NEB approves line 9B project with conditions

CALGARY, March 6, 2014 /CNW/ - The National Energy Board today released its Reasons for Decision for the Line 9B Reversal and Line 9 Capacity Expansion Project (Project) application submitted by Enbridge Pipelines Inc. (Enbridge).  The Board has approved the Project with conditions, but denied Enbridge's request for exemption from leave to open requirements.

The Board's decision enables Enbridge to react to market forces and provide benefits to Canadians, while at the same time implementing the Project in a safe and environmentally sensitive manner.

In its application, Enbridge requested approval from the Board to reverse the direction of flow on a 639 kilometer segment of pipeline located between North Westover, Ontario and Montreal, Quebec, as well as approval to increase the overall capacity from 240,000 to 300,000 barrels per day of the Line 9 pipeline from Sarnia to Montreal.  Enbridge also requested a revision to its Line 9 Rules and Regulations Tariff to allow for the transportation of heavy crude oil.

As a result of the Board's decision, Enbridge will be permitted to operate all of Line 9 in an eastward direction in order to transport crude oil from western Canada and the U.S. Bakken region to refineries in Ontario and Quebec.

Previously in a 27 July 2012 decision the Board approved the reversal of the western portion of Line 9, a 194 kilometer segment linking Sarnia to North Westover, Ontario.

During the Board's hearing process it heard concerns from Participants regarding pipeline integrity, spills and emergency response, and regarding Enbridge's consultation efforts.

The Board's approval is subject to conditions set out in the Orders and described in the accompanying Reasons for Decision. For example, the Board's conditions require Enbridge to undertake activities regarding pipeline integrity, emergency response, and continued consultation.  The Board's Reasons for Decision and conditions also make reference to Enbridge's ongoing emergency response planning and consultation with municipalities, first responders and Aboriginal groups.

The National Energy Board is an independent federal regulator of several parts of Canada's energy industry with the safety of Canadians and protection of the environment as a top priority. Its purpose is to regulate pipelines, energy development and trade in the Canadian public interest.

This news release and the Reasons for Decision are available on the NEB's Internet site at www.neb-one.gc.ca under What's New!

Relevant documentation:

Enbridge Pipeline Inc. - Line 9B Reversal and Line 9 Capacity Expansion Project

Backgrounder

Overview

On 6 March 2014, the National Energy Board released its Reasons for Decision concerning the Line 9B Reversal and Line 9 Capacity Expansion Project (Project) application submitted by Enbridge Pipelines Inc. (Enbridge).  The Board has approved the Project with conditions, but denied Enbridge's request for exemption from leave to open requirements. Interested persons should also refer to the full text of the Board's Reasons for Decision.

With this decision, Enbridge will be able to react to market forces and provide benefits to Canadians, while at the same time implementing the Project in a safe and environmentally sensitive manner.

On 29 November 2012, the Project application was filed under section 58 and Part IV of the National Energy Board Act (NEB Act). On 19 December 2012, the Board determined that the application was complete and its assessment could start.

The application involves the reversal of a 639-kilometre segment of Line 9, called Line 9B, between North Westover, Ontario and Montreal, Quebec, and a capacity expansion from 240,000 to 300,000 barrels per day for the entire Line 9 from Sarnia, Ontario to Montreal, Quebec. Among other requests, Enbridge also asked for a revision to its Line 9 Rules and Regulations Tariff to allow for the transportation of heavy crude oil, and an exemption from having to apply for leave to open.

In a previous decision issued on 27 July 2012, the Board approved reversal of the western segment of Line 9 between Sarnia, Ontario and North Westover, Ontario. The requested reversal in flow direction from west to east for Line 9B would see the entire Line 9 revert back to the direction that was originally approved by the Board in 1975 and the direction in which Line 9 flowed for 23 years (between 1976 and 1999).

The Board's Hearing Process

The Board decided to hold a public hearing for this Project, consisting of written evidence and oral final argument.

The oral final argument portion of the hearing was held at the following locations:

  • Tuesday, 8 October to Friday, 11 October 2013
    Montréal, Québec
  • Wednesday, 16 October to Friday, 18 October 2013
    Toronto, Ontario

Enbridge provided its written reply argument on 25 October 2013.

During the Board's hearing process it heard from Participants regarding pipeline integrity, spills and emergency response, and also regarding Enbridge's consultation efforts.

The Board's approval is subject to conditions set out in the Orders and described in the accompanying Reasons for Decision. For example, the Board's conditions require Enbridge to undertake activities regarding pipeline integrity, emergency response, and continued consultation.

