ARCHIVED - National Energy Board Onshore Pipeline Regulations, 1999 (OPR-99) - Final Audit Report for Integrity Management, Safety, Environmental Protection, Emergency Management, Crossings and Public Awareness Programs - OF-Surv-OpAud-S380-2012-13 01

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National Energy Board Onshore Pipeline Regulations, 1999 (OPR-99) - Final Audit Report for Integrity Management, Safety, Environmental Protection, Emergency Management, Crossings and Public Awareness Programs - OF-Surv-OpAud-S380-2012-13 01 [PDF 895 KB]

National Energy Board Onshore Pipeline Regulations, 1999 (OPR-99)

Final Audit Report
for Integrity Management, Safety, Environmental Protection,
Emergency Management, Crossings
and Public Awareness Programs

File Number: OF-Surv-OpAud-S380-2012-13 01

Pipelines Spectra Energy Empress Management Inc. as General Partner and Agent for Spectra Energy Empress L.P. (SET-PTC)
Suite 2600, 425 - 1st Street SW
Calgary, AB  T2P 3L8

22 March 2013

Executive Summary

As part of its compliance verification program, the National Energy Board (NEB or Board) conducted an audit of SET-PTC’s Integrity Management, Safety, Environmental Protection, Emergency Management, Crossings and Public Awareness Programs (Programs) as they apply to its pipeline facilities. These Programs, and their content, are required to be developed under the National Energy Board Act (NEB Act), the Canada Labour Code (CLC), and their associated regulations.

This audit is one of a series three audits being undertaken by the Board with respect to NEB regulated facilities operated within Spectra Energy’s organization. The others are: the National Energy Board Processing Plant Regulations Audit of the McMahon Gas Plant and the concurrent audit of Spectra Energy’s British Columbia pipeline facilities (Westcoast). These audits identified that Spectra Energy is operating its facilities using a common organizational and technical management structure for all of the facilities noted. The findings are therefore similar in each audit, and the individual audit reports reflect this. During the audit, the Board reviewed and evaluated each set of facilities based on the individual activities, as well as the associated hazards and risks, as reflected in the individual audit reports.

The audit identified that SET-PTC is implementing technical programs to manage and control the hazards associated with its pipeline facilities. The audit did, however, identify a number of non-compliant findings. The majority of the non-compliant findings relate to SET-PTC’s lack of formal, proactive and systematic identification, review and management of its legal requirements, and its safety and environmental hazards, across its Programs. The audit identified that the majority of hazards had been included in SET-PTC’s procedures and practices; however, these hazards were primarily identified by SET-PTC staff either through personal knowledge, or in the operating permits issued by other regulatory bodies, rather than through required systematic reviews and assessment processes. This has resulted in SET-PTC being unable to demonstrate that its Programs are compliant. Board is of the view that these non-compliance findings do not pose an undue hazard during the development and implementation of a CAP to address the deficiencies.

The Board notes that within the management system elements of its audit protocols there are conceptual linkages between sub-elements. As a result, a finding of non-compliance in a particular sub-element may necessarily result in multiple findings of non-compliance within each Program area. This is particularly evident in this audit due to SET-PTC’s non-compliant hazard identification and assessment practices. Within the Appendices to this report, the Board has identified each of the linked sub-element findings to assist SET-PTC in implementing all necessary corrective actions to its Programs to ensure safety management and environmental protection.

Table of Contents

1.0 Introduction: NEB Purpose and Framework

The NEB’s 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.

To evaluate compliance with its regulations, the NEB undertakes audits of its regulated companies. Following the audits, companies are required to submit and implement a CAP to address and mitigate all findings of non-compliance. The results of the audits are applied to the NEB’s risk-informed life cycle approach to compliance.

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: Addresses the non-compliances identified in the Audit Report and explains the methods and actions which will be used to “correct” them.

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 directed towards a result.

Procedure: A documented series of steps followed in a regular and defined order allowing individual activities to be completed in an effective and safe manner. The procedure will also outline roles, responsibilities and authorities required for completing each step.

