http://www.nationalobserver.com/2016/04/15/news/federal-official-compares-pipeline-blunders-mistakes-led-railway-disaster
Federal official compares pipeline blunders to mistakes that led to
railway disaster
By Mike De Souza in News, Energy | April 15th 2016
For almost three years, managers and executives at Canadian pipeline
companies have been under a microscope. Their industry watchdog has been
examining whether they make it easy enough for employees to report and
fix anything that might lead to spills, explosions or other serious
incidents.
Depending on who's talking, the results of this examination have either
shown that there is encouraging progress in cleaning up the industry,
or, a frightening disaster in the making.
What's clear is that some people in the pipeline industry are making
mistakes.
The watchdog, Canada's National Energy Board (NEB), has released
hundreds of pages of evidence in audits showing that some pipeline
companies are violating rules that require their managers and executives
to promote a strong safety culture that encourages employees to do the
right thing and not be afraid of repercussions.
Some of these violations are "similar" to the types of mistakes that led
to the Lac-Mégantic railway disaster, according to a senior NEB
executive, writing in an internal memo.
And pipeline industry insiders have told National Observer that they
wonder when a catastrophic event like the train explosion in
Lac-Mégantic might happen to one of their own companies. Forty-seven
people died in July 2013 when a runaway train carrying oil crashed and
exploded in the middle of the small Quebec town. The explosion released
six million litres of oil into the environment and caused hundreds of
millions of dollars in property and environmental damage. It also
prompted multiple investigations and charges against employees and
executives at Montreal, Maine and Atlantic Canada Railway Ltd. and its
affiliate, which operated the train.
The Transportation Safety Board of Canada (TSB), which investigated the
disaster, found that Transport Canada, the government department
responsible for overseeing railway safety, had missed some of the
warning signs because of sloppy oversight.
The NEB's vice-president of operations, Christopher Loewen, told Board
members in a memo about the similarities between what the two regulators
were finding in both the pipeline and railway industries.
The memo, drafted to explain the different roles of the TSB and the NEB,
highlighted how the TSB had identified issues regarding Transport
Canada's oversight, related to the Lac-Mégantic disaster. Loewen then
compared those issues to the NEB’s own record of inspections and audits
of Canadian pipeline industry operations.
“Risk assessment, change management and internal auditing are critical
elements within a company’s management system,” wrote Loewen in the
memo, dated November 12, 2015 and released to National Observer through
access to information legislation.
“Inadequate or absent processes and procedures prevent the effective
management of safety. Board staff has identified similar weaknesses in
these elements during recent management system audits and are conducting
follow-up in accordance with our current procedures.”
Transport Canada told National Observer in a statement that it took
railway safety seriously and implemented a series of measures to
strengthen its oversight following the Lac-Mégantic disaster, including
hiring new inspectors, toughening the rules and introducing new
penalties for violations.
Loewen declined to comment on the memo, referring questions to a
spokesman, Darin Barter, who put a positive spin on the document. Barter
said that Loewen's intention was to highlight that the NEB was doing an
"effective" job overseeing management systems at pipeline companies.
He also denied that the NEB believed there was a management problem at
pipeline companies.
"It would be inaccurate to describe continuous improvement of company
management systems as a problem," said Barter. "It’s important to
realize that management system audits are in addition to front line
inspections, ongoing audits, enforcement, and data analysis – all of
which keep pipelines safe."
The office of Canada's auditor general has released several reports in
recent years, warning that neither Transport Canada, nor the NEB, had
done enough to oversee safe operations of industry.
NDP environment critic Nathan Cullen said that reports like these make
it hard for Canadians to trust the NEB.
“It’s a fox watching the hen house situation and there’s huge risk in
that approach because when something goes wrong, it really goes wrong,”
said Cullen in an interview. “It just foretells a terrible situation.”
To build a regulator from scratch
Whistleblowers have also been skeptical about the NEB’s capacity to fix
problems, noting that some of the issues are recurring within the
industry. Since 2012, about two dozen pipeline whistleblowers have taken
allegations to the NEB after being unable to resolve safety concerns
within their respective companies.
Some of these industry insiders have argued that the Calgary-based
regulator needs to be more transparent and distance itself from close
relationships with industry in order to force companies to create
workplaces where the staff have no fears about reporting alleged
infractions of pipeline safety rules.
Members of the NEB are appointed by the government to approve and manage
all decisions of the regulator. This gives these members extraordinary
powers equivalent to judges on a federal court. They can use these
powers to recommend the approval of new projects and also to investigate
and penalize anyone who breaks pipeline safety rules.
Recent NEB audits in 2014 and 2015 of Canada’s two largest pipeline
companies, Enbridge and TransCanada Corp, identified violations and
weaknesses in management culture. But both companies, also based in
Calgary, have said they addressed the safety violations flagged in those
audits. Neither company was sanctioned by the NEB for these violations.
At the same time, members of the newly-elected Liberal government say
they are eyeing reforms at the NEB itself. Natural Resources Minister
Jim Carr said this week that the government wanted to conduct a
comprehensive review that would examine what a 21st century energy
regulator would look like if it were to be built from scratch.
