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Canadian Agency Tasked With Overseeing Pipelines Only Did Its Job Properly Half the Time, Audit Shows

Information was missing, documentation was not filed, and reporters were not finalized, Canada's environmental watchdog has learned.
January 26, 2016, 8:20pm
Photo via Associated Press/Nati Harnik

A new report by Canada's federal environmental watchdog has found the country's pipeline regulator didn't properly track whether companies were following the rules and conditions in 24 cases out of 49.

In those cases, the regulator's tracking was "inaccurate or out of date, key file documentation was missing or the files lacked a final analysis of a company's submissions and reports or a conclusion as to whether the condition had been fully satisfied."

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The new report comes from the country's environmental watchdog, which has found that the National Energy Board (NEB) "inadequate" in its oversight.

The NEB is the government body primarily responsible for vetting and overseeing Canadian pipelines that cross provincial borders. It is required to track whether or not companies follow the conditions agreed to in the approval process.

Between 2008 and 2015, there were six deaths, 23 serious injuries, 10 explosions, 121 fires and 407 leaks at NEB-regulated pipelines, according to the regulator's own data. There were also 117 cases of pipelines operating beyond their design limits, for example, using too much pressure.

Related: Related: Whistleblowers Think They Know Why Canadian Pipelines Are Exploding

Tracking and follow-up is "critical" to ensuring pipelines are built and operated safely, but the watchdog found the NEB's work was inconsistent or poorly documented in half of the cases it examined. If the paperwork and records are improperly done, there's no guarantee companies will follow the rules.

A statement from the National Energy Board reads that the agency is already starting to address the issues and they've drafted an "action plan" and want to address the problems by the end of 2016.

The audit also raised the question of how the NEB will manage its new emergency response duties that come into effect in June. A third of companies' emergency procedures manuals "still lacked important information" and need to be updated, the report found.

"Today's report highlights that the Board is unable to fulfill its most basic function – track and report deficiencies in the operation of federally regulated pipelines. Why even bother attaching conditions to pipeline approvals if the Board can only follow up in a meagre half of reported cases?"

"While the Harper Conservatives saw fit to expand the NEB's mandate, today's report highlights that the Board is unable to fulfill its most basic function – track and report deficiencies in the operation of federally regulated pipelines. Why even bother attaching conditions to pipeline approvals if the Board can only follow up in a meagre half of reported cases?" Said Green Party Leader Elizabeth May in a statement.

The NEB is in the process of considering four different pipeline projects that stretch from coast-to-coast, including the controversial Trans Mountain and Energy East lines, and may yet oversee the construction of five others it has already approved.

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During the election, Justin Trudeau promised to overhaul the NEB to improve the way it considers pipeline projects. At the NEB's hearings on the Trans Mountain pipeline last week, the regulator was the target of a tense protest by three activists who criticized the event for its restricted public access.

Related: Three Protesters Are Facing Criminal Charges After Anti-Pipeline Sit-In in British Columbia

Tuesday's audit also slapped the regulator's wrist on public access, stating the NEB had not improved access to information on pipeline approval conditions, and that information about company compliance was "hindered by the way the information was presented."

"The Board has taken steps to improve public access to information on company compliance with regulatory requirements, but has yet to take similar steps for pipeline approval conditions," the report states.

The tools the NEB uses to track company compliance face "significant, system-wide challenges," including tracking systems that don't communicate with each other and are "outdated and inefficient."

"Compliance tracking information was out of date or inaccurate, the timeliness of the Board's follow-up varied, or the Board's analysis or conclusion on company compliance was missing."

"Compliance tracking information was out of date or inaccurate, the timeliness of the Board's follow-up varied, or the Board's analysis or conclusion on company compliance was missing," the report stated.

If the NEB doesn't fix its issues in the next five months, it could be in trouble. In June, the agency is taking on new pipeline emergency responsibilities thanks to the Pipeline Safety Act, passed under the Conservatives.

"Consolidations of all risk assessment activities that the Board conducts will be important as the Board prepares to assume new responsibilities, including powers to take over emergency response in certain circumstances, when the Pipeline Safety Act comes into force no later than June 2016," the audit states.

Follow Hilary Beaumont on Twitter: @HilaryBeaumont