Decision No. 91-R-2000

February 10, 2000

File No. R 8050/373-011.86

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APPLICATION

On November 24, 1999, Alliance Pipeline Ltd. (hereinafter Alliance) filed with the Canadian Transportation Agency (hereinafter the Agency) the application set out in the title.

Pursuant to subsection 18(1) of the Canadian Environmental Assessment Act, S.C., 1992, c. 37 (hereinafter the CEAA), the project has been screened and a screening report has been prepared.

The Agency is of the opinion that public participation in the screening of the project under subsection 18(3) of the CEAA is not required in the circumstances.

After taking into consideration the screening report, the Agency determines that the project is not likely to cause significant adverse environmental effects.

The Agency notes that Alliance and the Canadian National Railway Company (hereinafter CN) have not been able to agree on some terms of the Canadian National Railway Company's Master Utility Crossing Agreement (hereinafter the Agreement).

POSITIONS OF THE PARTIES

The parties have agreed on the location, the method of construction and the maintenance of the utility crossing. However, they have not been able to conclude an agreement with respect to the issues of compensation, duration and liability.

Alliance states that it objects to the payment of application, processing and annual administrative fees as specified in clause 10.1 of the Agreement and more specifically in Schedule "C".

CN considers that the costs associated with the review of the plans and of the proposed method of installation of the pipelines, performed by an outside consultant on behalf of CN, are the equivalent of the inspector fees referred to in the Pipe Crossings Under Railways Regulations, General Order No. E-10, C.R.C., Vol. XIII, c. 1187 of the Board of Transport Commissioners for Canada (hereinafter General Order No. E-10). For those reasons, CN will have an itemized statement detailing the wages and expenses of the inspector assigned to the review of the project sent to Alliance subsequent to the completion of the work.

CN does not object to the presence of utility crossings under its tracks. However, it submits that it derives no benefit from such installations and that it should not be required to bear the cost of a review of this type of application, nor of the method of installation to ensure a) the integrity of its operations and b) that safety requirements and standards have been met.

Alliance maintains that there is an obligation for CN and all utility companies to ensure the safety and integrity of their infrastructure.

As for the other issues raised in Alliance's application, CN has on numerous occasions in the past addressed these questions and refers the Agency to its positions.

Alliance also objects to the indemnification as specified in clause 11 of the Agreement which is greater than the requirements of General Order No. E-10.

CN is of the opinion that the liability clause contained in the Agreement does not impose any greater liability than that set out in General Order No. E-10.

Alliance requests that the Agency include the liability as specified in General Order No. E-10.

Alliance advises that it requires leave to cross in perpetuity or until relocation or removal of the utility crossing is ordered by the Agency or its successors. It contends that unless these clauses are included in the Agency Order, the Agreement itself does not guarantee a permanent right to cross the railway right of way. It further requests that the Agency include the legal land description in the order.

CN states that it may offer an easement in perpetuity upon the sale of a line of its railway when the sale is made to someone who does not wish to continue the operation of a railway. Also, CN is studying the possibility of broadening the offer of easements in perpetuity in cases other than the sale of its rights of way to non-operators.

Alliance states that the consequences of the potential abandonment and sale of the railway are very important. Alliance agrees with the provision of the Agreement, "If a Disposition is to a person other than a railway, such Disposition shall be conditional upon the Railway or that person granting to the Company an easement or right of way agreement. The company shall pay the Grantor reasonable compensation based on market value for, and the Company shall be responsible for all costs of effecting such easements or right of way agreements such as, without restriction, survey and registration expenses."

Alliance objects to the clauses referring to removal and alterations of the pipeline. Portions of the Agreement indicate notification periods of 90 days or less should it become necessary for the pipeline to be relocated or altered. Further, these clauses specify that the relocation and alterations of the pipeline would be at Alliance's cost. Alliance states that it would need a minimum of one year's notice prior to accommodating any relocation or alteration; in fact, a two-year notice is recommended. Furthermore, Alliance does not agree to accept the sole cost of any future relocation or alteration that is required. According to Alliance, the issue of costs should be settled if and when relocations or alterations are deemed necessary.

ANALYSIS AND FINDINGS

The Agency has reviewed the positions of the parties and has determined that compensation in the form of either annual or documentation fees to CN is not warranted as no real or appreciable damage to the lands of the railway company has been demonstrated.

However, the Agency is of the opinion that CN should be entitled, when required, to appoint an inspector to supervise the railway works and the wages and expenses of such an inspector should be paid by Alliance upon receipt of a statement showing in reasonable detail the particulars of such wages and expenses. Should the parties be unable to agree on the necessity and the work of the inspector or on the particulars of the wages or expenses as detailed in the invoice, an application may be made to the Agency for a determination on the matter.

With respect to the issue of duration of the crossing and the need for notice in the event of relocation or alterations to the pipeline, the Agency notes that a decision issued by the Agency authorizing the construction of a utility crossing at a specific location remains in effect until such time as the decision is amended or rescinded by the Agency or its successor.

In light of the foregoing, the Agency is of the opinion that Alliance should be authorized to construct the utility crossing as shown on Drawing No. 9950-XING-16106 dated November 3, 1999. Any authority granted by the Agency does not relieve Alliance and/or CN of their obligations under the Railway Safety Act, R.S.C., 1985, c. 32 (4th Supp.).

CONCLUSION

Pursuant to subsection 101(3) of the Canada Transportation Act, Alliance is authorized to construct and maintain, at its own expense, the utility crossing as shown on Drawing No. 9950-XING-16106 dated November 3, 1999.

In addition, the Agency has determined that liability shall be as follows:

Every owner of a pipe installed under a railway shall at all times indemnify the company that owns, operates or uses the railway against all loss, cost, damage, injury and expense to which the company may be put by reason of any injury to persons or damage to property caused by the pipe or by any oil, gas, water or any other substance being carried, or by any works provided for in these Regulations, or by the imprudence, neglect or want of skill of the employees or agents of the person who owns the pipe in connection with the laying, maintenance, renewal, repair or removal of the pipe, or the use thereof.