example of cultivation with the panel because it's a fundamental component of farming -- cultivation -- but the National Energy Board Act control zone covers other operations as well, like simple excavations and construction, and to some extent so does the Alberta Regulation. But it's also important to remember that the Alberta Regulation measures the Alberta control zone from the centreline of the pipe rather than from the edge of the right-of- way, as does the National Energy Board system. And the reference for that is section 1(3) in the Alberta Pipeline Regulation. And that in itself can result in a significant increase in the amount of land on which activities are being restricted as a result of the presence of the pipeline. In the example that I discussed with the witness panel, a single pipe in a 20-metre wide easement, the increase in the controlled area under the NEB Act system as opposed to the Alberta Regulation would be 20 metres or an increase of 50 percent of the land outside the right-of-way that would be subject to restriction. And if the right-of-way were 30 metres wide, as it is in some cases in the Alberta System, the increase would be even greater."

— "If landowners in the National Energy Board system want to cultivate below 12 inches in the control zone, Part I of the Pipeline Crossing Regulations, section 6(b) says they need consent from the company, unless they get consent from the Board. Consent from the company, Section 6(1) of Part I requires that the landowner give three days working notice, and Part II, Section 6(1) provides that the company has up to 10 working days for the company to respond. There is, in this setup, the possibility of a delay of up to 13 working days, not including weekends – and I think that everyone can agree that farmers don't stop working on weekends because weather certainly doesn't allow them to stop working on weekends – and up to 13 working days of delay before they could undertake cultivation of a certain type or before other activities restricted by the regulations. And there's also Section 9 of the Pipeline Crossing Regulations Part I, that provides that a company like TransCanada could prohibit cultivation of any sort for up to three working days on the entire farm, not just in the control zone. And all of these restrictions will commence the moment TransCanada has a certificate to operate. The restrictions will apply to anyone falling within the 30-metre National Energy Board Act control zone, whether it's a landowner with a TransCanada right-of- way or a neighbouring landowner who has no TransCanada right-of-way. It's not just the thousands of agricultural landowners who have the Alberta System pipelines, it's also their neighbours, to the extent that they fall within the control zone."

"And there can be pretty substantial penalties for non-compliance with the control zone restrictions. The reference is section 51.1 in the National Energy Board Act. If a landowner happens to disagree with what TransCanada is telling them and how they're being restricted in their operations in the control zone and they don't comply with the permission requirements, then they become subject under section 49 of the Act to the National Energy Board's inspection. And noncooperation with the inspection or non-compliance with inspection orders can result, on indictment, in fines of up to $1 million or imprisonment for up to five years. And, of course, this is a federal Act, so we're dealing with Criminal Code charges when it comes to prosecution."

— “In order to mitigate these prejudices that will result from the transfer of jurisdiction, we submit that TransCanada should be required before a certificate is granted to carry out a detailed analysis of the changes in land use restrictions to result from the transfer, and to address the concerns of landowners and commit to mitigation measures. And if the Board is not prepared to impose that condition on TransCanada, then we would ask simply that it impose Draft Condition 4(b) from our proposed conditions at Exhibit C-l-lOc that TransCanada shall grant permission to Alberta System landowners to cultivate over the Alberta System pipelines to a depth of 45 centimetres, the same thing they're permitted to do now under the Alberta Regulations.”

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Landowner Impact — Crossing Restrictions

— "We also talked about restrictions on crossing the pipeline with farm equipment. That simply doesn't exist in the Alberta Regulations. Albert Pipeline Regulations section 66 specifically exempts landowners from requiring company permission to cross pipelines with vehicles or equipment for farming operations. Contrast that with section 112(2) of the National Energy Board Act. It's clear landowners need company permission and this is different, I would submit, from the cultivation permission. It's different in that the Act and the Pipeline Crossing Regulations don't provide that the landowner in the alternative can go to the Board for permission.”

— "So there is no limitation on how long a company may take to respond to a landowner request for permission to cross its pipeline with farm equipment under the National Energy Board Act scenario. These are significant changes for farmers who to date have operated in a regulatory system that required no permission to drive their farm equipment over the pipelines for farming operations. Having to ask permission to cross a pipeline could result in operational delay of what could be an indeterminate period."

