Vol. 151, No. 7 — February 18, 2017

Order Adding Toxic Substances to Schedule 1 to the Canadian Environmental Protection Act, 1999

Statutory authority

Canadian Environmental Protection Act, 1999

Sponsoring departments

Department of the Environment
Department of Health

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Order.)

Issues

The Government of Canada (the Government) has conducted a screening assessment of natural gas condensates, (see footnote 1) hereafter referred to as NGCs, to determine whether the substances could constitute a danger to the environment or human health in Canada. (see footnote 2) The assessment determined that NGCs met one or more of the criteria under section 64 of the Canadian Environmental Protection Act, 1999 (CEPA). Therefore, the Government is proposing to add NGCs to the List of Toxic Substances in Schedule 1 of CEPA.

Background

The Chemicals Management Plan (CMP) is a governmental program that aims to assess and manage chemical substances that may be harmful to human health or the environment. NGCs were determined to be a priority for assessment under the CMP.

Substance description, use profile and sources of release

NGCs are complex combinations of hydrocarbons that condense or are separated from the gaseous phase into the liquid phase as follows: during oil and gas production at wellheads; in natural gas processing plants; in gas pipelines for production, gathering, transmission and distribution; and in straddle plants along the main gas pipelines. They consist of hydrocarbons mostly falling within, but not necessarily spanning, a carbon range of C2 to C30, with predominant hydrocarbons typically falling between C5 and C15, and are considered to be of Unknown or Variable composition, Complex reaction products or Biological materials (UVCBs).

Though NGCs can be produced at both oil and natural gas extraction sites, NGC production is mainly associated with natural gas. In Canada, natural gas is produced in several regions, most notably the Western Canada Sedimentary Basin, which includes Alberta, as well as parts of northeastern British Columbia and western Saskatchewan. Other natural gas production fields are found in Southern Ontario, a small region of New Brunswick, southeast Yukon and the Northwest Territories. Offshore natural gas production is located off the east coast of Nova Scotia.

The major use of NGCs in Canada is as a diluent to reduce the density and viscosity of heavy crude oil or bitumen in order to meet pipeline specifications for transportation. NGCs can also be used as gasoline blending stocks and industrial feedstocks. (see footnote 3) In 2012, information was reported under section 71 of CEPA on three NGCs (Chemical Abstracts Service Registry Nos. 64741-47-5, 64741-48-6 and 68919-39-1). Based on this information, the total quantity manufactured in the year 2010 was between 100 million and 1 billion metric tonnes, the quantity imported was between 100 000 and 1 million metric tonnes and the quantity transported was between 100 million and 1 billion metric tonnes.

NGC evaporative emissions may be released to the environment from storage tanks or during loading or unloading activities. In addition, releases to the environment can be due to spills during the production, storage and transport of NGCs via pipeline, ship, truck and rail. NGCs may also be released to the surrounding marine environment from produced water (see footnote 4) containing NGCs by offshore petroleum facilities, or released via spillage at land-based petroleum facilities. Historical spill data from the upstream energy sector reported to the Alberta Energy Regulator indicates a total of 531 spills of NGCs, with a total volume of approximately 2.2 million litres over a 10-year period (2002–2011).

Existing Canadian and international risk management activities

The Government of Canada has a number of risk management controls in place to prevent spills of NGCs and to minimize their impact when they occur. The transportation of NGCs is regulated under the National Energy Board Act and the Pipeline Safety Act (for onshore pipelines), the Canada Shipping Act, 2001 (for ship transport), the Transportation of Dangerous Goods Act, 1992 (for truck and train transport), and the Railway Safety Act (for train transport). (see footnote 5)

The National Energy Board is responsible for pipelines that cross provincial and international boundaries. In 2013, federal regulations relating to pipeline damage prevention, such as the National Energy Board Onshore Pipeline Regulations, were amended to strengthen requirements for management systems regarding safety, pipeline integrity, security, environmental protection and emergency management. The Pipeline Safety Act, which received royal assent on June 18, 2015, required that new regulations be in place by the Act’s entry into force on June 19, 2016. The updated damage prevention regulations were published in June 2016, which included modernizing regulatory language, building in damage prevention best practices and clarifying safety practices. In addition, the National Energy Board Processing Plant Regulations govern the design, construction, operation and abandonment of certain facilities used for the processing, extraction or conversion of fluids, including natural gas condensates.

The Canada Shipping Act, 2001 deals with pollution prevention, including discharges of petroleum substances during marine transportation, response measures and penalties.

