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Emera Brunswick Pipeline Company Ltd. - Audit Report OF-Surv-OpAud-E236 01 [PDF 3316 KB]

File OF-Surv-OpAud-E236 01
27 April 2012

Mr. Christopher Huskilson
President/CEO
Emera Brunswick Pipeline Company Ltd.
16th Floor, Barrington Tower, Scotia Square
1894 Barrington Street
Halifax, NS  B3J 2A8
Facsimile 902-428-6112

Dear Mr. Huskilson:

Emera Brunswick Pipeline Company Ltd. (EBPC)
Final Audit Report

As part of its 2009-2010 compliance verification program, the National Energy Board conducted an audit of EBPC’s management and protection programs as they relate to safety, integrity, crossings, public awareness and environmental protection.

The Board issued its Draft Audit Report on 31 August 2010 for EBPC’s review and comment. EBPC filed responses on 14 October 2011. Following the review and consideration of EBPC’s comments, the Board approved the Final Audit Report, Audit No. OF-Surv-OpAud-E236 01 on 26 April 2012.

The Findings are based upon an assessment of whether EBPC was fulfilling the requirements of the:

  • National Energy Board Act;
  • Onshore Pipeline Regulations, 1999; 
  • National Energy Board Pipeline Crossing Regulations, Part I and Part II;
  • Canada Labour Code (CLC), Part II;
  • Canadian Occupational Health and Safety Regulations made under Part II of the CLC;
  • Safety and Health Committees and Representatives Regulations made under Part II of the CLC; and
  • Company policies, practices and procedures developed and implemented to meet the intent of the regulations and National Energy Board Act.

Findings of “Non-Compliant” must be addressed by EBPC through the development and implementation of an appropriate Corrective Action Plan (CAP). The CAP must be filed for Board approval by 27 June 2012.

The Board wishes to thank EBPC for its cooperation during the audit.

If you require any further information or clarification, please contact Tim Sullivan Team Leader, Operations Business Unit, at 403-299-3665 or toll free at 1-800-899-1265.

Yours truly,

Sheri Young
Secretary of the Board

Attachment


Audit Report
OF-Surv-OpAud-E236 01

Emera Brunswick Pipeline Company Ltd.
16th Floor, Barrington Tower, Scotia Square
1894 Barrington Street
Halifax, Nova Scotia B3J 2A8

26 April 2012

Table of Contents

Appendices

1.0 Introduction: NEB Purpose and Framework

The National Energy Board’s (the Board or the NEB) corporate purpose is to promote safety and security, environmental protection, and efficient energy infrastructure and markets in the Canadian public interest within the mandate set by Parliament in the regulation of pipelines, energy development, and trade.

The Onshore Pipeline Regulation, 1999 (OPR-99) came into force 1 August 1999 reflecting the NEB’s intent to progress from prescriptive regulation to management system based regulation. To evaluate compliance with the regulations, the NEB undertakes program audits of its regulated companies. Following the audits, companies are required to submit and implement a Corrective Action Plan (CAP) to address and mitigate any findings of non-compliance. The results of the NEB audits are used in the NEB risk-based life cycle approach to compliance planning.

The NEB requires that each company be able to demonstrate the adequacy and implementation of the methods they have selected and employed to achieve compliance.

2.0 Audit Terminology and Definitions

  • Audit: A systematic, independent and documented process for obtaining evidence and evaluating it objectively to determine the extent to which audit criteria are fulfilled.
  • Corrective Action Plan (CAP): Addresses the non-compliances identified in the Audit Report and explains the methods and actions which will be used to “correct” them.
  • Operator: The Operations and Maintenance agreement was transferred to Westcoast Energy Inc. following the dissolution of St. Clair Pipelines (1996) Ltd.
  • Program: A documented set of processes and procedures to regularly accomplish a result. The program outlines how plans and procedures are linked and how each one contributes towards the result.
  • Process: A systematic series of actions or changes taking place in a definite order and/or manner (i.e. procedure), and directed towards a result.
  • Procedure: A documented series of steps of a process followed in a regular and defined order and/or manner allowing individual activities to be completed in an effective and safe manner. The procedure will also outline roles, responsibilities and authority required for completing each step.
  • Finding: The evaluation or determination of the adequacy of programs or elements in meeting the requirements of the National Energy Board Act, associated regulations and Part II of the Canada Labour Code.
  • Compliant: A program element meets legal requirements. The company has demonstrated that it has developed and implemented its programs, process and procedures to meet legal requirements.
  • Non-Compliant: A program element does not meet legal requirements. The company has not demonstrated that it has developed and implemented its programs, process and procedures to meet the legal requirements. A CAP is required.
  • Compliant with recommendation: An opportunity to improve practices or to change practices that are currently in compliance but have the potential, based on professional judgment, to lead to non-compliance. A CAP is not required.