Finding: The evaluation or determination of the adequacy of programs or elements in meeting the requirements of the NEB Act, Part II of the CLC, and their associated regulations.

Compliant: A program element meets legal requirements. The company has demonstrated that it has developed and implemented programs, processes and procedures that meet legal requirements.

Non-Compliant: A program element does not meet legal requirements. The company has not demonstrated that it has developed and implemented programs, processes and procedures that meet the legal requirements. A corrective action must be developed and implemented.

3.0 Background

This audit is one of a series three audits being undertaken by the Board with respect to NEB regulated facilities operated within Spectra Energy’s organization. The others are: the National Energy Board Processing Plant Regulations Audit of the McMahon Gas Plant and the concurrent audit of Spectra Energy’s British Columbia pipeline facilities (Westcoast). These audits identified that Spectra Energy is operating its facilities using a common organizational and technical management structure for all of the facilities noted. The findings are therefore similar in each audit, and the individual audit reports reflect this. During the audit, the Board reviewed and evaluated each set of facilities based on the individual activities, as well as the associated hazards and risks, as reflected in the individual audit reports.

SET-PTC holds the certificate and the assets for the SET-PTC pipeline system, which is owned and operated by Spectra Energy. Spectra Energy has ownership of several different pipeline systems in Canada and the United States. With respect to the SET-PTC pipeline system only, Spectra Energy sometimes refers to itself as Spectra Energy Transmission West, Spectra Energy Transmission BC or Spectra Energy BC Pipeline and Field Services. As such, the job titles of employees interviewed, as well as the titles of documentation reviewed, reflect these variations.

The SET-PTC pipeline system is shown in Figure 1, and runs from the Empress Plant near Burstall on the Alberta-Saskatchewan border, to Fort Whyte near Winnipeg, Manitoba. The pipeline is 933 km and transports natural gas liquids (propane and butane) to various SET-PTC shipping terminals and underground storage facilities. This OPR-99 audit included an assessment of SET-PTC’s Integrity Management, Safety, Environmental Protection, Emergency Management, Crossings and Public Awareness Programs (Programs) as they apply to its pipeline system.

Figure 1 - PTC Pipeline System

Figure 1 - PTC Pipeline System

4.0 Audit Objectives and Scope

The scope of the audit included an assessment of whether SET-PTC was fulfilling the requirements of:

  • the NEB Act;
  • the OPR-99;
  • CLC Part II;
  • Safety and Health Committees and Representatives Regulations made under Part II of the CLC;
  • Canadian Occupational Health and Safety Regulations (COHSR) made under Part II of the CLC; and
  • SET-PTC’s policies, programs, practices and procedures.

SET-PTC was also required to demonstrate the adequacy and effectiveness of the methods selected and employed within its Programs to meet the regulatory requirements above.

5.0 Audit Process

Audit Activities

The scope of the audit included an assessment of whether SET-PTC was fulfilling the requirements of:

  • Audit Opening Meeting (Calgary, AB) – 23 November 2012
  • Head Office Interviews (Regina, SK; Empress, AB) – 3 to 7 December 2012
  • Field Verification:
    • Richardson Terminal, Integrity Program Dig (KMP706.547), and Grenfell Pump Station/Pig Launching and Receiving Facility (KMP506).
    • Empress PTC right-of-way (Eastern Region) and Manson/Rapid City Pump Stations.
  • Audit Pre-Close-Out Discussion (Calgary, AB) – 9 January 2013
  • Final Audit Close-Out Meeting (Calgary, AB) – 15 January 2013
  • Draft Audit Report issued 7 February 2013
  • SET-PTC comments submitted to the Board 6 March 2013

The Board chose to audit SET-PTC by utilizing a risk-informed approach that included a review of previous compliance history. On 23 November 2012, an opening meeting was conducted with representatives from SET-PTC in Calgary, Alberta to discuss the objectives, scope and process of the audit, and to initiate the development of a schedule for conducting the audit site visits and staff interviews.

