Part A, Step 3 of the 2021 ACE Calculation Method

Pipeline Abandonment Activity Costs

In Part A, Step 3 of the 2021 Abandonment Cost Estimate (ACE) Calculation Method, the expected costs to abandon a company’s operatingFootnote 1 and decommissioned pipelines are calculated.

The 2021 ACE Calculation Method has seven cost categories for estimating these costs. The Commission established unit costs (Base Case 2021) for each cost category.

Learn more about each cost category, the associated Base Case 2021 unit costs, and the calculation method used for each below:

  • Land Access cost category

    Description of cost category

    • Access rights and permits
    • Establishing temporary workspaces
    • Surveying activities
    • GIS updates
    • Discharge rights

    Calculation method and finding this calculation in an ACE

    Land Access costs are reported in the first row of the table in Part A, Step 3 of an ACE. The table provides a breakdown of these costs by pipeline diameter categoryFootnote 2, and the total cost for the category. If a company does not have operating and decommissioned pipelines in particular pipeline diameter categories, those categories are not shown in the table.

    The calculations for the Land Access cost category use the actual total lengths, in kilometers (km), of operating and decommissioned pipelines, as reported for each pipeline diameter category and commodity type shown in the third column of the land use category tables in Part A, Step 1 of an ACE.

    1. For each pipeline diameter category, the actual lengths of pipeline reported in the land use category tables for all commodity types are summed. These values are reported in Part A, Step 3 of the ACE.
    2. Then, for each pipeline diameter category, the applicable Base Case 2021 unit cost (in $/km, as shown in the table below) is multiplied by the total actual pipeline length for that pipeline diameter category.
      Pipeline diameter categories and associated base case 2021 unit costs.
      ACE pipeline diameter category Base Case 2021 unit costs ($/km)
      Land Access cost category
      Very small diameter pipe (not steel) $4,000
      Very small diameter pipe (steel) $4,000
      Small diameter pipe $4,000
      Medium diameter pipe $4,000
      Large diameter pipe $4,000
    3. The sub-total costs by pipeline diameter category are then summed to obtain the total Land Access costs.

    Refer to this example ACE to see where Land Access costs are reported in an ACE.

  • Pipeline Purging and Cleaning cost category

    Description of cost category

    • Mobilization and demobilization of equipment and personnel
    • Emptying pipeline of service fluids
    • Pipeline pigging, cleaning and purging in a manner that leaves no mobile materials remaining in the pipelines
    • Pipeline cleanliness verification via laboratory testing and analysis
    • Storage and disposal of wastes

    Calculation method and finding this calculation in an ACE

    Costs for the Pipeline Purging and Cleaning cost category are reported by commodity type in the second, third and fourth rows of the table shown in Part A, Step 3 of an ACE. For each commodity type, the table provides a breakdown of Pipeline Purging and Cleaning costs by pipeline diameter categoryFootnote 2 and a total cost. If a company does not have operating and decommissioned pipelines in particular pipeline diameter categories, those categories are not shown in the table.

    The calculations for the Pipeline Purging and Cleaning cost category use the actual total lengths (in km) of operating and decommissioned pipeline reported for each pipeline diameter category and commodity type in the third column of the land use category tables in Part A, Step 1 of an ACE.

    1. For each pipeline diameter category and commodity type, the actual lengths of pipeline reported in the land use category tables are summed. These values are reported in Part A, Step 3 of the ACE.
    2. Then, for each pipeline diameter category and commodity type, the applicable Base Case 2021 unit cost (in $/km, as shown in the table below) is multiplied by the total actual pipeline length for that pipeline diameter category and commodity type.
      Base Case 2021 unit costs ($/km) for Pipeline Purging and Cleaning by ACE pipeline diameter category and commodity.
      ACE pipeline diameter category Base Case 2021 unit costs ($/km)
      Pipeline Purging and Cleaning cost category
      Oil Gas Other commodity
      Very small diameter (not steel) $3,000 $2,500 $2,500
      Very small diameter (steel) $3,000 $2,500 $2,500
      Small diameter $5,000 $4,000 $4,000
      Medium diameter $8,000 $7,000 $7,000
      Large diameter $12,000 $10,000 $10,000
    3. The sub-total costs by pipeline diameter category are then summed to obtain the total Pipeline Purging and Cleaning costs and commodity type.

    Refer to this example ACE to see where Pipeline Purging and Cleaning costs are reported in an ACE.

  • Abandonment in Place cost category

    Description of cost category

    • Mobilization and demobilization of equipment and personnel
    • Excavation of pipelines and appurtenances where necessary to conduct abandonment activities (includes topsoil stripping)
    • Cutting, capping, and effectively sealing the pipelines
    • Segmentation to prevent water movement and mitigate water conduit effects
    • Removal of underground appurtenances (e.g., cathodic protection)
    • Backfill and compaction of disturbed soils

    Calculation method and finding this calculation in an ACE

    Abandonment in Place costs for pipelines are reported in the fifth row of the table shown in Part A, Step 3 of an ACE. The table provides a breakdown of these costs by pipeline diameter categoryFootnote 2 and the total cost for the category. If a company does not have operating and decommissioned pipelines in particular pipeline diameter categories, those categories are not shown in the table.