The Transportation of Dangerous Goods Regulations prescribe how dangerous goods, including NGCs, must be classified, the means of containment and safety marks that must be used, as well as the documentation and training requirements to increase safety during handling, offering for transport or transport. The Regulations include requirements for reporting releases or anticipated releases of dangerous goods and dangerous goods that have been lost, stolen or unlawfully interfered with. The Regulations also require an approved Emergency Response Assistance Plan (ERAP) before certain dangerous goods can be transported or imported. Natural gas condensates, which are classified as dangerous goods with UN number UN1268, require an ERAP if they are to be transported or imported in a tank car in a volume exceeding 10 000 L.

Under the Railway Safety Act, the Railway Safety Management System Regulations, 2015 require companies to establish a safety management system for the purpose of achieving the highest level of safety in railway operations. Railway operations may include the transport of various products, including dangerous goods such as petroleum substances. The National Fire Code of Canada, published by the National Research Council of Canada, sets out the minimum requirements for building construction, including storage facilities where NGCs may be stored. The requirements include, among other things, the design or construction of certain elements of facilities related to certain hazards, such as NGCs, as well as the protection measures for the intended use of a building.

In the United States, several regulations pertaining to NGCs have been developed under the National Emission Standards for Hazardous Air Pollutants and New Source Performance Standards programs of the Clean Air Act.

Regulatory requirements include limiting emissions from tanks that store NGCs and detecting and repairing leaks for the upstream and downstream sectors.

Many facilities have also implemented technologies and practices under the Natural Gas STAR program on a voluntary basis. The transportation of substances that may pose a flammability or explosion hazard, including NGCs, is covered under the U.S. Department of Transportation’s Hazardous Materials Regulations.

In Europe, the Directive on industrial emissions (integrated pollution prevention and control), which entered into force in 2013, sets out the main principles for the issuance of permits and the control of installations based on an integrated approach and the application of best available techniques. Operators of industrial installations conducting activities covered by the Directive (including refineries) are required to obtain an environmental permit from the national authority in their country. The European Agreement concerning the International Carriage of Dangerous Goods by Road, the Regulations concerning the International Carriage of Dangerous Goods by Rail, and similar measures for other modes of transportation set out conditions for the international transportation of dangerous goods, including NGCs.

Summary of the assessment

Using available information, a screening assessment was conducted for NGCs to determine whether they meet one or more of the criteria for a toxic substance as defined in section 64 of CEPA. Specifically, the assessment involves determining whether the substances are entering or may enter the environment in a quantity or concentration or under conditions that

Human health assessment results

NGCs can contain a number of substances with potential impacts on human health, including benzene, which has been identified by the Department of Health and several international regulatory agencies as a carcinogen. (see footnote 6) Due to the absence of relevant toxicological studies on NGCs, health effects information on benzene and other petroleum substances that share similar physical-chemical properties with NGCs, such as low boiling point naphthas (LBPNs) and unleaded gasoline, were considered in the assessment to determine whether or not NGCs could pose a risk to human health in Canada.

Considering the existing risk management activities in Canada, the assessment focused on inhalation exposure of the general population living in the vicinity of NGC loading and unloading and storage tank sites.

Long-term exposure. The risk associated with long-term inhalation exposure of the general population to evaporative emissions of NGCs from these areas was characterized by comparing the estimated annual exposure to benzene with the estimates of carcinogenic potency for inhalation of benzene. (see footnote 7) It was determined that current levels of exposure by inhalation over the long term may pose a human health risk to the populations living in the vicinity of high-volume rail or truck NGC loading and unloading sites, and NGC storage sites (with large or small tanks).

Short-term exposure. Characterizing the risk associated with short-term exposure to evaporative emissions of NGCs from storage tanks or transportation involves a comparison of 24-hour exposure estimates of NGCs or benzene with the health effects data identified for benzene and NGCs. This assessment determined that short-term inhalation exposures to evaporative emissions of NGCs in the vicinity of rail loading and unloading sites may be a source of concern to human health.

Conclusion. Based on available information on the composition of NGCs, the carcinogenic nature of benzene, and estimates for inhalation exposures, it was determined that potential exposure levels in Canada may pose a risk to human health for those living in the vicinity of certain high-volume rail or truck NGC loading and unloading sites as well as NGC storage sites. Therefore, the screening assessment concluded that NGCs met the criterion under paragraph 64(c) of CEPA. (see footnote 8)

Ecological assessment results

The approach taken in this ecological assessment was to examine available scientific information and develop conclusions based on a weight-of-evidence approach. The weight-of-evidence approach involves the use of several component lines of evidence to make decisions in all phases of an assessment, including risk characterization. (see footnote 9)

The main sources of exposure to NGCs in the environment are expected to be spills to land and fresh water from transport and onshore oil and gas production, and releases to marine water from offshore oil and gas production.

