CER Land Matters Consultation Initiative
In late 2007, the Canada Energy Regulator (CER) announced the Land Matters Consultation Initiative (LMCI). The LMCI was launched by the CER as a forum to engage with interested stakeholders and organizations on making improvements in matters related to land and federally regulated pipelines. One of the key areas for consideration in the LMCI was pipeline abandonment funding.
After extensive public consultation, the CER issued its RH-2-2008 Reasons for Decision that laid out the guiding principles and an action plan to address the monetary costs of pipeline abandonment. In accordance with that action plan the CER ordered its regulated companies to begin collecting and setting aside funds for the eventual abandonment of their CER-regulated facilities, starting in 2015.
In response to the CER’s direction, Plains Midstream Canada (PMC) began collecting and setting aside funds for future abandonment in January of 2015. Because pipelines are built to operate safely for many decades, we have no current plans to abandon any of our CER-regulated pipelines. However, as a prudent operator we are collecting these funds for eventual abandonment that may occur many years in the future.
PMC has chosen to use Qualifying Environmental Trusts (QETs) to set aside funds for future pipeline abandonment. A QET is a special kind of trust under the Income Tax Act maintained exclusively to accumulate funds to finance the future reclamation of a qualifying site (like a pipeline) in Canada.
The following PMC CER-regulated assets will have funds placed into their own separate QETs:
• Aurora Pipeline
• Bodo Pipeline
• Empress - Kerrobert Pipeline*
• Milk River Pipeline
• Plains Petroleum Transmission Company (PPTC) Pipeline
• Sarnia Downstream System
• Wapella Pipeline
• Wascana Pipeline
• Windsor-Sarnia Pipeline + Kalkaska Pipeline + Eastern Delivery Systems
• Windsor Storage Facility
* Plains has a 50 percent ownership and is the operator of the Empress-Kerrobert Pipeline. As such, PMC is responsible for submission of the CER compliance filings related to the QET for this asset, into which funds are being set aside by PMC and its joint venture partner.
Annually, PMC updates the CER on the financial information of the QET and provides trust Annual Reporting Forms with the CER. See links to these Forms here: https://apps.cer-rec.gc.ca/REGDOCS/Item/View/3559678
For further information from PMC about this initiative please contact: PublicAwareness@plainsmidstream.com
More information on the CER’s Land Matters Consultation Initiative