— "In order to mitigate this prejudice that will result from the transfer of jurisdiction, we submit that TransCanada should be required, before a certificate is granted, to carry out a detailed analysis of the changes in land use restrictions to result from the transfer and to address the concerns of landowners and commit to mitigation measures. And again, if the Board is of the view that the Certificate should be granted and it would decline to order a condition requiring consultation before the decision of the type that I've just suggested, then we would simply ask that the Board impose Condition 4(a) from our proposed conditions at Exhibit C-1- lOc:

'That TransCanada shall grant permission to Alberta System landowners to cross Alberta System pipelines on their respective properties with vehicles or equipment used for farming purposes.' (As read)

That's the landowners' situation under provincial regulation today. And Mr. Kendel told me at paragraph 2360 in Transcript Volume 7 that: “TransCanada's J practice is, and the fact, that with farming operations we haven't required that permission has to be granted.”

“So if it's TransCanada's practice anyway, then we submit that the Board should impose the condition we have proposed. It will provide landowners with certainty about what they can and cannot do on their farms. It will also address with certainty the fact that the NEB Act restrictions, the control zone and the permission requirement for crossing with equipment, the possible penalties -- all of those restrictions apply immediately when a certificate becomes operative. They apply to every single landowner in the system, whether or not she or he knows about it; whether or not she or he actually received the notice that TransCanada now says it's going to send; whether or not she or he actually understands what's going on."

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Landowner Impact — Depth of Cover

— "And the program by which insufficient depth of cover might be found is one where outside parties bring TransCanada's attention to the situation; in other words, this is a reactive program, not a proactive program. And I was at pains to have Mr. Kendel acknowledge that TransCanada doesn't know whether any of the Alberta System pipelines were installed at a depth of less than .6 metres originally... My point is TransCanada doesn't appear to know what the starting point is. There's going to be operation of this Alberta System under this Application going forward from a date when the certificate is granted and becomes effective, if it's granted. As far as depth of cover goes over the pipelines, except in those locations where someone has brought TransCanada's attention to insufficient depth of cover, landowners don't know what they're dealing with."

— "The Board imposed depth of cover monitoring program as a condition in the Enbridge Alberta's Clipper certificate. That was for a new pipeline construction. The Board in that case was advised by Enbridge and knew what the starting point was for depth of cover... The Board knew that it was being installed at .9 metres, which is more than sufficient, and yet the Board still imposed a condition on Enbridge that it-create a depth of cover monitoring program and it ensure that landowners know what the depth of cover on their properties are, and that if there are problems found that they be mitigated, in consultation with landowners going forward. Frankly, the more information that landowners have about the pipelines on their properties the better. Safety requires information and landowners in the Alberta System deserve the same information and the same safety that landowners along the Alberta Clipper Pipeline have been given by the Board. "

— "Proposed Condition 3 from [CAEPLA] is again from the Enbridge Alberta Clipper Project. It was a commitment by Enbridge that is now a condition of its certificate that ensures that it mitigates the effects of insufficient depth of cover. We submit that that should be included as a condition going forward as the operation -- of the operation of the Alberta System. Proposed conditions 4(c) and 4(d), these are to provide landowners with certainty about what TransCanada will do to mitigate impacts of any restriction it places on the use of equipment near its pipelines, on the right-of-way, or in the control zone, and requires the specification, in writing, of any restriction that there's going to be put on land use. It's about certainty and a written commitment to landowners that's enforceable by the National Energy Board.”

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Landowner Impact — Maintenance and Integrity Digs

— “Proposed Condition 5 relates to integrity and maintenance digs. There's ample evidence in the record that integrity digs are something that are a fairly common occurrence on the Alberta System. There have been incidents, as set out in Exhibit B-19, TransCanada's Response to NEB IR 3.2. We reviewed the Transportation Safety Board Report, P-9-4-H-0003, which refers to a 1991 integrity problem on a NOVA pipeline. We saw that there can be problems with a certain type of pipe coating -- polyethylene tape - and disbondment of that tape and the external corrosion of pipes. And that was a pipe coating that was used widely on the Alberta System, as shown at Exhibit B-4 k, Adobe pages 240 to 268, TransCanada's Listing of Pipe Coatings in the System. And TransCanada has an integrity management system in place and we certainly don't take issue with there being a program in place to ensure safety. But that program will inevitably require entry onto the properties of landowners, investigative and maintenance digs, and interference with farming operations.”

— "Proposed Condition 5 is a proposal for a written integrity and maintenance dig procedure to be put in place for the Alberta System to guarantee to landowners certain minimum standards for integrity digs; minimum standards enjoyed by landowners on the Enbridge Alberta Clipper Pipeline; minimum notice requirements; written documentation regarding the dig areas; written commitments regarding topsoil stripping and other aspects of the operation."