    The calculations for this cost category use the lengths of pipeline assumed to be abandoned in place for each pipeline diameter category, as determined in Part A, Step 1 of the 2021 ACE Calculation Method and reported in the sixth column of the land use category tables in that step.

    1. For each pipeline diameter category, the lengths of operating and decommissioned pipeline (in km) assumed to be abandoned in place are summed. These values are reported in Part A, Step 3 of the ACE.
    2. Then, for each pipeline diameter category, the applicable Base Case 2021 unit cost ($/km, as shown in the table below), is multiplied by the total length of pipeline assumed to be abandoned in place for that pipeline diameter category.
      Base Case 2021 unit costs ($/km) Abandonment in Place cost category
      ACE pipeline diameter category Base Case 2021 unit costs ($/km)
      Abandonment in Place cost category
      Very small diameter (not steel) $5,000
      Very small diameter (steel) $10,000
      Small diameter $12,000
      Medium diameter $17,000
      Large diameter $20,000
    3. The sub-total costs by pipeline diameter category are then summed to obtain the total Abandonment in Place costs.

    Refer to this example ACE to see where Abandonment in Place costs are reported in an ACE.

  • Pipeline Removal cost category

    Description of cost category

    • Mobilization and demobilization of equipment and personnel
    • Removal of buildings and equipment
    • Right-of-way clearing
    • Topsoil stripping
    • Excavation of pipelines and appurtenances (including cathodic protection)
    • Cutting and capping of pipelines
    • Stockpiling, loading, hauling, and disposal of removed pipelines, buildings, and equipment 
    • Backfill and compaction of disturbed soils

    Calculation method and finding this calculation in an ACE

    Costs for the Pipeline Removal cost category are presented in the sixth row of the table in Part A, Step 3 of an ACE. The table provides a breakdown of these costs by pipeline diameter categoryFootnote 2 and the total cost for the category. If a company does not have operating and decommissioned pipelines in particular pipeline diameter categories, those categories are not shown in the table.

    The calculations for this cost category use the lengths of pipeline assumed to be removed for each pipeline diameter category, as determined in Part A, Step 1 of the 2021 ACE Calculation Method and reported in the seventh column of the land use category tables in that step.

    1. For each pipeline diameter category, the lengths of operating and decommissioned pipeline (in km) assumed to be removed are summed. These values are reported in Part A, Step 3 of the ACE.
    2. Then, for each pipeline diameter category, the applicable Base Case 2021 unit cost ($/km, as shown in the table below), is multiplied by the total length of pipeline assumed to be removed for that pipeline diameter category.
      Base Case 2021 unit costs ($/km) Pipeline Removal cost category
      ACE pipeline diameter category Base Case 2021 unit costs ($/km)
      Pipeline Removal cost category
      Very small diameter (not steel) $12,000
      Very small diameter (steel) $30,000
      Small diameter $80,000
      Medium diameter $200,000
      Large diameter $350,000
    3. The sub-total costs by pipeline diameter category are then summed to obtain the total Pipeline Removal costs.

    Refer to this example ACE to see where Pipeline Removal costs are reported in an ACE.

  • Remediation cost category

    Description of cost category

    • Remediation of contaminated soil, sediment and/or groundwater, where necessary, including monitoring and testing.
    • Includes, but is not limited to: excavation, hauling, and disposal of contaminated soil; backfilling; field sampling and analytical testing; and follow-up monitoring.

    Calculation method and finding this calculation in an ACE

    Costs for the Remediation cost category are reported by commodity type in the seventh, eighth and ninth rows of the table shown in Part A, Step 3 of an ACE. For each commodity type, the table provides a breakdown of Remediation costs by pipeline diameter categoryFootnote 2 and a total cost. If a company does not have operating and decommissioned pipelines in particular pipeline diameter categories, those categories are not shown in the table.

    The calculations for the cost category use the actual total lengths (in km) of operating and decommissioned pipeline reported for each pipeline diameter category and commodity type in the third column of the land use category tables in Part A, Step 1 of an ACE.

    1. For each pipeline diameter category and commodity type, the actual lengths of pipeline reported in the land use category tables are summed. These values are reported in Part A, Step 3 of the ACE.
    2. Then, for each pipeline diameter category and commodity type, the applicable Base Case 2021 unit cost (in $/km, as shown in the table below) is multiplied by the total actual pipeline length for that pipeline diameter category and commodity type.
      Base Case 2021 unit costs ($/km) Remediation cost category.
      ACE pipeline diameter category Base Case 2021 unit costs ($/km)
      Remediation cost category
      Oil Gas Other commodity
      Very small diameter (not steel) $10,000 $5,000 $5,000
      Very small diameter (steel) $10,000 $5,000 $5,000
      Small diameter $10,000 $5,000 $5,000
      Medium diameter $10,000 $5,000 $5,000
      Large diameter $10,000 $5,000 $5,000
    3. The sub-total costs by pipeline diameter category and commodity type are then summed to obtain the total Remediation costs.