Daily debriefs were held at the end of each day of both head office interviews and field verification, to communicate issues to SET-PTC representatives. On 9 January 2013, an Audit Pre-Close-Out Discussion was conducted at SET-PTC’s offices in Calgary, where the results of the audit, including an outline of the draft audit non-compliances, were presented to SET-PTC. At that time, the Board’s auditors invited SET-PTC to provide any documentation that may mitigate, or negate, any non-compliances. A Final Audit Close-Out Meeting was held on 15 January 2013. SET-PTC offered no concerns with the Board’s findings as they were presented.

The Board’s Draft Audit Report was issued on 7 February 2013. On 6 March 2013, Westcoast submitted comments on the Draft Audit Report. These comments were reviewed by the Board and have been addressed, where appropriate, in the Appendices.

For a list of SET-PTC representatives interviewed, refer to Appendix VII. For a list of documents and records reviewed, refer to Appendix VIII.

6.0 Audit Results – Summary by Program Area

The audit identified a number of findings across the Programs that were evaluated. A summary of the findings in each Program area is as follows:

Integrity Management Program

SET-PTC demonstrated that it has an Integrity Management Program (IMP) for its pipeline facilities. However, SET-PTC has not met the Board’s expectations for a complete, robust and fully implemented IMP. Of particular note were the non-compliances with respect to management system sub-elements 4.4 - Internal Audit and 5.1 - Management Review.

Review of the non-compliant sub-elements and SET-PTC’s IMP, as implemented, indicates that the deficiencies generally do not reflect a complete system failure in any area. The audit identified that SET-PTC’s IMP includes and mitigates the majority of possible hazards to the pipeline system.

For details associated with the assessment of the management system elements of the IMP, refer to Appendix I: SET-PTC Integrity Management Program Audit Evaluation Table.

Safety Program

SET-PTC demonstrated that it has an established Environmental, Health and Safety Management System (EHS MS) with some elements and processes that allow for continual improvement. The EHS MS contains procedures for identified work tasks typically encountered by SET-PTC personnel. SET-PTC holds various meetings and completes reports which monitor and document the EHS MS safety component. SET-PTC has also implemented a record retention process which includes: appropriate types of records to be retained; retention and disposition timeframes; and disposal methods.

Although SET-PTC’s EHS MS has many of the elements required in a management system, SET-PTC has not met the Board’s expectations for a complete, robust and fully implemented Safety Program.

For details associated with the management system elements of the Safety Program, refer to Appendix II: SET-PTC Safety Program Audit Evaluation Table.

Environmental Protection Program

The audit of SET-PTC’s Environmental Protection (EP) Program revealed a number of non-compliant areas. The non-compliant sub-elements generally appear to be related to one of two basic deficiencies: a lack of formal and systematic procedures for the identification and evaluation of all legal requirements, as well as its environmental hazards and aspects; and a lack of professional environmental resources for the development and implementation of the EP Program.

The deficiencies identified do not reflect a complete system failure in any area. As SET-PTC’s EP Program utilizes reaction-oriented initiatives, it captures and mitigates most of the environmental hazards and aspects resulting from SET-PTC’s operations.

For details associated with the assessment of the management system elements of the EP Program, refer to Appendix III: SET-PTC Environmental Protection Program Audit Evaluation Table.

Emergency Management Program

Review of the Emergency Management (EM) Program for the SET–PTC pipeline facilities indicates that, while there are a number of non-compliant findings assigned, the company has a reasonably developed EM Program. The documents and records demonstrate that the company is ensuring that its staff, and potentially involved agencies, public and mutual aid partners, are appropriately informed and/or trained.

Review of the non-compliant findings made by the Board indicates that they are related to the formal development and consistent implementation of company-wide (Spectra Energy) management system procedures which apply to the SET-PTC EM Program.