NGCs are expected to remain in water for relatively short periods of time due to their high volatility. As a result, acute (short-term) toxicity data on lethality or immobilization was considered most relevant to assess the impact of NGCs on aquatic organisms. NGCs have the potential to cause harm to soil organisms, including severe herbicidal effect on plants, decreased plant growth, and impacts on invertebrate reproduction and lethality.

The risk to the environment was predicted based on the number and volume of spills of NGCs using available 2002–2011 spill data for soil and fresh water from the province of Alberta, and offshore spill data from the provinces of Nova Scotia and Newfoundland and Labrador. Annually, there were approximately 50 spills to land and 2 spills to fresh water in Alberta, and approximately one spill to the offshore of the east coast of Canada. Various methods were used to estimate the number of spills annually that are of high enough volume to result in concentrations in soil, fresh water and marine water sufficiently high to result in harm to organisms. It was determined that there is a risk of harm to soil organisms based on the number of spills annually of sufficient size to cause harm. There is also a risk of harm to freshwater organisms, though the number of spills annually to fresh water is lower. Conversely, there is a low risk of harm to marine organisms based on the low number of spills annually of sufficient size to cause harm to the marine environment. (see footnote 10)

Considering all available lines of evidence presented in the ecological assessment, it is determined that NGCs may pose a risk to aquatic and soil organisms near sources of release, but not to the broader integrity of the environment on which life depends. Therefore, the screening assessment concludes that NGCs meet the criterion under paragraph 64(a) of CEPA, but not the criterion under paragraph 64(b) of CEPA.

Publications

On December 31, 2016, the final screening assessment report for NGCs was published on the Government’s Chemical Substances website. Based on the results of the final screening assessment for NGCs, the Minister of the Environment and the Minister of Health (the ministers) have concluded that NGCs meet one or more of the criteria set out under section 64 of CEPA and have therefore recommended the addition of these substances to Schedule 1 of CEPA. (see footnote 11)

Objectives

The objective of the proposed Order Adding Toxic Substances to Schedule 1 to the Canadian Environmental Protection Act, 1999 (the proposed Order) is to enable the Government to propose risk management instruments under CEPA to manage the risks posed by NGCs to the environment and human health, should they be deemed necessary.

Description

The proposed Order would add NGCs (see footnote 12) to Schedule 1 of CEPA (the List of Toxic Substances).

“One-for-One” Rule

The “One-for-One” Rule does not apply, as the proposed Order would not impose any administrative burden on business.

Small business lens

The small business lens does not apply, as the proposed Order would not impose any compliance or administrative costs on small businesses.

Consultation

On October 11, 2014, the ministers published a summary of the draft screening assessment for NGCs in the Canada Gazette, Part I, for a 60-day public comment period. During the 60-day public comment period, comments were received from oil, gas and chemical industry stakeholders, and these were considered during the development of the final screening assessment report for NGCs. A table summarizing the complete set of comments received and the Government’s responses is available on the Chemical Substances website at http://www.ec.gc.ca/ese-ees/default.asp?lang=En&n=7933A3C7-1. The key comments and responses are summarized below.

Overview of public comments and responses

The comments received focused on the methodology used to determine exposure, data gaps and uncertainties in the assessment.

Methodology. Concerns raised regarding methodology centred on the tools used to model exposure and emissions of NGCs. Stakeholders indicated that the modelling tools used were outdated, conservative, imprecise and only took into account benzene as the component of concern in NGCs. Government officials responded that the assessment is based on best available data and focuses on identifying exposure scenarios of potential concern to the general population, rather than on site-specific or processing unit-specific exposure and risk. Despite the use of conservative values, exposures were modelled under conditions that are consistent with other screening assessment reports published under the CMP. Benzene was chosen to represent the highest health concern for long-term exposure to NGCs due to its carcinogenicity. Furthermore, toxicological data on the critical effects (both long- and short-term) of NGC as a whole mixture were not available.

Spill frequency and volume. Stakeholders questioned why spills were examined in the risk determination despite the low proportion of NGCs spilled relative to their production volume. Government officials responded that NGC spills are considered in the assessment because they occur at a high frequency and are the largest source of NGCs released to the environment.

Voluntary spill reduction and risk management. Stakeholders indicated that spill reduction activities should be recognized and efficiencies via synergies with ongoing initiatives should be sought. Government officials responded that the proposed risk management related to the environmental risks identified will focus on practices and technologies available for reducing the occurrence and impact of spills. This will include considering ongoing initiatives, such as those underway at the federal level to strengthen pipeline and railway safety. Stakeholders also questioned the need to include NGCs in federal environmental emergency regulations (the risk management tool currently under consideration). Government officials responded that the addition of NGCs to the Environmental Emergency Regulations would assist in the prevention of accidental releases from fixed facilities and would contribute to the overall objective of reducing the occurrence and impact of spills.