The Board's Reasons for Decision and conditions also make reference to Enbridge's ongoing emergency response planning and consultation with municipalities, first responders and Aboriginal groups.

List of Issues Considered

  • The need for the proposed Project.
  • The potential commercial impacts of the proposed Project.
  • The appropriateness of the proposed Rules and Regulation Tariff and tolling methodology.
  • The potential environmental and socio-economic effects of the proposed Project, including the potential effects of malfunctions or accidents that may occur, and any cumulative environmental effects that are likely to result from the proposed Project.
  • The engineering design and integrity of the proposed Project.
  • The safety, security, and contingency planning associated with the construction and operation of the proposed Project, including emergency response planning and third-party damage prevention.
  • Consultation with Aboriginal groups and the potential impacts of the proposed Project on Aboriginal interests.
  • Consultation activities and potential impacts of the proposed Project on affected landowners and land use.
  • The terms and conditions, related to the above issues, to be included in any approval the Board may issue for the proposed Project.

The Board did not consider the environmental and socio-economic effects associated with upstream activities, the development of oil sands, or the downstream use of the oil transported by the pipeline.

Public Participation

In July 2012, changes to the NEB Act were passed, including the addition of section 55.2, which sets out when the Board will allow a person or a group to participate in a hearing to consider an application to construct and operate a pipeline or power line.

The Board must hear from those who are, in the Board's opinion, directly affected, and may choose to hear from those who, in the Board's opinion, possess relevant information or expertise.

The Board received applications to participate from 178 persons or groups, of which 160 were granted as requested. Eleven persons who requested intervenor status were instead granted the opportunity to submit a letter of comment and seven were not granted standing. As a result, there were 60 Intervenors and 111 Commenters registered for this proceeding.

Participant Funding

The NEB administers a Participant Funding Program (PFP) which provides financial assistance to support the timely and meaningful engagement of individuals, Aboriginal groups, landowners, incorporated non-industry not-for-profit organizations, or other interest groups who seek to intervene in the NEB's oral hearing process for facilities applications.

On 1 February 2013, the NEB indicated that $200,000 would be available under its PFP for interested persons to participate in the regulatory review process for the Project.

Enbridge Pipelines Inc. - Line 9B Reversal and Line 9 Capacity Expansion Project
Frequently Asked Questions

NOTE: Interested persons should also refer to the full text of the Board's Reasons for Decision.

Q.  What did Enbridge request in its application?
A.  On 29 November 2012, Enbridge Pipelines Inc. (Enbridge) filed an application under section 58 and Part IV of the National Energy Board Act (NEB Act) asking for approval to reverse a segment of Line 9 between North Westover, Ontario and Montreal, Québec, in addition to requesting a capacity expansion for the entire Line 9 from Sarnia, Ontario to Montreal, and a revision to the Line 9 Rules and Regulations Tariff to allow transportation of heavy crude.  Subsequent to this Enbridge also requested an exemption from certain requirements under the Oil Pipeline Uniform Accounting Regulations and the Board's Filing Manual.

Enbridge has already obtained Board approval to reverse the pipeline's flow for the section running between Sarnia and North Westover, in southwestern Ontario. The Letter Decision [Filing A43137] for the Line 9 Reversal Phase I Project [Folder 706437] was issued on 27 July 2012.

Q.  Is the Board the Final Decision-Maker?
A.  Yes.  For an application such as this one which falls under section 58 of the NEB Act, the Board's decision is final and does not involve making a recommendation to the Government of Canada for another level of approval.

Q: When will the line reversal occur?
A:  In its decision the Board denied Enbridge's request for an exemption from leave to open (LTO) requirements.  After complying with certain conditions in the accompanying Part III Order and any additional Board requirements Enbridge will have to apply under s. 47 of the NEB Act for LTO.

More information on LTO applications can be found here: http://www.neb-one.gc.ca/clf-nsi/rpblctn/ctsndrgltn/flngmnl/fmgdt-eng.html

Q.  Does this decision grant Enbridge approval to transport heavy crude oil?
A.  Yes. Part of the Board's decision includes approval of a revision to Enbridge's Rules and Regulations Tariff for the transport of heavy crude oil. As a result, Enbridge will be permitted to operate all of Line 9 in an eastward direction in order to transport crude oil from western Canada and the U.S. Bakken region to refineries.