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Landowner Impact — Costs

— "TransCanada wants the Board to keep its hands off its operations. It does not want landowner-related conditions on the Certificate to operate the Alberta System and that, I submit, leaves landowners at risk. Certainly landowners can still come to the Board for assistance. They can participate in Board processes, they can go to hearings, they can intervene, they can respond to right-of-entry applications that TransCanada may make. But, as we've seen, they do so at their own expense."

— "They lose -- in this Application they lose their right to seek costs of regulatory proceedings; something that is part of the Alberta regulatory system and, I would submit, a major part of landowner concern resolution in Alberta but it's not a part of the NEB system. That fact, I submit, should weigh heavily in the Board's consideration of the conditions we've proposed. TransCanada is asking to remove 23,500 kilometres of pipeline landowners from a system where they can participate in proceedings with a right to seek costs, and place them in a system that has no availability of costs, save in a detailed route hearing.”

— "Jim Ness, in his Written Evidence Statement, Exhibit C-I-5b, explains why we submit it's important for the Board to deal with these landowner concerns now. After the certificate is granted, landowners will have no right to costs or funding if it is necessary to go back to the NEB to complain if or when TransCanada fails to address landowner concerns appropriately. That's why [CAEPLA is] involved in this proceeding. TransCanada and the Board should be dealing with landowner concerns now and to do so, we submit, would be in the public interest.”

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Landowner Impact — Abandonment Liabilities and Costs

— "There will be additional pipelines in the future. These landowners will be subjected to additional pipeline construction and operation in the future, and similarly, at that reference TCPL also acknowledges that eventually all of the existing and new pipelines will be abandoned."

— "So the result of a transfer of jurisdiction for the NOVA landowners with respect to their increased risk of exposure to abandonment costs and liabilities is that they are left in a regulatory vacuum without a regulatory remedy to address future abandonment liabilities and costs. On the basis of the Board's decision in Manitoba, and as reflected in the current Filing Manual requirements on abandonment applications, the Board is without jurisdiction. There is no applicable provincial legislation to address this jurisdiction void. It's clear that the provisions of the Alberta Pipeline Act and Regulations, which currently apply to the NOVA pipelines within its jurisdiction and provide the landowners with a regulatory remedy in respect of future abandonment costs and liabilities only impose liabilities, as we saw, on provincial licensees. That is the reference in both the Act and the Regulation. That would not include, then, TCPL if the pipeline has been transferred to the federal jurisdiction and it was operated by the TCPL in the federal jurisdiction under a CPCN issued by this Board."

— " ...those are the technical issues which create this realistic (concern) of future costs and liabilities: the corrosion, collapse of the pipe, the creation of water conduits and the soil contamination. So that evidence clearly establishes, then, that this concern of the landowners with respect to their future exposure to increased risk resulting from the jurisdiction transfer and loss of a regulatory remedy is a real and substantial concern, which has significant environmental and socioeconomic effects for them."

— "If those same provisions, as included in the Enbridge agreement and in the Enbridge Certificates of Public Convenience and Necessity, were included by the Board in any Certificate of Public Convenience and Necessity issued to TCPL with respect to its Alberta System as proposed in [CAEPLA's] proposed conditions, while the landowners would still have to be concerned about the loss of their regulatory remedy to address future abandonment liabilities and costs, at least they would have some assurance under Condition 6... that in the event of an assignment there would be a party, either the assignee or Enbridge itself, continuing to be available in the event of post-abandonment costs and liabilities—either Enbridge or a party of equivalent financial strength. And under Condition 7 then you'll find the same provision we just looked at in the Enbridge agreement. So a condition similar to the condition in the Enbridge certificates, that TCPL would not surrender the easement, could not surrender the easement and its contractual obligations without first removing the pipe, and until then it would have to continue maintaining the pipe unless the landowners consented otherwise. And TCPL at Questions 1621 and 1639 have acknowledged that those provisions would provide some measure of security for landowners being subjected to this proposed jurisdiction transfer. And then also Condition 8 you will see there is simply a continuation of the liability TCPL currently has under the provincial regulatory system which it would no longer have under the federal system with respect to future costs and liabilities. So the purpose of Condition 8 is simply to continue TCPL' s current post abandonment liability under the provincial regulatory system so that landowners aren't prejudiced to that extent upon the transfer of the system to the federal jurisdiction."

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Landowner Impact — Loss of Annual Payments to Landowners

— "So in essence, the difference that is being noted by the Federal Court in this decision with respect to compensation available to landowners under provincial and federal regime, is that provincially, under the NOVA-type arrangement, landowners are entitled to an initial lump sum payment upon the granting of an easement and then an annual payment thereafter, equivalent to 20 percent of the land value which is reviewable every five years. That's to be contrasted to this more restricted option available under the federal jurisdiction where essentially the option is really only the market value of the land, in a lump sum, or the market value of the land divided up into a fixed number of annual payments over an agreed number of years. And what landowners lose then and what the company gains is the appreciating -- any appreciation in the value of the land. And the landowner loses continuing compensation for the ongoing type of impacts of TCPL' s operations on their agricultural operations.”

