Vol. 152, No. 4 — February 21, 2018
SOR/2018-20 February 12, 2018
CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999
P.C. 2018-127 February 12, 2018
Whereas, pursuant to subsection 332(1) (see footnote a) of the Canadian Environmental Protection Act, 1999 (see footnote b), the Minister of the Environment published in the Canada Gazette, Part I, on February 18, 2017, a copy of the proposed Order Adding Toxic Substances to Schedule 1 to the Canadian Environmental Protection Act, 1999, substantially in the annexed form, and persons were given an opportunity to file comments with respect to the proposed Order or to file a notice of objection requesting that a board of review be established and stating the reasons for the objection;
And whereas, pursuant to subsection 90(1) of that Act, the Governor in Council is satisfied that the substances set out in the annexed Order are toxic substances;
Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of the Environment and the Minister of Health, pursuant to subsection 90(1) of the Canadian Environmental Protection Act, 1999 (see footnote c), makes the annexed Order Adding Toxic Substances to Schedule 1 to the Canadian Environmental Protection Act, 1999.
Order Adding Toxic Substances to Schedule 1 to the Canadian Environmental Protection Act, 1999
1 Schedule 1 to the Canadian Environmental Protection Act, 1999 (see footnote 1) is amended by adding the following in numerical order:
139 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.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Order.)
In 2017, the Government of Canada (the Government) completed a screening assessment of natural gas condensates (NGCs) (see footnote 2) to determine whether the substances could constitute a danger to the environment or human health in Canada. (see footnote 3) The assessment determined that NGCs pose a danger to both human health and to non-human organisms in the environment and that NGCs therefore meet the criteria under paragraphs 64(a) and 64(c) of the Canadian Environmental Protection Act, 1999 (CEPA). Therefore, the Government is adding NGCs to the List of Toxic Substances in Schedule 1 of CEPA.
The Chemicals Management Plan (CMP) (see footnote 4) assesses and manages 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 during oil and gas production at wellheads; in natural gas processing plants; in gas pipelines for production, gathering, transmission and distribution; and/or 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 to C15. NGCs fall within a broad classification of substances collectively referred to as 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 5) According to information reported in 2012 under section 71 of CEPA on three NGCs (Chemical Abstracts Service Registry Numbers 64741-47-5, 64741-48-6, 68919-39-1), 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 NGC production, storage and transport via pipeline, ship, truck and rail. NGCs may also be released to the surrounding marine environment from produced water (see footnote 6) 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 ten-year period (2002–2011).
Existing Canadian 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 7)
The National Energy Board has jurisdiction over pipelines that cross provincial and international boundaries. In 2013, federal regulations aimed at 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 modernized regulatory language, damage prevention best practices and clarifications to 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 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, sets out the minimum requirements for building construction including storage facilities where NGCs may be stored. They 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.
Risk management activities in other international jurisdictions
In the United States, several regulations pertaining to NGCs have been developed under the National Emission Standards for Hazardous Air Pollutants (NESHAP) and New Source Performance Standards (NSPS) 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. 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 permitting and control of industrial installations (see footnote 8) 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 international transportation of dangerous goods, including NGCs.
Summary of the screening assessment
Using available information, a screening assessment was conducted for NGCs to determine whether they meet one or more of the criteria as defined in section 64 of CEPA. Specifically, this involves determining whether the substances are entering or may enter the environment in a quantity or concentration or under conditions that
- a) have or may have an immediate or long-term harmful effect on the environment or its biological diversity;
- b) constitute or may constitute a danger to the environment on which life depends; or
- c) constitute or may constitute a danger in Canada to human life or health.
The screening assessment concluded that the NGCs meet the criteria under paragraphs 64(a) and (c) but not (b) of CEPA. Below please find summaries of the ecological and human health assessments.
Ecological assessment results
The approach taken in the 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 was 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. As such, the screening assessment concluded that NGCs meet the criterion under paragraph 64(a) of CEPA, but not the criterion under paragraph 64(b) of CEPA.
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 11) 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/unloading and storage tank sites.
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 12) 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 loading/unloading sites, and NGCs storage sites.
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/unloading sites may be a source of concern to human health.
Based on available information on the composition of NGCs, the carcinogenic nature of benzene, and estimates for inhalation exposures, it was determined that NGCs emissions may pose a risk to human health for those living in the vicinity of certain high-volume rail or truck NGCs loading/unloading sites as well as NGCs storage sites. The screening assessment therefore concluded that NGCs meet the criterion under paragraph 64(c) of CEPA.
In December 2016, the Final Screening Assessment report and Risk Management Approach document for NGCs was published on the Government’s Chemical Substances website. (see footnote 13) In February 2017, the proposed Order recommending the addition of NGCs to Schedule 1 of CEPA and a Regulatory Impact Analysis Statement was published in the Canada Gazette, Part I. (see footnote 14), (see footnote 15)
The objective of the Order Adding Toxic Substances to Schedule 1 to the Canadian Environmental Protection Act, 1999 (the 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.
The Order adds NGCs (see footnote 16) to Schedule 1 of CEPA (the List of Toxic Substances).
The “One-for-One” Rule does not apply, as the Order does not impose any administrative burden on business.
Small business lens
The small business lens does not apply, as the Order does not impose any compliance or administrative costs on small businesses.