3.0 Audit Objectives

The objectives of the audit were to determine Emera Brunswick Pipeline Company Ltd.’s (EBPC) compliance with the National Energy Board Act (NEB Act), the Onshore Pipeline Regulations, 1999 (OPR-99), the National Energy Board Pipeline Crossing Regulations, Part I and Part II (PCR), Part II of the Canada Labour Code (CLC), and regulations made under Part II of the CLC as it relates to the Brunswick Pipeline System.

4.0 Audit Scope

The scope of this audit included EBPC’s integrity, safety, environment, emergency preparedness and response (EPR), crossings and public awareness programs which have been developed and implemented for the Brunswick Pipeline system to meet the requirements of the NEB Act, OPR-99, PCR and Part II of the CLC.

In service since 2009, EBPC is a wholly owned subsidiary of Emera Inc., an energy company based in the Maritime Provinces. EBPC is the certificate holder for the NEB-regulated Brunswick Pipeline which is a 145-kilometer, 30-inch diameter pipeline that currently delivers natural gas supplied exclusively by Repsol Energy Canada Ltd. from the Canaport TM Liquefied Natural Gas receiving and re-gasification terminal in Saint John, New Brunswick (NB), to the north eastern United States (U.S.) as well as to markets in Canada through a backhaul on the Maritimes & Northeast Pipeline system. The pipeline is buried for its entire length and extends through southwest NB to an interconnection with the Maritimes & Northeast Pipeline (M&NP) transmission system at the Canada-U.S. border near St. Stephen, NB.

5.0 Audit Process

The NEB notified EBPC in a letter dated 18 March 2010 of its intent to conduct an audit on the federally regulated Brunswick Pipeline System. On 29 April 2010 an opening meeting was conducted with representatives from EBPC and its Operator in Saint John, NB to discuss the audit objectives, scope and process; and to initiate the development of a schedule for conducting the site visits and staff interviews. For a list of EBPC and Operator staff interviewed, refer to Appendix VIII. For a list of documents and records reviewed for each program audited, refer to Appendix IX.

In its application to the Board, EBPC indicated that it would meet the program requirements of the OPR-99 as it related to the operations and maintenance of the Brunswick Pipeline system through “adoption and augmentation as necessary of M&NP’s policies, programs and procedures” (Section 5.3 of EBPC’s Application to the Board). EBPC entered into an Operation and Maintenance (O&M) Agreement with St. Clair Pipelines (1996) Ltd. to commission, operate and maintain the facilities of EBPC. The O&M agreement was transferred to Westcoast Energy Inc. with the dissolution of St. Clair Pipelines Ltd. Spectra Energy is the current holder of the Operations and Maintenance agreement.

As the Operator, Spectra Energy developed and implemented the programs that were evaluated during this audit. Its employees were interviewed as they were designated to carry out the responsibilities on behalf of EBPC as per the O&M Agreement. In order to accurately reflect the operation, the Board evaluated the implementation of the programs by the Operator in the program tables and determined compliance status accordingly. As such, the non-compliances identified by this audit constitute an assessment of the Operator’s implementation of the programs. The Board holds EBPC, as the certificate holder, accountable for the provision of oversight and ensuring the development and implementation of corrective actions to address all non-compliances.

O&M agreement notwithstanding, as the certificate holder, EBPC retains the ultimate accountability for ensuring the programs meet regulatory requirements. The Board holds EBPC accountable to provide oversight to ensure that the programs implemented on its behalf are effective in meeting its regulatory requirements. In order to accurately capture the role of the certificate holder, EBPC was evaluated against the criteria of Element 5.1 - Management Review.

Audit Activities, Locations and Dates

Audit Activities, Locations and Dates

  • Audit Notification Letter - 18 March 2010
  • Audit Opening Meeting (Saint John, NB) - 29 April 2010
  • Document and records review (Calgary, AB) - 01 June - 05 July 2010
  • Head Office Interviews (Waltham, MA) - 6-7 July 2010
  • Field verification of all programs:
    • Halifax, NS - 8 July 2010
    • Saint John, NB - 12 July 2010
    • Fredericton, NB - 13-14 July 2010
  • Audit Close-out Meeting (Fredericton, NB) - 28 October 2010

6.0 Audit Results

For evaluation purposes, the NEB management requirements have been organized in a table format and include 5 elements and 16 sub-elements:

Table shows 5 elements and 16 sub-elements
1) Policy and Commitment
1.1 Policy and Commitment Statements
2) Planning
2.1 Hazard Identification, Risk Assessment and Control
2.2 Legal Requirements
2.3 Goals, Targets and Objectives
3) Implementation
3.1 Organizational Structure, Roles and Responsibilities
3.2 Management of Change
3.3 Training, Competence and Evaluation
3.4 Communication
3.5 Documentation and Document Control
3.6 Operational Control - Normal Operations
3.7 Operational Control - Upset or Abnormal Operating Conditions
4) Checking and Corrective Action
4.1 Inspection, Measurement and Monitoring
4.2 Corrective and Preventive Actions
4.3 Records Management
4.4 Internal Audit
5) Management Review
5.1 Management Review

These elements correspond to legal requirements and are arranged to match standard management system elements to aid in the evaluation of the requirements. Each discipline was audited against each of these elements; the results of these assessments are provided in tables appended to the report. Element 5.1 Management Review was assessed for EBPC independent of the disciplines and is presented in a separate table also appended to the report. A summary of these results is presented below.

EBPC Findings Table

EBPC Findings Table

I-Integrity

II-Safety

III-Environment

IV-Emergency Management

V-Crossings

VI-Public Awareness

1.0 POLICY AND COMMITMENT

1.1 Policy & Commitment Statement

Compliant

Compliant

Compliant

Compliant

Compliant

Compliant

2.0 PLANNING

2.1 Hazard Identification, Risk Assessment and Control

Compliant

Compliant

Compliant (rec)

Non-Compliant

Compliant

Compliant (rec)

2.2 Legal Requirements

Compliant

Non-Compliant

Non-Compliant

Compliant

Non-Compliant

Compliant (rec)

2.3 Goals, Objectives and Targets

Compliant

Compliant

Compliant (rec)

Compliant

Compliant

Compliant

3.0 IMPLEMENTATION

3.1 Organizational Structure, Roles and Responsibilities

Compliant

Compliant (rec)

Non-Compliant

Compliant

Compliant

Compliant (rec)

3.2 Management of Change

Compliant

Non-Compliant

Non-Compliant

Non-Compliant

Non-Compliant

Non-Compliant

3.3 Training, Competence and Evaluation

Compliant

Compliant

Non-Compliant

Compliant

Compliant (rec)

Non-Compliant

3.4 Communication

Compliant (rec)

Non-Compliant

Non-Compliant

Compliant

Compliant (rec)

Compliant (rec)

3.5 Documentation and Document Control

Compliant (rec)

Compliant (rec)

Compliant (rec)

Compliant

Compliant

Compliant

3.6 Operational Control - Normal Operations

Compliant

Compliant

Non-Compliant

Compliant

Compliant

Compliant

3.7 Operational Control - Upset or Abnormal Operating Conditions

Compliant

Compliant

N/A

Compliant

N/A

N/A

4.0 CHECKING AND CORRECTIVE ACTION

4.1 Inspection, Measurement and Monitoring

Compliant

Compliant (rec)

Compliant (rec)

N/A

Non-Compliant

Non-Compliant

4.2 Corrective and Preventive Actions

Compliant

Compliant

Compliant

Non-Compliant

Non-Compliant

Compliant

4.3 Records Management

Compliant

Compliant

Compliant

Compliant

Compliant

Compliant (rec)

4.4 Internal Audit

Compliant (rec)

Compliant (rec)

Compliant (rec)

Compliant (rec)

Compliant (rec)

Compliant (rec)

5.0 MANAGEMENT REVIEW

5.1 Management Review

Non-Compliant

Compliant (rec): Compliant with Recommendation

6.1 Integrity Management Program

Review of the Operator’s planned and implemented Integrity Management Program (IMP) activities indicates that it has benefited from the formal adoption of Annex N of CSA Z662-07. No significant issues are apparent from this audit. The Operator’s internal audit process will have to be modified to reflect the recommendations made in the evaluation of Element 4.4 Internal Audit to remain in compliance in the long term.

The assessment of the overall IMP can be found in Appendix I: EBPC Integrity Management Program Audit Evaluation Table.

6.2 Safety Program

The audit determined that EBPC and its Operator are implementing a safety management program. The findings of non-compliance and recommendations for improvement outlined in this audit relate to the lack of formal development and implementation of processes for: identifying legal requirements, the management of change as well as an overarching communication plan.

The explanation of these deficiencies and an assessment of the safety program, can be found in Appendix II: EBPC Safety Program Audit Evaluation Table.

