Pipelines present new risks to farmers warns landowners group

Monday, April 20, 2015

by JIM ALGIE

Substantial new penalties for pipeline safety and environmental infractions have a national property rights group warning against a shift in legal responsibility from pipeline operators to land owners.

New regulations following recent amendments to the National Energy Board Act authorize “administrative monetary penalties” (AMPs) of up to $25,000 daily for individuals and $100,000 for companies violating energy board, safety and environmental rules. The fines were designed “to promote compliance with the NEB Act,” says a background paper posted in early April to the board’s website.

Dave Core, CEO of Canadian Association of Energy and Pipeline Landowners Associations (CAEPLA), warned in an interview, Monday, the penalty process could actually impose new restrictions on, and responsibilities for, agricultural operators and pipeline land owners.

“This is pretty scary stuff,” Core said by phone from Regina. “Basically, if you have a pipeline on your farm now it could split your farm in two,” he said. “It could make it very costly for you to cultivate because you may be told you can’t cross the pipelines.”

NEB regulations could lead to new restrictions on agricultural operations even where pre-existing easements for pipeline operations guarantee the availability to landowners of “normal farming practices over the pipe,” he said. The situation coincides with the increasing age and deterioration of existing pipeline infrastructure, Core said.

CAEPLA is a Regina-based, non-profit organization and speaks for affiliated groups in Alberta, Saskatchewan, Manitoba, New Brunswick and Ontario.  It also negotiates pipeline agreements for landowner groups.

Core is a former Sarnia-area farmer who cropped land over pipelines for 13 years beginning in 1993 and grew up on a similar pipeline farm nearby. A founding member of CAEPLA, he became active on the issue as part of an unsuccessful class action law suit seeking compensation for lost rights over pipeline lands.

In that case, appeal court judges concluded property owners had no recourse except under the National Energy Board Act. After selling his Ontario farm in 2006, Core moved to Regina to head the national group.

The new process eliminates protections available to land owners under a pre-existing system of prosecution for National Energy Board Act violations, London, Ont. lawyer John Goudy said in an interview. Goudy also farms near London and grew up on a family farm that included a pipeline easement. He is part of the law firm, Scott Petrie LLP.

Goudy’s legal practice includes a large component of pipeline landowner complaints. He agrees with Core that the administrative penalty process raises new risks for landowners.

“The change is that now there doesn’t have to be an order from an inspector or the NEB. If the board determines that a land owner or any other person . . . has failed to comply with any part of the National Energy Board Act or regulations then they can issue a notice of violation and basically it’s like issuing a fine,” Goudy said.

“I hope landowners are not the real target of administrative monetary penalties,” he said. “The problem is the NEB hasn’t distinguished between anybody so the pipeline land owners are exposed,” Goudy said.

The new process eliminates existing defenses of “due diligence” or honest mistake and could lead to abuse by pipeline operators or their employees in disputes with landowners, he said. The only appeal process involves review by the energy board itself.

“All it takes is for a pipeline company employee who isn’t getting along with a landowner to make an allegation about a land owner having done something that is a technical violation,” Goudy said. He referred specifically to cultivation to a depth greater than 12 inches and the use of equipment “the company says is too heavy.”

An NEB spokesperson could not be reached for direct reaction to landowner criticism. However, an NEB information for landowners brochure shows agricultural exemptions for crossing a pipeline right-of-way in four circumstances: where the activity “does not disturb more than 30 cm (12 inches) of top soil;” it does not add or remove soil; loaded axle weights and tire pressures are within the manufacturers’ approved levels; or soil conditions are such that minimal rutting occurs.

NEB documents also show as many as 122 “unauthorized activities” annually on pipeline lands in recent years, including 32 in Ontario during 2014. Although the bulk of those incidents involved contractors, landowners accounted for 30 reports in 2014, the documents show.

The land owners brochure also describes monetary penalties as “a last resort” to be used only in “extreme conditions.” A schedule of penalties assessed since Feb. 6, 2014 includes 13 entries, all of which appear to involve pipeline operating companies. Listed fines range from $16,000 to $100,000 for a total of $681,000 and a variety of infractions.

Landowner activism is growing in the wake of recent, controversial pipeline proposals in the United States and Canada, Core said. Grafton-area farmer Dan Walker reached a settlement recently with Enbridge Inc. over benzene contamination of pasture land on a pipeline right of way east of Toronto.

Walker says chemicals in the soil disrupted normal reproduction among his beef cow herd. Walker helps CAEPLA advocate for Ontario land owners facing current proposals for new, TransCanada Corp. pipelines in the province.

Walker acquired the 96-acre parcel where he farms in 2006 and worked to establish a cow/calf operation. However, cows pastured on the pipeline easement experienced unusual rates of failed conception and still-born calves. The land includes a single right of way for three separate pipelines operated by three different companies transporting crude oil, natural gas and refined petroleum, respectively.

After hundreds of hours of research and lobbying, a neighbourhood coalition, a CTV news investigation in the region and “some pretty nasty threats” on Walker’s part, Enbridge agreed six weeks ago to conduct environmental site assessment work on his land, Walker said.

“When I kind of figured everything out, I’m slowly getting back into it,” he said in a phone interview. “I just can’t keep them (livestock) up on the pipeline . . . until Enbridge gets done what they’re going to do with the easement.”

He compares his pipeline struggles with conflicts in the long-running, 1980s-era, television program, Dallas, with him in the role of the perpetual victim of cut-throat villain, J. R. Ewing.
“Until you get involved with it you never would believe it,” said Walker, who plans to continue slowly rebuilding his herd. BF