ARCHIVED - Northern Pipeline Agency Canada - Report

• Previous Page
• Table of Contents
• Next Page

This page has been archived.

Commissioner’s Message

It is my pleasure to present the 2011-2012 Report on Plans and Priorities for the Northern Pipeline Agency (the Agency).

The Agency was established by the Northern Pipeline Act (the Act) in 1978 to facilitate the planning and construction by Foothills Pipe Lines Limited (Foothills) of the Canadian portion of the Alaska Highway Gas Pipeline Project and to maximize social and economic benefits from its construction and operation while minimizing any adverse effects. The pipeline, also referred to as the Alaska Natural Gas Transportation System (ANGTS), was certificated in 1978 under the Act to transport Alaskan and possibly northern Canadian natural gas to southern markets in Canada and the United States (U.S.).

The southern portion of the pipeline was constructed in the early 1980s and presently transports Canadian gas sourced from south of the 60th parallel. Unfavourable economic conditions led to delays in the completion of the northern portion of the pipeline. In 2008, TransCanada PipeLines Ltd. (TCPL), which now owns Foothills, was granted a license by the State of Alaska to pursue the development of Stage Two (the northern section) of the pipeline and partnered with ExxonMobil in 2009 to form the Alaska Pipeline Project (APP). The APP is continuing to develop the technical and commercial aspects of the Project. Accordingly, the Agency has been taking measures to implement the provisions of the Northern Pipeline Act andthe Canada-U.S. Agreement on Principles Applicable to a Northern Natural Gas Pipeline (the Agreement).

During the period of this report, the Agency will continue to work together with other federal agencies, provincial and territorial governments, Aboriginal organizations and the public to meet the objectives of the Act.

 

Section I - Departmental Overview

Raison d'être and Responsibilities

The Northern Pipeline Agency was created by the Northern Pipeline Act (the Act) in 1978 to carry out Canada’s responsibilities in respect of the planning and construction by Foothills of the Canadian portion of ANGTS. Also referred to as the Alaska Highway Gas Pipeline Project (AHGPP), the project is the subject of the 1977 Agreement between Canada and the United States of America on Principles Applicable to a Northern Natural Gas Pipeline (the Agreement).
The first stage of the Project (the Prebuild) was constructed in the early 1980s for the initial purpose of transporting gas sourced from Western Canada to the U.S. The current flow capacity of the Prebuild is approximately 3.3 billion cubic feet (bcf) per day.

Unfavourable economic conditions from the mid-1980s to the beginning of the last decade led to indefinite delays in the completion of the ANGTS and a prolonged period of low activity for the Agency. In 2008, TransCanada Alaska PipeLines was selected by the State of Alaska under the Alaska Gasline Inducement Act to receive up to $500 million (M) in State assistance to pursue an Alaska gas pipeline. The large-scale project would transport 4-5 bcf per day of natural gas in a buried 48-inch, high-pressure pipeline from Prudhoe Bay to markets in Canada and the lower 48 states. Project costs have been estimated at $32-41 billion (B) by TransCanada PipeLines Limited (TransCanada).

Stage Two of the Project in Canada would comprise approximately 1,555 km of pipeline from the Yukon-Alaska border near Beaver Creek to the B.C.-Alberta border near Boundary Lake, as defined by the certificates of public convenience and necessity (CPCNs) granted under the Act. Additional pipeline construction in Alberta (Stage Three) may also be required.

TransCanada has communicated its intention to proceed with planning for Stage Two of the Project to the Agency, along with a Project timeline. In 2010, with the approval of the U.S. Federal Energy Regulatory Committee (FERC), TransCanada sought bids from shippers to determine the level of commercial interest in the Project. TransCanada also undertook a number of field studies in 2009-2010 and is conducting further studies in 2011. Accordingly, the Agency is carrying out its responsibilities under the Act by working with federal agencies, provincial and territorial governments, First Nations, the public, the United States, and TransCanada. It has increased its capacity to carry out the required work.

Under the Act, the Agency can be called upon to undertake a number of activities:

• Facilitate the efficient and expeditious planning and construction of the pipeline, taking into account local and regional interests, the interests of the residents, particularly of the native people, and recognizing the responsibilities of the Government of Canada and other governments, as appropriate, to ensure that any native claim related to the land on which the pipeline is to be situated is dealt with in a just and equitable manner;

• Facilitate, in relation to the pipeline, consultation and coordination with the governments of the provinces, the Yukon Territory, and the Northwest Territories;

• Maximize the social and economic benefits from the construction and operation of the pipeline while at the same time minimizing any adverse effect on the social and environmental conditions of the areas most directly affected by the pipeline; and

• Advance national economic and energy interests and maximize related industrial benefits.

Strategic Outcome and Program Activity Architecture (PAA)

The Agency has a single strategic outcome and a single program activity. Both are aligned with the Government of Canada’s Strong Economic Growth outcome as per the Whole-of-Government Framework.

Agency Strategic Outcome

The planning and construction of the Canadian portion of the Alaska Highway Gas Pipeline Project is efficient and expeditious while ensuring environmental protection and social and economic benefits for Canadians.

Agency Program Activity

Oversee and regulate the planning and construction of the Canadian portion of the Alaska Highway Natural Gas Pipeline Project.