The Board notes that the non-compliant findings in sub-elements 3.1 (Organizational Structure), and 4.4 (Internal Audits) have contributed to the non-compliant finding in sub-element 5.1 Management Review. In order to become compliant in these areas, senior management will need to develop and/or implement formal management processes to demonstrate that the EM Program continues to be adequately resourced, monitored and effectively reviewed.

For details associated with the assessment of the management system elements of the EM Program, refer to Appendix IV: SET-PTC Emergency Management Program Audit Evaluation Table.

Crossings Program

SET-PTC was able to demonstrate that it has established a Crossings Program to support the management of third party excavation and construction around its pipelines. However, there were findings of non-compliance in the policy, management of change, legal requirements and internal audit sub-elements due to a lack of formalized oversight of the Crossings Program, and a lack of integration within SET-PTC’s EHS MS. The audit identified that SET-PTC is undertaking work to manage and control the hazards associated with its facilities, processes and activities. Notwithstanding this, the audit identified a number of non-compliant findings. The majority of the non-compliant findings relate to SET-PTC’s lack of formal, proactive and systematic identification, review and management of its legal requirements, and its safety and environmental hazards across its Programs. The audit identified that the majority of hazards had been included in SET-PTC’s procedures and practices; however, these hazards were primarily identified by SET-PTC staff either through personal knowledge or in the operating permits issued by other regulatory bodies, rather than through required systematic reviews and assessment processes. This has resulted in SET-PTC being unable to demonstrate that all its Program sub-elements are compliant. With respect to these findings, the Board is of the view that the processes presently used by SET-PTC have identified the majority, and most significant, of its hazards and risks. The Board is of the view that these non-compliance findings do not pose an undue hazard during the development and implementation of a CAP to address the deficiencies.

For details associated with the assessment of the management system elements of the Crossings Program, refer to Appendix V: SET-PTC Crossings Program Audit Evaluation Table.

Public Awareness Program

SET-PTC was able to demonstrate that it has established a Public Awareness Program to support the effective communication with third parties who live and work around its pipelines. Deficiencies noted in the PA Program do not relate to its implementation, rather to the lack of integration within the EHS MS. The findings of non-compliance for the policy, management of change, legal requirements, organizational structure and internal audit sub-elements denote a lack of formalized oversight over, and evaluation of, the program’s continued ability to meet the Board’s expectations.

For details associated with the assessment of the management system elements of the PA Program, refer to Appendix VI: SET-PTC Public Awareness Program Audit Evaluation Table.

7.0 Conclusions

The audit identified that SET-PTC is undertaking work to manage and control the hazards associated with its facilities, processes and activities. Notwithstanding this, the audit identified a number of non-compliant findings. The majority of the non-compliant findings relate to SET-PTC’s lack of formal, proactive and systematic identification, review and management of its legal requirements, and its safety and environmental hazards across its Programs. The audit identified that the majority of hazards had been included in SET-PTC’s procedures and practices; however, these hazards were primarily identified by SET-PTC staff either through personal knowledge or in the operating permits issued by other regulatory bodies, rather than through required systematic reviews and assessment processes. This has resulted in SET-PTC being unable to demonstrate that all its Program sub-elements are compliant. With respect to these findings, the Board is of the view that the processes presently used by SET-PTC have identified the majority, and most significant, of its hazards and risks. The Board is of the view that these non-compliance findings do not pose an undue hazard during the development and implementation of a CAP to address the deficiencies.

8.0 Audit Findings Table

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

  1. 1.0 Policy and Commitment
    1. 1.1 Policy and Commitment Statements
  2. 2.0 Planning
    1. 2.1 Hazard Identification, Risk Assessment and Control
    2. 2.2 Legal Requirements
    3. 2.3 Goals, Targets and Objectives
  3. 3.0 Implementation
    1. 3.1 Organizational Structure, Roles and Responsibilities
    2. 3.2 Management of Change
    3. 3.3 Training, Competence and Evaluation
    4. 3.4 Communication
    5. 3.5 Documentation and Document Control
    6. 3.6 Operational Control – Normal Operations
    7. 3.7 Operational Control – Upset or Abnormal Operating Conditions
  4. 4.0 Checking and Corrective Action
    1. 4.1 Inspection, Measurement and Monitoring
    2. 4.2 Corrective and Preventive Actions
    3. 4.3 Records Management
    4. 4.4 Internal Audit
  5. 5.0 Management Review
    1. 5.1 Management Review

