Companies set aside over $2B to cover future pipeline abandonment costs

This article was published by the Canada Energy Regulator on June 10, 2020.

A company will abandon a pipeline (permanently shutting the pipeline down and rehabilitating the land around it) after the pipeline is no longer useful. The Canada Energy Regulator (CER) requires this be done safely and in an environmentally responsible manner. More information regarding pipeline abandonment is available on the CER website.

Pipeline owners−not landowners or governments−are liable for the costs and financing of safe and environmentally responsible pipeline abandonment. In 2014, the CER required the companies it regulated to collect and set aside funds to cover future pipeline abandonment costs. Over $2 billion has already been set aside for pipeline abandonment funding, and more money is being set aside every year.

The interactive graph shows the total amount set aside in trust funds. You can select the pipeline names listed below the graph to see the funds set aside for each pipeline. Some companies also use letters of credit or surety bonds to ensure there will be funds available to pay for abandonment activities when required.¹

Pipeline companies report related information to the CER each year, including amounts contributed to trusts and earnings on investments in these trusts. Official CER documents related to abandonment funding can be found here, sorted by year and by company, for every pipeline the CER regulates: abandonment funding documents [Folder 3300366].

Footnotes

1. Additionally, over $200 million has been set aside in Letters of Credit and Surety Bonds.