Pipelines are an integral part of the Canadian economy and our very way of life, transporting energy from supply areas to market – ultimately so that people have the energy required to maintain a high standard of living.
All pipelines have four distinct lifecycle phases: (1) planning and design; (2) engineering and construction; (3) operations; and (4) abandonment. While the abandonment of major transmission pipelines is likely many decades away, the Canada Energy Regulator (CER) has directed federally-regulated pipeline companies to collect and set aside funds to cover future abandonment costs. Alliance started such collection in early 2015 through a surcharge to its shippers, with the funds held in trust. The CER has approved the trust mechanism and requires that financial statements be filed annually.
Alliance anticipates that any future abandonment plan will typically involve removal of aboveground facilities and abandonment in place of buried piping in an environmentally responsible and safe manner. This approach is less intrusive to our stakeholders than other options such as removal. While few issues are expected to arise from pipeline abandonment, the funds will allow for the resolution of such issues.
Click below for further information, including a fact sheet with information about abandonment as well as a copy of the most recent annual financial statement that Alliance filed with the CER for its abandonment trust.
Because abandonment is so far in the future, collection of related funds has to be based on highly preliminary assumptions regarding abandonment methods and associated costs. In that regard, Alliance has also provided a copy below of its current abandonment cost estimate.