Audit of TransCanada finds deficiencies in pipeline safety
The National Energy Board fast-tracked the audit to start in November 2012, rather than mid-2013 as planned, after a whistleblower complained to the regulator.

Thestar.com
March 6, 2014
By Jessica McDiarmid

An audit by federal regulators of TransCanada Corp ., which plans to build a 4,500-kilometre pipeline that will cut across Ontario , found the energy giant non-compliant in four of nine areas reviewed.

The National Energy Board fast-tracked the audit to start in November 2012, rather than mid-2013 as planned, after a whistleblower complained to the regulator of substandard welding and inspection practices within the company.

In its audit report released last week, the energy regulator found instances of non-compliance in four categories: hazard identification, risk assessment and control; operational control - upset or abnormal operating conditions; inspection, measurement and monitoring; and management review.

“The board notes that a number of the allegations of regulatory non-compliance were identified and addressed by TransCanada only after the complainant’s allegations were made and were not proactively identified by the company’s management system,” the energy board noted.

The audit also confirmed that the whistleblower, an engineer then working for TransCanada, had first approached senior management about his safety concerns before going to the regulator.

The company, which also wants to build the controversial Keystone XL pipeline , has “developed and implemented actions to correct and prevent similar occurrences for the confirmed issues,” the regulator said.

TransCanada has also identified “the majority, and most significant, of its hazards and risks,” the audit found.

But remaining non-compliant areas that remain include the company’s internal management practices, such as “overreliance on lagging indicators; inadequate consideration of NEB safety advisories notifying where hazardous conditions existed and regulatory requirements were not being met; and ineffective implementation of internal practices to address the complainant’s issues prior to board notification.”

TransCanada said in a written statement that it accepts the audit and “are pleased that they have indicated that our current systems have identified the majority and most significant hazards and risks.”

The company already has improvements underway to address safety issues raised in the audit, the statement noted.

“This audit was expected and is a normal part of the (board’s) oversight of our operations and is designed to find areas where improvements could be made,” said the company.

“The findings from this review will be included in a program of improvements, many of which we have already underway, that we are committed to as part of our ongoing efforts to ensure our pipeline safety management system is as effective as it can be.

TransCanada’s Energy East pipeline would carry 1.1-million barrels of crude a day from western Canada to refineries in the east. Construction of the 4,500-kilometre line would involve converting a natural gas pipeline to carry oil, building new line in all six provinces along its route, and constructing new terminals.

Gillian McEachern, campaigns director at Environmental Defence, said the non-compliance findings raise concerns about the safety of TransCanada PipeLines.

“This isn’t a company that we exactly want to trust with a big, risky project that would cross large swaths of Ontario,” said McEachern.

“I think what the non-compliance finding means is that municipalities, Ontario, all the citizens that this pipeline would affect, need to really ask whether TransCanada is a company that they trust with this type of project and whether they want it in their back yard.”

Mark Calzavara of the Ontario Council of Canadians said it’s up to the provincial government to step into the pipeline fray to ensure Energy East is safe, if it goes ahead at all.

“We just don’t believe that TransCanada is up to the task and can do it safely and we’re really not very confident that the National Energy Board is up to the task of regulating them,” said Calzavara. “We have to look to the provincial government to say no.”

The Ontario Energy Board plans to hold consultations on the proposed project, which will also need approval from the federal energy board to go ahead.

TransCanada has 30 days to submit a corrective action plan to federal regulators in response to the audit.