Q. Where can I find the list of Enbridge's commitments?
A. Condition 5 of the Part III Order requires Enbridge to post a Commitments Tracking Table on its website.

Q.  Is there any further public consultation required for the project?
A.  Yes. The Board has imposed conditions regarding ongoing consultation.

Q.  What are Management Systems?
A.  A management system as required by the National Energy Board Onshore Pipeline Regulations (OPR) is essentially a framework of processes and procedures used by an organization to fulfill its objectives. It would normally contain elements such as accountabilities, procedures for tasks and tools for auditing and continuous improvement.  A company's management system applies to the company's programs for safety, security, integrity, environmental protection and emergency management.

More information about management systems can be found here: http://www.neb-one.gc.ca/clf-nsi/rpblctn/ctsndrgltn/rrggnmgpnb/nshrppln/nshrppln-eng.html

Q.  What conditions were imposed?
A.  The conditions are listed under two separate Orders, both of which can be found at the end of the Reasons for Decision.  The rationale for each condition can be found in the relevant sections within the Reasons.

The conditions contained in the Orders:
Appendix IV: NEB Section 58 Order XO-E101-003-2014 Conditions
Appendix V: NEB Part IV Order TO-002-2014 Conditions

Q.  How does the Board ensure compliance?
A.  There are various methods to ensure compliance, including inspections. The Board routinely conducts compliance meetings and inspections of pipeline projects to verify regulatory compliance. The Board also conducts audits of company management systems. These regulatory activities continue throughout the life of a project.

Each year the NEB conducts targeted compliance verification activities including six comprehensive audits and at least 150 inspections of regulated companies. This is in addition to the 100+ technical meetings and exercises conducted on an annual basis. These tools are effective in allowing the Board to proactively detect and correct non-compliances before they become issues.

Fact Sheet: Pipeline Safety
Fact Sheet: NEB's Enforcement Toolkit
Whistleblower Reporting: 403-807-9473

Q.  Are there any provincial approvals required for the project?
A.  In addition to the Board's approval, companies may still need separate approvals from other jurisdictions. It is the responsibility of the company to determine what permits and licenses are required.

Q.  How are concerns by landowners addressed by the Board?
A.  Concerned landowners can contact the Board to access its Landowner Complaint Resolution Program and the Appropriate Dispute Resolution (ADR) processes which involve informal and formal options for resolving outstanding issues.

Q.  How much time did the Board take before making this decision public?
A.  Under the NEB Act, the Board is required to issue a decision within 15 months of an application being determined to be complete, subject to any modifications permitted under the NEB Act.  From the time the application was determined to be complete on 19 December 2012, the Board took just under 15 months to issue its decision.

Resources Available at the National Energy Board

Where can I find more information?

NEB Web Site:
The NEB website contains information on NEB activities, regulatory documents and general energy information. The website can be accessed at: www.neb-one.gc.ca.

NEB Library:
The NEB Library is an excellent source of information for people interested in energy issues or NEB matters. Library staff can respond to inquiries via e-mail, telephone or mail.

E-mail: library@neb-one.gc.ca
Telephone: 403-299-3561 or toll free 1-800-899-1265.

If you're looking for an NEB publication, you can contact the Publications Coordinator in the Library at publications@neb-one.gc.ca or 403-292-3561 or via the toll free number above. All NEB publications are also available on the website under the heading Publications.

E-mail:
The NEB has a general e-mail account for all energy-related inquiries. You can submit your questions to info@neb-one.gc.ca .

Telephone/ Fax:
You may contact the NEB at 403-292-4800 or toll free at 1-800-899-1265.
To send a fax, dial 403-292-5503 or toll free 1-877-288-8803.

Mail:
National Energy Board
444 Seventh Avenue SW
Calgary, Alberta
T2P 0X8

SOURCE National Energy Board

For further information:

Carole Léger-Kubeczek
Communications Officer
E-mail: Carole.leger-kubeczek@neb-one.gc.ca
Telephone: 403-221-3465
Telephone (toll free): 1-800-899-1265
Facsimile: 403-292-5503
Facsimile (toll free): 1-877-288-8803
TTY (teletype): 1-800-632-1663

For a copy of the Reasons for Decision:  
National Energy Board Library
Ground Floor
444 Seventh Avenue SW
Calgary, Alberta
T2P 0X8
Telephone: 403-299-3561
Telephone (toll free): 1-800-899-1265
Facsimile: 403-292-5576
Facsimile (toll free): 1-877-288-8803
Email: library@neb-one.gc.ca