WHEREAS the regulation of petroleum based industrial facilities has historically fallen upon the Energy Resources Conservation Board (ERCB);and
WHEREAS the Alberta Energy Regulator (AER) is the entity which has succeeded the ERCB; and
WHEREAS many smaller municipalities may not have the experience, resources, or familiarity with large transloader facilities to be able to effectively regulate and/or assess the suitability of the proposed operation; and
WHEREAS most larger companies active in the “Pipeline on Rail” business are familiar with and currently engaged with the AER (formerly the ERCB) on other energy sector regulator matters, and are familiar with the procedures; and
WHEREAS it is desirable to have a uniform and consistent regulatory environment in Alberta respecting “Pipeline on Rails”; and
WHEREAS the Alberta Energy Regulator does not currently regulate petroleum transloader (a.k.a “pipeline on rails”) facilities;
THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties calls upon the Government of Alberta to consult on a priority basis with industry and municipalities to establish an appropriate set of regulatory requirements for “Pipeline on Rails” and that the Alberta Energy Regulator (AER) be designated as the appropriate body to implement these regulations.
Transloader facilities, where substantial qualities of liquid hydro-carbons are shipped via truck to rail terminals are becoming increasingly common in Alberta. These transloaders, sometimes called “Pipeline on Rails” may represent a vital link in Alberta’s economic future due to shifting global energy production patterns, market demands, and limitations of the existing pipeline infrastructure.
Currently, these transloaders are not regulated via the Alberta Energy Regulator (AER) – the entity which has succeeded the Energy Resources Conservation Board (ERCB). There are several reasons why “Pipeline on Rails” facilities logically should fall under the AER, rather than being left to the local municipality, including:
The ability of the Alberta energy sector to be able to reach any and all world markets is critical to the longer term economic viability of the industry.
The “Bitumen Bubble” which has historically caused Alberta crude oil (Western Canadian Select) to trade anywhere from 15 to 40 dollars a barrel below other comparable blends, is a substantial cause of financial concern to our province.
Oil shipments via “Pipeline on Rails” realize a much higher percentage of the world price, thus generating substantial additional revenues both for the energy sector and the Alberta Government, thus contributing to the future economic health or our Province,
Delays in the approval of the Keystone XL pipeline will guarantee continuing transportation bottlenecks or Alberta oil into the US far into the future
The dramatic and rapid increase in United States energy production is likely in the medium term to require Canada to seek energy export markets into Asia and other export markets as Canadian imports are replaced by US domestic production, and “Pipeline on Rails” is the fastest and most flexible method of adapting to new market patterns,
Both CN and CP rail have committed to dramatic expansions of capacity to facilitate “Pipeline on Rails”.
The AAMDC has no active resolutions directly related to this issue.
Transportation: Transportation is actively working with Transport Canada, Environment and Sustainable Resource Development and the Alberta Energy Regulator (AER) to ensure complete regulatory oversight for transload facilities.
Transportation is responsible for administering the Railway (Alberta) Act and associated rules, regulations and standards. This Act applies to all provincially regulated railways.
A majority of the rail transport conducted in Alberta is by Canadian Pacific (CP) or Canadian National (CN) Railway. All sites that transload petroleum crude oil on CN or CP land that have a terminal service agreement with the railway are federally regulated under the jurisdiction of Transport Canada.
All sites that own or lease track from CN or CP by way of a siding agreement are under provincial jurisdiction. There are currently 24 provincially regulated and 11 federally regulated transload sites.
All transload sites under provincial jurisdiction are required to have an Operating Approval. As part of the approval, facilities must submit a Safety Management System and conduct periodic audits.
Transportation also regulates the safe loading, unloading and transportation of crude oil, in accordance with federal and provincial dangerous goods legislation. This is done by conducting periodic facility inspections and following up on dangerous goods incidents.
The AER is responsible for regulation of pipeline installations associated with pipeline to rail transloading facilities, including associated tank storage.
Since indicating in early 2014 that Alberta Transportation, Alberta Energy, the Alberta Energy Regulator, and Transport Canada are collaborating to better define regulatory responsibility for transloader facilities, no ministry at either the provincial or federal level has indicated progress being made on this issue. Although the Alberta Energy Regulator has been willing to provide information to municipalities about how transloader facilities are regulated, there has been little progress on clarifying the regulatory process and filling regulatory gaps. As such, the government response to this resolution is deemed Intent Not Met until a clearer, streamlined regulatory process is implemented based on consultation with municipalities.