Safer than trains
The government has said it needs to implement these reforms to help it
deliver on its mandate to get new pipeline infrastructure approved that
would allow the oil and gas industry to gain access to new markets.
The revelations from the NEB memo also coincide with efforts from
industry to convince the public to accept major new pipeline projects by
arguing that its infrastructure is statistically safer at transporting
fossil fuels than trains.
The Canadian Energy Pipeline Association - a lobby group that represents
pipeline companies - said it did not have a spokesperson available to
comment on the memo and its comparison of the Lac-Mégantic disaster to
the pipeline industry's safety culture.
The document also identified a potential weakness in oversight of the
NEB, noting that its own watchdog, the Transportation Safety Board of
Canada, only has one or two full time investigators that focus on
pipeline industry incidents.
The TSB confirmed that it had two engineers that investigate pipeline
incidents, but said it also had other experts from its engineering lab
that could provide assistance, along with outside experts, when needed.
No direct answers
As part of an ongoing investigation of the National Energy Board,
National Observer directed more than 100 questions in March to more than
a dozen different staff at the NEB regarding various management problems
and apparent blunders in its investigations of pipeline safety
allegations. As we reported over the past month, the NEB’s mistakes -
documented through more than a thousand pages of emails, text messages,
employee surveys and other internal records - revealed factual errors in
official reports, inappropriate discussions with industry
representatives and an apparent failure to keep track of all evidence
submitted by whistleblowers.
Most of the staff contacted sent our questions to the NEB's media
relations department which declined to respond directly to questions
about the organization's mistakes. Instead, the NEB sent National
Observer general statements explaining that it had improved its
practices and would soon release details of its reforms.
Questioned by a Conservative MP on Monday at a parliamentary committee,
Natural Resources Minister Jim Carr said he had confidence in NEB
chairman, Peter Watson, who was appointed by the former Conservative
government. Carr also said that Canadians gave the federal Liberals a
mandate in the 2015 election to “reform” the NEB.
Crying shame
Evan Vokes, a former engineer with TransCanada who raised a series of
safety allegations in a formal complaint sent in 2012, said the problem
is that the NEB and pipeline companies break engineering rules, without
any consequences.
Some of Vokes’ allegations from 2012 were later confirmed by the NEB in
an audit released in 2014, but without any sanctions or penalties.
He also said the NEB failed to address many of the systemic problems
that were leading to incidents. In one case, the NEB took nearly four
years to respond to a warning in the 2012 letter about substandard
components in a natural gas pipeline. These substandard parts broke into
pieces in October 2013, leading to a rupture a few hundreds metres away
from a hunting cabin near Fort McMurray, Alberta.
“They (the NEB senior leadership and the pipeline industry) know they
can get away with it. And that’s the crying shame of the whole thing,”
said Vokes.
Adam Scott, the climate and energy program manager at Environmental
Defence, said that the NEB seems to be acting like an oil company that
is buying slick marketing ads to boost its image, instead of dedicating
resources to improving its performance. He also said the apparent
secrecy and failure to answer direct questions about its actions are
doing little to improve public confidence in government oversight of
industry.
“If they were honest and admitted there were a few basic mistakes and
answered questions, it wouldn't be such a big deal,” Scott said in an
interview. “If they continue denying issues they are only going to lose
public trust in the future.”
Long term reforms
Meanwhile, Carr said the Liberal government started the process of
reforming the NEB through new interim measures to toughen pipeline
reviews, but that it also plans to do more. Carr said that the public
has lost trust in the the government's oversight of industry because of
decisions taken by federal Conservatives when in power, that allowed for
projects to be approved without adequate reviews and consultations.
“In the long term, we have a mandate to reform the environmental
assessment process in Canada,” Carr said in response to questions from
Alberta Conservative MP Shannon Stubbs at the House of Commons natural
resources committee on Monday.
“We will be working together. We will be consulting Canadians. And very
importantly, we will be consulting members of this committee. We will be
posing the question: ‘If you had to create a Canadian regulator from
scratch, what would it look like? What would the principles be that
would determine the structure? What would the legislation that we would
ask Parliament to pass consist of? What would the values be? And what is
the relationship ultimately between the government and the regulator?’
So that is the longer term reform of the NEB.”
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Other stories linked from the URL at top of this posting by same author.
Whistleblowers warned about risky welding before TransCanada pipeline leaked
By Mike De Souza in News, Energy | April 11th 2016
Why was the NEB deleting an email sent in the middle of the night?
By Mike De Souza in News, Energy | March 31st 2016
NEB cut planned spending on pipeline safety, increased spending on
furniture and PR
By Mike De Souza in News, Energy | March 24th 2016
They told me to take the money and run, says pipeline whistleblower
By Mike De Souza in News, Energy | March 18th 2016
Here's how TransCanada edited a federal investigation report
By Mike De Souza in News, Energy | March 17th 2016
NEB emails reveal pattern of off-record meetings with pipeline industry
By Mike De Souza in News, Energy | March 17th 2016
TransCanada dismissed this whistleblower. Then their pipeline blew up.
By Mike De Souza in News | February 5th 2016
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