Canada’s biggest pipelines were ordered Thursday to increase their recognized environmental cleanup liabilities by a collective C$1.5 billion.

The National Energy Board (NEB) made the directive in a ruling on projected costs for eventually shutting down and safely abandoning the companies’ 61,189 kilometers (36,713 miles) of lines.

Landowners whose property is crossed by rights-of-way have raised legitimate concerns over the industry’s preference for emptying out discarded pipelines and leaving the steel in the ground, according to the 114-page decision. The NEB directed the natural gas and oil transporters to make their cleanup liabilities include digging up and removing 20% of pipelines that traverse agricultural land.

The companies proposed to leave all pipe in the ground. Irate landowners, who banded together in a national association to resist the industry plan, demanded removal of 100% of the pipe under agricultural property.

The ruling is the latest step in a marathon case initiated by the NEB to ensure that enough funds are available for satisfactory cleanups as the aging Canadian pipeline network eventually reaches the end of its useful life.

Launched in 2008, the regulatory project is intended to make sure that both the board and the pipeline industry keep current with rising standards of assessing environmental liabilities and covering the costs.

The next step in the process will be to collect and approve corporate plans for raising the money to pay for projected pipeline abandonments. The companies are expected to propose tacking environmental liability surcharges onto tolls, with the extra charges deposited into special cleanup accounts.

Forecasts that the companies submitted to the NEB for complying with a 20% pipe removal rule show that it makes their collective abandonment liability rise to C$6.4 billion. If all discarded pipe were left in the ground, the total would be C$4.9 billion.

The cleanup estimates presented to date for the 10 pipelines affected by the stiffened standard for abandonments under agricultural land are:

The NEB case covers only the Canadian portions of international delivery routes and not the long stretches of pipeline that they also have reaching out to export destinations in the United States.

About 80% of the Canadian pipe carries natural gas in 48,650 kilometers (29,190 miles) of lines, while 12,538 kilometers (7,523 miles) transport oil and refined products.

The NEB’s agenda calls for reviews of the big pipelines’ abandonment liabilities every five years. “Future developments in research, technology, information sharing and actual abandonment experience will lead to greater precision in the estimation of costs,” the board said.

The NEB also urged the pipelines to make its prediction come true by co-operating with one another and with landowners on technical and community issues raised by eventual abandonment of discarded routes.

The new decision emphasizes a rule established by the first round of hearings in the marathon environmental liability case during 2008: “One of the key principles…was that landowners will not be liable for the costs of pipeline abandonment. The board reiterates its commitment to this principle.”

On top of the big added cost item of removing substantial stretches of pipe from agricultural land, the NEB ordered the industry to accept a less expensive but far longer lasting obligation towards property owners along their rights-of-way: permanent monitoring for slow-developing environmental problems wherever pipe is left in the ground.

“There remains a potential to discover contamination post-abandonment,” the decision said. The NEB directed all of the big pipeline companies to “make financial provision for perpetual monitoring and perpetual remediation where pipelines are abandoned in place.”

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