— "The necessity of an annual payment to address these types of ongoing recurring losses of pipeline landowners was recognized by the Alberta Surface Rights Board, recently, in a decision that you'll find in the Reference Documents at Tab 20(d), which is a decision of the Surface Rights Board with respect to the Enbridge Wapisu Pipeline. This was a compensation arbitration on this provincially regulated pipeline under the provisions of the Alberta Surface Rights Act. At page 19, in the first paragraph, under Reasons for Decision, the Board says:

'The role of the Board is to consider the evidence in the Act and to arrive at a fair and reasonable award of compensation that comes as close as possible to making the landowners whole. The Board is persuaded that there will be ongoing and/or recurring compensable losses in this case. Once the Board made this determination, it is only reasonable to award annual compensation since only an annual award provides for compensation that is contemporaneous with the events factors that are attracting the award of compensation. ' (As read).

— “And with respect to these ongoing recurring types of compensable loss, you'll see at page 20, in Table 1, the Board has categorized, in Table I, under Category A: ‘The long-term effects of pipeline operations which should be compensated through an annual payment.’ (As read). So for example, you'll see in 2, deals with the loss of trees; in 6 it deals with land use limitations, the restrictions on construction of livestock and other agricultural facilities; and 9 makes reference to the restriction of cultivation depth to 18 inches and the restriction that that places on cultivation practices in planting of new crops.”

“And here, of course, on the transfer, from the provincial to the federal jurisdiction you have an even greater restriction down to 12 inches under the federal jurisdiction. In number 14, the restriction on agricultural activities which results from even the Call First requirements, under the provincial legislation, and again here, you have even a more onerous, the (notice) and consent requirements under the NEB Act and Regs, not only with respect to excavation but even to cross the pipeline. And in 16, there is the reference to the creation of hot strips which interfere with the free thaw cycle. In 19; safety issues and related ongoing concerns and fears; interference with GPS data which provides the basis for fertilizer application and crop protection; and 21, loss of the opportunity to grow higher value, identity preserved or specialty crops."

— "So the Board then summarizes these ongoing losses which necessitate an annual form of compensation at page 23, in the paragraph immediately below that chart, where the Board says: 'Based on the evidence and arguments presented in this case, the Board cannot accept that there will be zero ongoing and/or recurring loss. The Board is persuaded that there will be ongoing and/or recurring loss if you use adverse effect, nuisance and inconvenience that will accompany this pipeline. Items characterized as (a) above were accorded weight when arriving at an award of compensation. The Board will highlight three specific nuisances, inconveniences that were identified in Table 1 and/or in other evidence or arguments heard

• The Board is persuaded that the landowners will have to alter and adapt their agronomic practices on an ongoing basis because of the presence of the pipeline. The landowners will have to consider the effect of the pipeline every year at seeding time.
• The Board is persuaded that the landowners dare not ever forget about the presence of this pipeline; they would do so at their peril. To forget could lead to catastrophic results. Out-of-sight is not out-of-mind; the Board is persuaded that, if the landowners cannot forget about the pipeline, it must be considered an ongoing nuisance or inconvenience.
  
• The Board notes from the Land Title Certificates that Enbridge has registered caveats on all their respective land title Certificates to register interest. This, by itself will be an ongoing nuisance and inconvenience to landowners when they try to enter into future agreements/contracts.
  

"The Board is persuaded that there will be ongoing nuisance and inconvenience to the landowners as a result of the Wapisu Pipeline Project and, therefore, necessitating an annual form of compensation." (As read)

— "Those losses, Madam Chairman, are not unique to Wapisu but are common to all pipeline landowners, including the pipeline landowners on the TransCanada System and many of those same impacts are addressed in [CAEPLA’s} pre-filed evidence... So what we have is something over threequarters of the agreements with landowners entered into on the Alberta System since 1983. The landowners have chosen to receive annual payments reviewable every five years to address the increasing value of their lands and these types of ongoing recurring losses. But if we look at TCPL' s response to [CAEPLA] IR ll(e) and (f), no such payment option has been made available by TCPL on its federally regulated Mainline system."