These elements and sub-elements are arranged to match standard management system elements to aid in the evaluation of the requirements. The Programs were audited against each of these elements and sub-elements. The detailed findings of these assessments are provided in the audit evaluation tables appended to this OPR-99 Final Audit Report. A summary of these results is presented in the SET-PTC Audit Findings Table that follows.

The Board notes that within the management system elements of its audit protocols there are conceptual linkages between sub-elements. As a result, a finding of non-compliance in a particular sub-element may necessarily result in multiple findings of non-compliance within each Program area.

SET-PTC Audit Findings Table
SET-PTC Audit Findings Table
Management System Element I –Integrity Management Program II – Safety Program III –Environmental Protection Program IV - Emergency Management Program V – Crossings Program VI – Public Awareness Program
1.0 POLICY AND COMMITMENT
1.1 Policy & Commitment Statement Compliant Compliant Compliant Compliant Non-Compliant Non-Compliant
2.0 PLANNING
2.1 Hazard Identification, Risk Assessment and Control Non-Compliant Compliant Non-Compliant Compliant Compliant Compliant
2.2 Legal Requirements Non-Compliant Non-Compliant Non-Compliant Compliant Non-Compliant Non-Compliant
2.3 Goals, Objectives and Targets Non-Compliant Compliant Compliant Compliant Compliant Compliant
3.0 IMPLEMENTATION
3.1 Organizational Structure, Roles and Responsibilities Compliant Non-Compliant Non-Compliant Non-Compliant Compliant Non-Compliant
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 Non-Compliant Compliant
3.4 Communication Non-Compliant Non-Compliant Non-Compliant Non-Compliant Non-Compliant Non-Compliant
3.5 Documentation and Document Control Compliant Non-Compliant Non-Compliant Compliant Non-Compliant Compliant
3.6 Operational Control-Normal Operations Compliant Compliant Non-Compliant N/A Compliant Compliant
3.7 Operational Control-Upset or Abnormal Operating Conditions N/A Compliant Compliant Compliant Compliant Compliant
4.0 CHECKING AND CORRECTIVE ACTION
4.1 Inspection, Measurement and Monitoring Compliant Compliant Non-Compliant Compliant Compliant Compliant
4.2 Corrective and Preventive Actions Non-Compliant Non-Compliant Compliant Compliant Compliant Compliant
4.3 Records Management Compliant Non-Compliant Non-Compliant Compliant Compliant Compliant
4.4 Internal Audit Non-Compliant Non-Compliant Non-Compliant Non-Compliant Non-Compliant Non-Compliant
5.0 MANAGEMENT REVIEW
5.1 Management Review Non-Compliant Non-Compliant Non-Compliant Non-Compliant Non-Compliant Non-Compliant

9.0 Abbreviations

  1. CAP: Corrective Action Plan
  2. CLC: Canada Labour Code Part II
  3. COHSR: Canada Occupational Health and Safety Regulations
  4. EHS MS: Environment, Health and Safety Management System
  5. EM: Emergency Management
  6. EP: Environmental Protection
  7. IMP: Integrity Management Program
  8. NEB: National Energy Board
  9. OMS: Operations Management System
  10. Management Program
  11. OPR-99: National Energy Board Onshore Pipeline Regulations, 1999
  12. SET: Spectra Energy Transmission
  13. SET-PTC: Spectra Energy Empress Management Inc. as General Partner and Agent for Spectra Energy Empress L.P. (SET-PTC)d protection programs. The company should have a documented procedure to identify and resolve non-compliances as they relate to legal requirements which includes updating the management and protection programs as required.
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