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. (see footnote 17)
In February 2017, the proposed Order recommending the addition of NGCs to Schedule 1 of CEPA and the Regulatory Impact Analysis Statement providing a summary of the policy and risk assessment process for NGCs, which includes a summary of the comments received on the draft screening assessment and Government responses, were published in the Canada Gazette, Part I, for 60-day public comment period. No comments were received on the proposed Order.
NGCs may be released through leaks or spills during their production, processing, transportation, and from NGC storage tanks. 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. In addition, 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 loading/unloading sites, as well as in the vicinity of the NGC storage facilities. Short-term inhalation levels of exposures in the vicinity of rail loading/unloading sites were also found to potentially be of concern to human health.
Based on information received under the authority of CEPA, and given the environmental and human health concerns associated with NGCs, the screening assessment concluded that NGCs met the environmental criterion as defined in paragraph 64(a) of CEPA and the human health criterion as defined in paragraph 64(c) of CEPA. One of the following measures must be proposed after an assessment is conducted under section 74 of CEPA:
- Taking no further action with respect to the substance under the authority of CEPA;
- Adding the substance to the Priority Substances List for further assessment; or
- 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 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 options. The implementation of virtual elimination is not applicable for NGCs.
The addition of NGCs to Schedule 1 of CEPA will not result in direct impacts (benefits or costs) on the public or industry, since the Order will not impose any compliance requirements on stakeholders. Accordingly, there will 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 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, (see footnote 18) a Strategic Environmental Assessment (SEA) was completed under the CMP. The detailed analysis that was completed as part of the SEA indicated that the CMP will have a positive effect on the environment and human health. For more information, please see the following link: http://www.chemicalsubstanceschimiques.gc.ca/plan/sea-ees-eng.php.
Implementation, enforcement and service standards
The Order adds NGCs to Schedule 1 of CEPA. Developing an implementation plan, a compliance strategy or establishing service standards are not considered necessary for this Order as it has no requirements that would need to be enforced.
Program Development and Engagement Division
Department of the Environment
Substances Management Information Line:
1-800-567-1999 (toll-free in Canada)
819-938-3232 (outside of Canada)
Risk Management Bureau
Department of Health
- Footnote a
S.C. 2004, c. 15, s. 31
- Footnote b
S.C. 1999, c. 33
- Footnote c
S.C. 1999, c. 33
- Footnote 1
S.C. 1999, c. 33
- Footnote 2
Natural gas condensates are a class of substances related to the petroleum sector that share similar sources, properties, and use.
- Footnote 3
Please see the screening assessment for natural gas condensates at http://www.ec.gc.ca/ese-ees/7933A3C7-9ACC-4F80-9339-85451B59FFD0/FSAR%20PSSA4%20NGCs%202016-12-12.pdf.
- Footnote 4
For more information, please visit: https://www.canada.ca/en/health-canada/services/chemical-substances/chemicals-management-plan.html.
- Footnote 5
Although NGCs were initially thought to be present in consumer products, the assessment only identified industrial uses for these substances in Canada. It is therefore expected that the general population would not be exposed to NGCs through consumer products.
- Footnote 6
Produced water includes water that is naturally occurring in the rock formation from which the oil or gas is being extracted, water injected into the well to facilitate the extraction of the oil or gas and water that is produced during initial processing of the gas at the offshore platform (e.g. gas dehydration).
- Footnote 7
For more information on the risk management activities associated with NGCs, please see the risk management approach document at http://www.ec.gc.ca/ese-ees/BBE4B27E-41CF-4E49-9B99-92519C4C8E9E/EN%20RM%20Approach%20NGCs%202016-07-16.pdf.
- Footnote 8
For more information on the directive, please see: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2010:334:0017:0119:en:PDF.
- Footnote 9
These lines of evidence can include risk quotients, results of probabilistic analyses, evidence of harm in the field, evidence of persistence and potential for bioaccumulation, and high or increasing levels of exposure.
- Footnote 10
For more information on the ecological assessment of NGCs, please see the screening assessment at http://www.ec.gc.ca/ese-ees/7933A3C7-9ACC-4F80-9339-85451B59FFD0/FSAR%20PSSA4%20NGCs%202016-12-12.pdf.
- Footnote 11
Benzene is on the List of Toxic Substances in Schedule 1 of CEPA. It is also classified as a Group 1 carcinogen (carcinogenic to humans) by European Commission and the International Agency for Research on Cancer (IARC).
- Footnote 12
The carcinogenic potency estimates of benzene, previously developed by the Government, refer to cancer risk per unit of exposure to benzene.
- Footnote 13
For more information, please see: https://www.canada.ca/en/health-canada/services/chemical-substances/petroleum-sector-stream-approach/stream-4.html#a32.
- Footnote 14
For more information, please see: http://gazette.gc.ca/rp-pr/p1/2017/2017-02-18/html/reg1-eng.php#footnote.55577
- Footnote 15
This publication can be obtained from the Chemical Substances website or from the Program Development and Engagement Division, Environment and Climate Change Canada, Gatineau, Quebec K1A 0H3; by fax at 819-938-3231; or by email at firstname.lastname@example.org.
- Footnote 16
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.
- Footnote 17
For more information on public comments please visit: http://ec.gc.ca/ese-ees/default.asp?lang=En&n=6CFCE21B-1.
- Footnote 18
Please see the Proposal at https://www.canada.ca/content/dam/canada/environmental-assessment-agency/migration/content/b/3/1/b3186435-e3d0-4671-8f23-2042a82d3f8f/cabinet_directive_on_environmental_assessment_of_policy_plan_and_program_proposals.pdf.