Regulatory Law Chambers logo

Abandonment Hearing Obsidian Energy Ltd. Application for Approval to Abandon One Lateral Pipeline (NEB Decision MHW-002-2019)

Link to decision summarized

Natural Gas – Lateral Pipeline Abandonment

In this decision, the NEB considered an application (the “Application”), filed on September 25, 2019 by Obsidian Energy Ltd. (“Obsidian”) for leave to abandon an in-place pipeline (the “Project”). The NEB issued Order ZO-O115-006-2019 (the “Order”) granting Obsidian leave to abandon the natural gas Esther Court Pipeline (the “Pipeline”).

Application and Project Overview

The Project was located close to and crossing the Alberta-Saskatchewan border within agricultural lands which included freehold land and land used for livestock pasture and cultivation.

Assessment of the Application

Engineering Matters

Obsidian noted that it would conduct hazard assessments on the Pipeline to be abandoned to ensure proper handling, storage, and/or disposal of onsite infrastructure, waste, and materials.

The NEB found that the Project’s abandonment activities complied with the Canadian Standards Association Standard Z662-15: Oil and Gas Pipeline Systems (“CSA Z662-15”) and the NEB Onshore Pipeline Regulations.

The NEB noted that the new edition of the Canadian Standards Association Standard: Z662-19: Oil and Gas Pipeline Systems was released to the general public on June 19, 2019 and reminded Obsidian of its obligation to comply with the new requirements.

Economic Matters

Obsidian stated that the estimated cost of the Project would be $45,485, that it considered the Project to have limited size and scope and that it would have no implications to existing service on the Obsidian system.

Given the small size of the Project, the Board was satisfied that funds would be available to finance the abandonment through the financial resources of Obsidian. The NEB noted that Obsidian would remain financially responsible for the Pipeline abandoned in-place.

Environment Matters

Obsidian stated that the proposed abandonment activities were limited to areas at either end of the Pipeline right of way (“RoW”) and would take place under frozen conditions to minimize environmental impacts. Obsidian indicated it intended to clean-up and reclaim the disturbed portions following the abandonment procedures.

Obsidian indicated that it would submit reports to the NEB following the abandonment activities that describe the post-abandonment monitoring conducted and its progress.

The NEB was of the view that there is low environmental risk of leaving the Pipeline in-place.

The NEB found that mitigation measures outlined in Obsidian’s Environmental Protection Plan (the “EPP”) would sufficiently avoid or minimize adverse environmental effects.

The NEB imposed Condition 5 – Reclamation Reporting, which set out requirements and a schedule for filing reports demonstrating that the disturbed areas are restored. Obsidian was required to file a reclamation report to demonstrate that the entire Pipeline RoW has or would reach equivalent land capability.

The NEB anticipated that potential adverse environmental effects arising from the Project would be of limited geographic extent, short-term, reversible, and are not likely to cause any significant adverse environmental effects.

Public Consultation, Lands and Socio-Economic Matters

Five landowners and one occupant were directly affected by the abandonment activities. Obsidian stated that the proposed abandonment activities would be limited to work areas at either end of the Pipeline RoW, located on privately-owned agricultural land. Obsidian explained that following abandonment activities the land use would remain the same and reclamation, as outlined in the Project’s EPP, would occur as soon as possible and would follow agreements with landowners.

Obsidian notified landowners, occupants and local authorities before filing the Application and did not receive any issues or concerns regarding the abandonment plans.

The NEB was of the view that the design and implementation of consultation activities correlated with the scale and scope of the Project.

The NEB was also satisfied that Obsidian identified and addressed all relevant socio-economic effects of the Project. The NEB was of the view that significant socio-economic effects were unlikely.

Indigenous Matters

The NEB required Obsidian to serve a copy of the January 25, 2019 Notice of Abandonment Hearing MHW-002-2019 issued by the Board on 21 Indigenous communities identified by the NEB.

The NEB was of the view that all potentially affected Indigenous communities were given sufficient notice and had the opportunity to raise any concerns. It was also of the view that any potential adverse effects were not likely to be significant and could be effectively addressed.


The NEB granted Obsidian leave to abandon the Pipeline.

Related Posts