Canada Energy Regulator issues reasons for decision for denying Trans Mountain's pipe size variance application

CALGARY, AB, Dec. 20, 2023 /CNW/ - The Commission of the Canada Energy Regulator has determined that Trans Mountain did not adequately address concerns about pipeline integrity and related environmental protection impacts in its pipe size variance application. These concerns outweighed the benefits for earlier completion of the Trans Mountain Expansion Project (TMEP).

The 2.3-kilometre section located beside the Fraser River, between Hope and the Burnaby Tank Terminal, was approved to be constructed with 36-inch pipe. However, Trans Mountain faced slow progress due to challenging horizontal directional drilling (HDD) conditions and proposed using a smaller 30-inch pipe that would not affect overall capacity.

For this decision, the Commission had to weigh the benefits against the drawbacks. Trans Mountain says that the variance could allow for the completion of the project around 59 days sooner than it would take to complete the project without the requested variance. This could bring approximately $400 million in additional revenue, along with benefits to shippers.

The Commission found that the drawbacks outweighed Trans Mountain's stated benefits. Specifically, it had concerns about:

• Quality of materials: Trans Mountain did not demonstrate compliance with its Quality Management Program. The company did not show that the quality of materials for the 30-inch pipe would meet the standard of those used in the rest of the TMEP.
  
  
  
• In-line inspections: Trans Mountain did not demonstrate how they would conduct in-line inspections before beginning operations on the full 138.4-kilometre pipeline section between Hope and the Burnaby Tank Terminal. Without in-line inspections (ILI), they could not ensure the safety and integrity of this section of pipe to the same level as the rest of the TMEP.
  
  
  
• Pipeline integrity and environmental protection: Trans Mountain did not adequately address potential environmental impacts from material quality changes and lack of ILI capability. Trans Mountain did not provide satisfactory responses or solutions to address the Commission's requests for additional information.

On December 14, 2023, Trans Mountain filed a new variance application for the same pipeline section. The CER is currently evaluating this application.

• Trans Mountain applied for a variance on October 31, 2023, for changes to the diameter, wall thickness and coating of a 2.3-kilometre segment of the pipeline, citing challenges with HDD and a desire to expedite project completion.
  
  
  
• The oral hearing was held on November 27, 2023, in Calgary, Alberta.
  
  
  
• On December 5, 2023, the Commission denied the variance application.
  
  
  
• Two letters of comment were filed:
  
  • November 20, 2023 - PetroChina Canada requested additional operations and finance information from Trans Mountain (C27347).
  • November 30, 2023 - CNRL, representing itself and four other producing and refining companies, expressed concerns with the variance and urged the CER to ensure that any actions taken do not contribute to delays in the TMEP's in-service date (C27485).
    
    
    
• This is Trans Mountain's second application to change the conditions of its project approval since August 2023. The first was a deviation application in the Pípsell area. The Commission found that continuing micro-tunnelling would most likely fail and the alternative of HDD and open trench was more feasible.

• Mountain 3 Horizontal Directional Drill Variance Application Reasons for Decision

The Canada Energy Regulator (CER) works to keep energy moving safely across the country. We review energy development projects and share energy information, all while enforcing some of the strictest safety and environmental standards in the world. To find out how the CER is working for you, visit us online or connect on social media. 

SOURCE Canada Energy Regulator