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Canadian Pipelines Warned: Inspections Coming

Canadian pipelines have been put on notice to expect more safety inspections and public exposure of lapses, and the authorities have put teeth into the warning by making an example of the biggest company.

The National Energy Board (NEB) has embarked on a regulatory compliance audit of TransCanada Corp.'s pipelines. An NEB letter to the company's president, Russ Girling, said the dragnet will probe its entire Canadian natural gas and oil delivery network.

TransCanada operations span the country with 57,000 kilometers (35,500 miles) of pipelines, including the: Alberta-Ontario Mainline: 14,101 kilometers (8,762 miles); Trans Quebec & Maritimes Pipeline: 572 kilometers (355 miles); Canadian legs in export route Foothills Pipe Lines: 1,241 kilometers (771 miles); Nova Gas Transmission supply-gathering grid across Alberta and British Columbia: 24,373 kilometers (15,145 miles); and Canadian leg of oil export conduit Keystone Pipeline: 529 kilometers (329 miles).

The NEB letter, dated last Tuesday, said all aspects of TransCanada's pipeline operations will be reviewed against four sets of detailed government and industry standards. The yardsticks are established by the National Energy Board Act, Canada's Onshore Pipeline Regulations 1999, a Canadian Standards Association manual titled CSA Z662-11: Oil and Gas Pipeline Systems, and TransCanada's own handbooks of policies, practices and procedures.

"The board expects TransCanada to demonstrate, and provide adequate supporting documentation of, the adequacy of its integrity management program (IMP) as well as its compliance with the documents [regulations and standards] listed," the NEB letter said.

The network-wide audit was launched three weeks after the board fired off a warning to the industry in general and TransCanada in particular. "Pipeline safety is of paramount importance to the NEB, and it will take all available actions to protect Canadians and the environment," said the warning notice. "The board requires pipeline companies to anticipate, prevent, manage and mitigate potentially dangerous conditions associated with their pipelines and will take appropriate action when they do not."

The action follows through on declared intentions of regulatory reform legislation that the Conservative majority in Parliament in Ottawa passed four months ago (see NGI, May 14). The package simultaneously enacted pro-development procedural changes intended to accelerate project approvals and a strengthened mandate for regulators to ensure that accelerated development does not increase risks of accidents. The heightened authority includes potentially stiff administrative fines and penalties if companies are caught cutting corners to pare costs.

The new regime includes public exposure of any lapses uncovered by federal regulators. The NEB drove home the message that potentially embarrassing material will be laid out in plain view on the public record by immediately posting its missives to TransCanada and the industry in prominent spots on its website.

The NEB made TransCanada an example of the new exposure regime in early October by posting the regulatory response to a formal complaint by a former employee of the company. The whistle blower, an engineer who eventually became a momentary celebrity by stepping forward for an interview on the national media networks of the Canadian Broadcasting Corp., insisted that TransCanada violated proper procedure by hiring contract specialists to do safety inspections of a newly constructed pipeline leg instead of dispatching its own staff to the site.

The NEB prominently posted a reply to the whistle blower that said "many of the allegations of regulatory noncompliance identified by the complainant were verified by TransCanada's internal audit." The board also said the noncompliance allegations "do not represent immediate threats to the safety of people or the environment."

Although there have been no counterparts north of the border to big ruptures and spills on U.S. legs of Canadian export pipelines, mishaps in the United States have been highly publicized by critics of the industry. A new NEB public involvement policy, unveiled in mid-October, warns the industry to expect increased exposure. Measures will include "increasing public access to board-initiated safety and environmental compliance actions under the National Energy Board Act by posting additional documents on the board's website," the policy said.

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