Copyright & Disclaimer
 

 Lack of Indemnity for Certain Landowners

 

In general, the National Energy Board Act did not require pipeline utilities to include indemnity clauses for landowners in easement agreement until 1983. If the original easement agreement for your property pre-dates 1983, you may very well be lacking an indemnity from the pipeline company. Since many easement agreements for the major pipelines were written in the 1950’s, 1960’s and 1970’s, it might be advisable for landowners to locate and read their easement agreements.

In Ontario at least, property owners are responsible for any environmental pollution originating from their property. Thus, if an oil pipeline leaks or ruptures, you could be liable for claims against you for damages for pollution emanating from your property.

If you do not have a written indemnity clause requiring the company to indemnify you for any claims arising as a result of their operations, this could be cause for concern. This may seem unfair to you, particularly when landowners with post-1983 agreements under NEB jurisdiction will have protection from indemnity clauses included in their agreements. There is one issue CAPLA intends to address.

 

 Landowners and Public Safety

 

Landowners are living and working very near pipelines. The following concerns have been raised by CAPLA relating to safety:

●  The Auditor General’s September 1998 Report on the NEB

The Auditor General’s Report states that "in our opinion, post-construction inspection is not being given the attention it deserves". The Report also notes that high NEB staff turnover and lack of staff with appropriate experience could be factors affecting the work of the NEB. CAPLA will investigate if such conditions do exist. Independent pipeline inspection is important to CAPLA.

●  Increased Pressures in New Pipelines

Pipelines with projected operating pressures over 1400 psi concern CAPLA. Even though pipe walls are stated to withstand such increased pressures, accidents do happen. If a rupture should occur, it appears to the layman that landowners near such pipelines would be in an area of increased danger compared to lower pressure pipelines. Again, CAPLA will investigate.

●  Thinner-Walled Pipelines in Rural Areas

New pipelines in rural areas with lower population densities still receive thinner walled pipelines than urban areas of higher population densities. CAPLA believes rural landowners deserve equal protection.

●  Depth of Cover Over Pipelines

Although the standards for oil and gas pipeline systems set by the Canadian Standards Association (CSA) contain requirements for depth of cover, CAPLA is concerned that the minimum standard of cover is not sufficient both from a safety and drainage perspective and is not being maintained by all pipeline companies.

A landowner in Ontario was sued by a pipeline company when a loader basket contractor hired by the landowner ruptured a pipeline carrying gasoline. The pipeline utility contended that the landowner was negligent because he did not comply with Section 18(1) of the Ontario Energy Act which provides that "no person shall dig, bore, trench, grade, excavate or break ground with mechanical equipment or explosives without first ascertaining the location of any pipeline that may be interfered with".

Most landowners under OEB jurisdiction are not aware of the details of s.18(1) of the Ontario Energy Act. You might want to ascertain the depth of cover on your pipelines if you have any concern.

From the evidence the judge found "as a fact" that the eight-inch pipeline was only 3" below ground surface at the rupture site. The judge held that the plaintiff utility company had actual knowledge that the pipeline had insufficient cover, and that the plaintiff’s negligence was the sole and effective cause of the damage and dismissed the action.

The gasoline line accident mentioned above happened in 1987, the decision was released in 1993. Six years is a long time for a landowner to wait for resolution of the issue.

●  Binbrook Crude Oil Pipeline Rupture - September, 2001

On September 29, 2001, an Enbridge crude oil pipeline ruptured, as a result of corrosion and cracking, in an agricultural field near Binbrook, Ontario, resulting in oil contamination of nearly 1.5 acres of productive farmland.

Transportation Safety Board of Canada's Pipeline Investigation Report on the incident concluded that the corrosion defect was probably 40-45 percent through wall but was not identified in the 1990 ILI vendor’s final report and was therefore not repaired at the time.

It further concluded that during the subsequent 11 years, corrosion continued until the wall had thinned to 16 per cent of its original thickness and the pipe wall could no longer support the stresses associated with the internal operating pressure.

Older pipelines may be deteriorating beneath the ground, and landowners should be concerned by cases like the Binbrook rupture. For further information on other pipeline ruptures and occurrences, please see the Links/Documents page and visit the TSB website.

 

 Pipeline Abandonment

 

Pipelines are presently being both idled and abandoned in Canada. CAPLA, although certainly not experts in this field, believes that at least two potential liabilities could arise after a pipeline is abandoned.

Residue from any previous oil pipeline leaks or spills might not be discovered until after the pipeline is abandoned.

Abandoned oil or gas pipeline, if not continuously serviced with cathodic protection to prevent corrosion, will very probably begin rusting after some decades. In undulating farmland such as in areas of Southern Ontario, a rusting pipeline, if left empty, could easily act as a water conduit from farm to farm. Such pipelines could be a continual source of deep blowouts from soil erosion caused as water flows under pressure from higher to lower areas and gushes from any porous pipe in the lower areas.

 

 Section 112 of the NEB Act

 

In 1990, s.112 of the NEB Act was amended. Landowners since 1990 have not been allowed to excavate or dig with any power-operated equipment deeper than a depth of 30 cm (1foot) within a 30-metre control zone on either side of the pipeline easement without first obtaining permission from their respective pipeline company. CAPLA believes this restriction currently only applies to landowners under NEB jurisdiction. Landowners were not consulted about this legislative change; nor were they compensated for the inconvenience and loss of total control over this portion of their property. CAPLA does not believe this should happen in Canada.