Rationale

NGCs may be released through leaks or spills during their production, processing, and transportation, and from storage. The human health assessment found that over the long term, there could be human health concerns for a portion of the population living near high-volume rail or truck NGC loading and unloading sites, as well as in the vicinity of NGC storage facilities. Short-term inhalation levels of exposures in the vicinity of rail loading and unloading sites were also found to be of potential concern to human health. In addition, the screening assessment concluded that NGCs have the potential to cause harm to aquatic freshwater organisms and to soil organisms based on the volume and frequency of spills, as well as the toxicity of NGCs in these environmental compartments.

Based on information received under the authority of CEPA, and given the human health and environmental concerns associated with NGCs, the screening assessment concluded that NGCs met the human health criterion as defined in paragraph 64(c) of CEPA and the environmental criterion as defined in paragraph 64(a) of CEPA. One of the following measures must be proposed after an assessment is conducted under CEPA:

  1. taking no further action with respect to the substance under the authority of CEPA;
  2. adding the substance to the Priority Substances List for further assessment; or
  3. recommending that the substance be added to the List of Toxic Substances in Schedule 1 of CEPA and, where applicable, recommending the implementation of virtual elimination.

The proposed addition of NGCs to Schedule 1 of CEPA enables the Government to propose risk management instruments to manage the risks to the environment and human health posed by NGCs, and is therefore the preferred option among the three alternatives. The implementation of virtual elimination is not applicable for NGCs. (see footnote 13)

The proposed addition of NGCs to Schedule 1 of CEPA would not result in any incremental impacts (benefits or costs) on the public or industry, since the proposed Order would not impose any compliance requirements on stakeholders. Accordingly, there would be no compliance or administrative burden imposed on small businesses or businesses in general.

If further risk management measures are deemed necessary for NGCs, the Government will assess the costs and benefits and will consult with the public and other stakeholders during the development of any risk management measure to address potential ecological and human health concerns associated with NGCs in Canada.

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a strategic environmental assessment was completed under the CMP. (see footnote 14)

Implementation, enforcement and service standards

The proposed Order would add NGCs to Schedule 1 of CEPA. The final Order would allow the development and publication of regulations or instruments under CEPA if such actions are deemed necessary. It is not necessary to develop an implementation plan or a compliance strategy or to establish service standards for this proposed Order.

Contacts

Greg Carreau
Program Development and Engagement Division
Department of the Environment
Gatineau, Quebec
K1A 0H3
Substances Management Information Line:
1-800-567-1999 (toll-free in Canada)
819-938-3232 (outside of Canada)
Fax: 819-938-5212
Email: eccc.substances.eccc@canada.ca

Michael Donohue
Risk Management Bureau
Department of Health
Ottawa, Ontario
K1A 0K9
Telephone: 613-957-8166
Fax: 613-952-8857
Email: michael.donohue2@canada.ca

PROPOSED REGULATORY TEXT

Notice is given, pursuant to subsection 332(1) (see footnote a) of the Canadian Environmental Protection Act, 1999 (see footnote b), that the Governor in Council, on the recommendation of the Minister of the Environment and the Minister of Health, pursuant to subsection 90(1) of that Act, proposes to make the annexed Order Adding Toxic Substances to Schedule 1 to the Canadian Environmental Protection Act, 1999.

Any person may, within 60 days after the date of publication of this notice, file with the Minister of the Environment comments with respect to the proposed Order or a notice of objection requesting that a board of review be established under section 333 of that Act and stating the reasons for the objection. All comments and notices must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to the Executive Director, Program Development and Engagement Division, Department of the Environment, Gatineau, Quebec K1A 0H3 (fax: 819-938-5212; email: eccc.substances.eccc@canada.ca).

A person who provides information to the Minister of the Environment may submit with the information a request for confidentiality under section 313 of that Act.

Ottawa, February 2, 2017

Jurica Čapkun
Assistant Clerk of the Privy Council

Order Adding Toxic Substances to Schedule 1 to the Canadian Environmental Protection Act, 1999

Amendment

1 Schedule 1 to the Canadian Environmental Protection Act, 1999 (see footnote 15) is amended by adding the following in numerical order:

Natural gas condensates (a complex combination of hydrocarbons primarily in the carbon range of C5 to C15 that are condensed during production at a well head, in a natural gas processing plant, natural gas pipeline or straddle plant), including any of their liquid distillates that are primarily in the carbon range of C5 to C15

Coming into Force

2 This Order comes into force on the day on which it is registered.

[7-1-o]