December 2007

Disclaimer: Agrilaw is a syndicated column produced by the full service London law firm of Cohen Highley LLP.  Paul G. Vogel, a partner in the firm, practises in the area of commercial litigation and environmental law.   Agrilaw is intended to provide information to farmers on subjects of interest and importance. The opinions expressed are not intended as legal advice.  Before acting on any information contained in AgriLaw, readers should obtain legal advice with respect to their own particular circumstances.

Should you need to discuss a energy regulation related matter, please contact Paul Vogel or John Goudy by e-mail or by telephone at (519) 672-9330.  If corresponding by e-mail, be sure to include your name, your telephone number and a brief message.

Pipelines - Unity Brings Success

United we stand, divided we fall. Energy pipeline landowners throughout Canada are joining forces to confront issues of common concern.

With the assistance of the Canadian Alliance of Pipeline Landowners’ Associations (CAPLA), over 400 Manitoba and Saskatchewan farmers have recently concluded a settlement agreement with Enbridge Pipelines Inc. with respect to Enbridge’s proposed construction of the Alberta Clipper and Southern Lights pipelines. Supported by representatives from Ontario pipeline landowner associations, the Manitoba Pipeline Landowner Association (MPLA) and Saskatchewan Association of Pipeline Landowners (SAPL) successfully negotiated on behalf of their members commitments from Enbridge to address liability for abandoned pipelines, regulatory restrictions on crossing pipelines with agricultural equipment, limiting easement access, location of surface facilities, conduct parameters and compensation for maintenance dig operations, resolution of construction disputes, topsoil preservation, responsibility for drainage issues, weed control, and compensation.

Adopting approaches to the resolution of these issues from a settlement concluded last year by the Gas Pipeline Landowners of Ontario (GAPLO) (another CAPLA landowner association), the MPLA/SAPL settlement is a good example of landowners from one region helping landowners in other regions successfully deal with the impacts of pipeline construction and operations on farm operations and productivity and the income, safety and well-being of farm families. On behalf of their members, MPLA and SAPL participated as joint intervenors on both the Alberta Clipper and Southern Lights applications by Enbridge to the National Energy Board for regulatory approval of these projects. Again, they were able to build on evidence originally developed by GAPLO in Ontario to demonstrate to the National Energy Board the widespread nature and significance of these impacts. MPLA/SAPL’s prefiled evidence included the most comprehensive survey to date of landowners affected by these projects documenting the escalating concerns landowners have with respect to environmental, social and economic impacts being experienced as a result of the continuing expansion of pipeline utility corridors. This prefiled evidence also addressed pipeline design and safety concerns related to proposed depth of cover, pipe thickness and future pipeline abandonment; cumulative soil and productivity impacts related to multiple pipeline construction; restrictions on both more intensive agricultural land use and future development; and deficiencies in current compensation packages with respect to recognizing continuing financial impacts.

In the MPLA/SAPL settlement concluded shortly before the scheduled commencement of the NEB regulatory hearing, Enbridge has agreed that, upon abandonment, it will not surrender its easement without the consent of the landowner and will either remove or continue to maintain all of its pipelines. It has also agreed that any company acquiring its pipelines will have equivalent financial stability or Enbridge will continue to be liable for its abandonment obligations. It has agreed that any future restrictions on pipeline crossing must be specified in writing and mitigated unless the landowner agrees to compensation. Easement access is limited to only emergencies or for maintenance digs to be conducted in accordance with a written form of agreement with the landowner defining where, when and how the dig will be conducted and establishing minimum compensation payable in advance. Surface facilities are to be located adjacent to lot lines and road allowances. There will be an independent construction monitor and joint committee with landowner representatives to assist in the resolution of construction disputes. Full easement topsoil stripping is available to the landowner in unfrozen conditions and Enbridge has committed to restoration of preconstruction grades and soil densities with continuing responsibility for drainage issues. Site specific construction issues are to be identified in an appendix to the settlement agreement with each landowner. The compensation package includes a premium on market value for land rights; multiple year crop loss payable in advance of construction; a premium on crop loss and disturbance damages for construction in wet soil conditions; and a linear disturbance signing bonus based on the length of the pipeline across each property.

United under the CAPLA umbrella, MPLA/SAPL landowners with the assistance of GAPLO’s Ontario experience have achieved substantial progress towards satisfactory resolution of their issues. CAPLA is continuing its efforts to assist other pipeline landowners to organize with respect to these and other pipeline issues and provides a national voice for landowners who share these concerns (For more information about CAPLA initiatives, see www.pipeline-landowners.com).