6.3 Environmental Protection Program

The audit of the Environmental Protection Program indicated that there are no issues which are considered immediately significant. However, the company needs to formalize and update aspects of its program to make its practices fully reflect the conditions of the operating phase versus post-construction phase.

In general, the findings of non-compliance and recommendations for improvement outlined in this audit related to the lack of formalization in the following areas: the identification of legal requirements, clarification of roles and responsibilities for key personnel, the management of change process, the communication of environmental issues, and the process for procedural updates.

The explanation of these deficiencies and an assessment of the system as a whole can be found in Appendix III: EBPC Environmental Protection Program Audit Evaluation Table.

6.4 Emergency Preparedness and Response Program

The audit of the EPR program is tested as required by the certificate condition and OPR-99. While no issues with this program were considered immediately significant, there are elements of the program and activities which require further formalization and implementation. The findings of non-compliant and recommendations for improvement from this audit relate to hazard identification, the management of change and the documentation of follow up from emergency exercises.  

The explanation of these deficiencies and an assessment of the system as a whole can be found in Appendix IV: EBPC EPR Program Audit Evaluation Table.

6.5 Crossing Program

The audit of the crossing program indicates that the majority of the program as implemented at the time of the audit is aligned with Board expectations. The findings of non-compliant and recommendations for improvement relate to the identification of legal requirements, the management of change and the procedures for monitoring encroachments on the right of way.

The explanation of these findings and an assessment of the system as a whole refer to Appendix V: EBPC Crossing Program Audit Evaluation Table.

6.6 Public Awareness Program

The audit of the public awareness program indicates that it is, for the most part, meeting the requirements of the regulations. The non-compliances and recommendations identified during the audit relate to formal management of change, measuring and monitoring and training.

The explanation of these deficiencies and an assessment of the system as a whole can be found it Appendix VI: EBPC Public Awareness Program Audit Evaluation Table.

6.7 Management Review

As the criteria for the internal operational audits and the review of the O&M Agreement were not developed at the time of the audit, the adequacy of these processes could not be verified; therefore this element was assessed as non-compliant.

Meanwhile, EBPC Management is undertaking some of the required oversight expected by the Board in that operational activities are reviewed and monitored through: weekly conference calls with the Operator; active communication with internal and external stakeholders; and ongoing monitoring of compliance to its certificate conditions.

It is also the intent of EBPC to complete an annual review of its O&M Agreement to ensure the Operator is meeting the requirements of the agreement, and an audit of its operational programs. The audit process to be used will integrate the internal audit process currently used by the Operator and the audit requirements set out in the Emera Inc. Environmental Management System.

The assessment of Element 5.1: Management Review can be found in Appendix VII.

7.0 Conclusions

Except where noted, the audit of EBPC’s system indicates that the operational programs are functioning in compliance with NEB expectations. Having only been in operation for one year at the time of the audit, many non-compliant findings in this report were the result of programs that were not yet fully implemented as designed.

While all non-compliant findings described in the appendices require corrective action plans and resolution, of particular note is the non-compliance described in Appendix VII, Management Review. The Board recognizes EBPC demonstrated a degree of oversight and ongoing communication with its Operator. However, it is the Board’s view that formally documented and active oversight by the certificate holder is essential to the ongoing safe operation of the pipeline for which it is accountable.

8.0 Abbreviations

CAP: Corrective action plan
CLC: Canada Labour Code
COSHR: Canada Occupational Health and Safety Regulations
CSA: Canadian Standards Association
EBPC: Emera Brunswick Pipeline
EHS: Environment Health and Safety
EHSC: Environment Health and Safety Committee
EM: Emergency management
EMO: Emergency Measures Organization
EPASS: Environment Performance and Safety System
EPP: Environmental Protection Program
EPR: Emergency preparedness and response
EPZ: emergency planning zone
ERP: Emergency response plan
ILI: in-line inspection
IMP: Integrity management program
IWOL: Incident Without Loss
JSA: Job safety analysis
LMS: Learning Management System
M&NP: Maritimes and Northeast Pipeline
MA: Maine
MOC: Management of change
MS: Management System
NB: New Brunswick
NEB: National Energy Board
NS: Nova Scotia
O&M: Operation and maintenance
O&MSM: Operations and Maintenance Specifications Manual
OHS: Occupational Health and Safety
OPR-99: Onshore Pipeline Regulations, 1999
PA: Public Awareness
PCR: National Energy Board Pipeline Crossing Regulations
PIOC: Pipeline Integrity Oversight Committee
PRS: Pressure reducing station
RoW: Right-of-way
SAIL: System and Integrity Logging
SCC: Stress corrosion cracking
SOP: Standard Operating Procedure
U.S.: United States of America

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