[D]

Planning Summary

Financial Resources ($000s)

2011–12	2012–13	2013–14
1,328.1	1,328.1	1,328.1

 

Human Resources (Full-time Equivalent – FTE)

2011–12	2012–13	2013–14
5	6	6

 

Strategic Outcome 1 : The planning and construction of the Canadian portion of the Alaska Highway Gas Pipeline Project is efficient and expeditious while ensuring environmental protection and social and economic benefits for Canadians.

Performance Indicator	Targets
The Agency effectively plans for and responds to regulatory filings by Foothills and makes certain that the Act is properly administered.	Timely responses with consideration to the overall Project plans and schedules, continuing operations as mandated, and readiness to respond to increasing levels of project activity.
The Agency continues to address regulatory certainty by determining an environmental assessment and regulatory review framework within a timeline that corresponds with industry decisions on the project.	A regulatory framework that accommodates modern environmental practices and keeps pace with Project timelines.
The Agency refines its plans and state of readiness to respond and to enhance its engagement with other participants that would be involved in the planning and construction of this phase of pipeline development.	Development and implementation of a future-oriented business plan that takes into consideration associated resource requirements.
The Agency increases public awareness of its work, its status and its operations with regard to the Project.	Plans and tools that support enhanced communication and outreach.
The Agency effectively plans for and carries out Crown consultation with Aboriginal people.	Responsibilities related to Aboriginal consultations are met.

Program Activity	Forecast Spending 2010–11	Planned Spending			Alignment to Government of Canada Outcomes
		2011–12	2012–13	2013–14
Oversee and regulate the planning and construction of the Canadian portion of the Alaska Highway Natural Gas Pipeline Project.	1,231.2	1,238.1	1,238.1	1,238.1	These activities are aligned to the Strong Economic Growth outcome.
Total Planned Spending		1,238.1	1,238.1	1,238.1

Program Activity	Forecast Spending 2010–11	Planned Spending
		2011–12	2012–13	2013–14
Administrative support	90	90	90	90

Total planned spending does not include the planned spending for internal services.

Contribution of Priorities to Strategic Outcome

The following chart outlines the operational priorities of the Agency for the reporting period and the ways in which they contribute to the overall strategic outcome.

Operational Priorities	Type	Links to Strategic Outcome	Description
To effectively administer the Act and establish the framework to respond to the reactivation of the pipeline project.	ongoing	The planning and construction of the Canadian portion of the Alaska Highway Gas Pipeline project is efficient and expeditious while ensuring environmental protection and social and economic benefits for Canadians.	Why: To meet obligations under the Agreement and implement the Act Plan: The Agency will work with the federal, provincial and territorial governments, the U.S., First Nations, and TransCanada.
To develop a modern environmental and regulatory review framework	ongoing		Why: To ensure that the pipeline is planned and built according to modern environmental and regulatory standards Plans: The Agency will develop an approach for a modern review of updated environmental and socio-economic information as well as regulatory filings.
To develop an outreach plan taking into account the interests of all stakeholders with emphasis on communities along the pipeline route.			Why: To increase awareness of the Agency and its operational status in relation to the Project Plan: The Agency will carry out communications activities attuned to Project timelines and milestones.
To develop Aboriginal consultation plans related to the planning and construction of the Project	ongoing		Why: To meet obligations in regards to Aboriginal consultation Plans: The Agency will engage, consult with and, where necessary, accommodate in relation to the pipeline.

Management Priorities	Type	Links to Strategic Outcome	Description
To ensure the NPA has sufficient resources to carry out its responsibilities, including those related to its regulatory responsibilities and intergovernmental and Aboriginal relations.	ongoing	The planning and construction of the Canadian portion of the Alaska Highway Gas Pipeline project is efficient and expeditious while ensuring environmental protection and social and economic benefits for Canadians.	Why: To meet obligations related to the Project and to all parties Plan: Conduct forward business planning to assess future resource requirements.

Risk Analysis

The Agency is faced with uncertainties associated with planning for a single large-scale international pipeline project. The Agency identifies and responds to these uncertainties by continuous corporate-level forecasting, tracking, and management of issues that could affect or require a response from the Agency. For fiscal year 2011-2012, the Agency will continue to ramp up activities and human resource levels in anticipation of Stage Two of the Project in Canada. The Agency will proceed in a compressed time frame and will work to minimize uncertainties posed by environmental and socio-economic considerations that have transpired since the Act came into force. Failure to make timely preparations could jeopardize the Government of Canada’s performance of its responsibilities under the Agreement and the Act.

Expenditure Profile

The graph below illustrates the general spending trend since the 2008-09 fiscal year and the forecast spending for 2011-12 and beyond. The increase from 2008 to 2010 depicted in the graph is attributable to the increase in Agency activities as required by the revival of Stage Two of the Alaska Pipeline Project in Canada. The increase from 2010-11 to 2011-12 and following years is related to a EBP adjustment of $6,950.

Changes in the project proponent’s plans and activities could lead to material differences between planned and actual spending in future.

[D]

Estimates by Vote

For information on our organizational votes and/or statutory expenditures, please see the 2011-12 Main Estimates publication. An electronic version of the Main Estimates is available at
http://www.tbs-sct.gc.ca/est-pre/20112012/me-bpd/toc-tdm-eng.asp.

• Previous Page
• Table of Contents
• Next Page