— "So, if the Alberta System is to be transferred to and operate under the federal jurisdiction, for these NOVA landowners to have the same rights as other federally regulated landowners, my submission is that the NEB should impose, by certificate condition, the same minimum requirement as 86 (2) (e) of the NEB Act and require that TCPL obtain written landowner consent for the construction of future pipelines. That again is in the proposed conditions of [CAEPLA’s], Exhibit C-l-l O(c) at Proposed Condition 9. Secondly, for NOVA landowners to continue to have the same option as they currently have under the provincial jurisdiction to receive both a lump sum and a reviewable annual payment on future pipeline, which isn't available to them under the NEB Act, my submission is the Board should impose by certificate condition the requirement that TCPL make available to landowners in respect of all future pipelines the same option to receive compensation as they currently have under Schedule "A" of the standard-form right-of-way agreement, which is attachment -- Attachment 2 to TCPL's Response to [CAEPLA’s] IR Number 4(a). And in the Proposed Conditions, it's Proposed Condition 10, and the Schedule "A" attached to the Proposed Conditions is simply a copy of the current Schedule "A" in TransCanada's Annual Payment Agreement in the provincial jurisdiction."

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Landowner Impact — Consultation/Assessment/Mitigation

— "In its Application, TCPL has recognized that to obtain issue of a Certificate of Public Convenience and Necessity requires what it's referred to as two primary determinations by the Board. The first is that the Alberta System is properly within the federal jurisdiction; and secondly, as to whether TCPL has satisfied the requirements of section 52 that the Alberta System is required by present and future convenience and necessity. At question 861 in the transcript, TCPL has acknowledged fairly that these are two quite separate and distinct determinations. In making the second determination, section 52 is quite clear that the Board must have regard to all relevant considerations, which may include, under section 52, any public interest that in the Board's opinion may be affected by the granting or refusing of the certificate."

— "In addition to the Board's specific Filing Guidance Direction on this Application requiring that TCPL address how their current management systems and programs would meet the federal requirements to deal with these environmental and socioeconomic issues and to provide landowners with appropriate notice of how their interests might be affected, and their right to participate in this proceeding - in addition to that Filing Guidance Direction, in my submission, the Board's own Filing Manual Requirements also impose on TCPL, through both the filing requirements and the Guidance in that document—impose an obligation to consult with landowners to identify such potential effects before bringing the Application, and to work in cooperation with landowners to mitigate these effects as part of the planning process."

— "So TCPL has not identified and assessed the potential effects on landowners related to the transfer of the Alberta System from the provincial to the federal jurisdiction. It has not undertaken the consultation described by the Board as crucial to the identification of those effects. It has certainly not provided the more detailed information required under Table A-3 with respect to those outstanding concerns identified, or in fact any information with respect to those outstanding concerns. That was not part of TCPL's planning of this Application and it has not developed or proposed any mitigation with respect to those concerns."

— "Based on that, my submission to you is that there's no evidence in the record before you, upon which you, as a Board, can conclude that this proposed jurisdictional transfer will not have significant environmental and socioeconomic impacts on landowners' interests."

— "So, Madam Chair, [CAEPLA is] requesting that TCPL's Application for a Certificate of Public Convenience and Necessity under section 52 be dismissed in consequence of TCPL's failure to comply with the Board's Filing Guidance direction in this case and the Filing Manual requirements and guidance with respect to identification and assessment of the environmental and socioeconomic effects of the proposed jurisdictional transfer on landowners. However, in the alternative, should this Board nevertheless determine that a Certificate of Public Convenience and Necessity should issue with respect to TCPL's Alberta System, [CAEPLA is] requesting that the Board impose conditions on any such certificate to mitigate, at least in part, the environmental and socioeconomic effects addressed in [CAEPLA’s] pre-filed evidence."

— "In the LMCI, [CAEPLA] has consistently maintained the position that this industry must change its perception of landowners as simply being impediments to their projects and come to recognize landowners as stakeholders with interests that are as important and worthy of recognition as customers and shareholders. My submission: That is a change which will only happen if a clear message is sent by this Board to TCPL and any other so inclined industry Applicants that Applicants will not be permitted to simply ignore the requirements of CEAA, the Board's Filing Manual Requirements and the Board's Filing Guidance, and that to do so is at their peril.”

— "My submission to you is that the time for change is now. Should the Board determine to issue this certificate nonetheless, despite the failures in consultation, et cetera, this Board, on this Application, can direct the changes that are required to reduce, at least, the impact of this jurisdictional change on thousands of landowners in Alberta and we are requesting that the Board proceed accordingly with that direction."

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Affidavit Detailing Landowner Harm Due to NOVA jurisdictional Shift

...I am...a landowner directly affected by the TransCanada application... Read more...