    Refer to this example ACE to see where remediation costs for pipelines are reported in an ACE.

  • Reclamation and Restoration cost category

    Description of cost category

    • Assess, reclaim and restore the ground surface (e.g., soil, vegetation) for the length of the pipeline right-of-way (not just at areas disturbed during abandonment activities) to equivalent land use of adjacent lands (or other relevant reclamation objective such as critical habitat for specified wildlife species at risk, landowner requests, Indigenous cultural values, etc.)
    • Alleviate any noted soil and/or vegetation issues (e.g., sub-soil compaction, subsidence)
    • Seeding
    • As relevant, planting of trees and shrubs to restore critical habitat for wildlife species at risk and implementing access control measures
    • Erosion control measures
    • Weed control
    • Monitoring (e.g., up to five years) to confirm reclamation objectives are met

    Calculation method and finding this calculation in an ACE

    There are two costs in the Reclamation and Restoration cost category:

    • reclamation and restoration costs for pipeline lengths assumed to be abandoned in place; and
    • reclamation and restoration costs for pipeline lengths assumed to be removed.

    Costs for each are reported in the tenth and eleventh rows of the table shown in Part A, Step 3 of an ACE. The table provides a breakdown of the costs by pipeline diameter categoryFootnote 2 and the total cost. If a company does not have operating and decommissioned pipelines in particular pipeline diameter categories, those categories are not shown in the table.

    The calculations for this cost category use the lengths of pipeline assumed to be abandoned in place and removed for each pipeline diameter category, as determined in Part A, Step 1 of the 2021 ACE Calculation Method, and are reported in the sixth and seventh columns respectively of the land use category tables in that step.

    1. For each pipeline diameter category, the lengths of operating and decommissioned pipeline (in km) assumed to be abandoned in place are summed. These values are reported in Part A, Step 3 of the ACE.
    2. For each pipeline diameter category, the lengths of operating and decommissioned pipeline (in km) assumed to be removed are summed. These lengths are found in Part A, Step 3 of the ACE.
    3. Then, for each abandonment method and pipeline diameter category, the applicable Base Case 2021 unit cost (in $/km, as shown in the table below) is multiplied by the applicable total assumed pipeline length.
      Base Case 2021 unit costs ($/km) for Pipeline Purging and Cleaning by ACE pipeline diameter category and commodity.
      ACE pipeline diameter category Base Case 2021 unit costs ($/km)
      Reclamation and Restoration cost category
      Abandonment in Place Pipeline Removal
      Very small diameter (not steel) $10,000 $30,000
      Very small diameter (steel) $10,000 $30,000
      Small diameter $10,000 $40,000
      Medium diameter $10,000 $55,000
      Large diameter $10,000 $70,000
    4. Sub-total costs by pipeline diameter category are then summed to obtain the total Reclamation and Restoration costs for pipelines assumed to be abandoned in place and removed, respectively.

    Refer to this example ACE to see where Reclamation and Restoration costs for pipelines are reported in an ACE.

  • Special Treatment cost category

    Description of cost category

    • Cutting, capping, and filling pipelines with appropriate material (e.g., concrete), where needed, at water, road, and railway crossings

    Calculation method and finding this calculation in an ACE

    Costs for the Special Treatment cost category are reported by crossing type in the twelfth, thirteenth and fourteenth rows of the table shown in Part A, Step 3 of an ACE. For each crossing category, the table provides a breakdown of Special Treatment costs by pipeline diameter categoryFootnote 2 and a total cost. If a company does not have operating and decommissioned pipelines in particular pipeline diameter categories, those categories are not shown in the table.

    The calculations for the Special Treatment cost category use the number of crossings assumed to have special treatment applied for each crossing category and pipeline diameter category in the fifth column of the crossing categorization tables in Part A, Step 2 of an ACE.

    1. For each crossing type and commodity type, the number of crossings assumed to have special treatment are summed. These values are reported in Part A, Step 3 of the ACE.
    2. Then, for each crossing type and pipeline diameter category, the applicable Base Case 2021 unit cost (in $/crossing, as shown in the table below) is multiplied by the applicable assumed number of crossings.
      Base Case 2021 unit costs ($/crossing) Special Treatment cost category
      ACE pipeline diameter category Base Case 2021 unit costs ($/crossing)
      Special Treatment cost category
      Water Crossings Road Crossings Railway Crossings
      Very small diameter (not steel) $20,000 $10,000 $10,000
      Very small diameter (steel) $20,000 $10,000 $10,000
      Small diameter $40,000 $35,000 $35,000
      Medium diameter $80,000 $50,000 $50,000
      Large diameter $120,000 $75,000 $75,000
    3. The sub-total costs by pipeline diameter category are then summed for each crossing category to obtain the total Special Treatment costs.

    Refer to this example ACE to see where Special Treatment costs are reported in an ACE.

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