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Regulator to increase annual checks on Alberta pipeline operators

03 April 2017

Alberta's energy watchdog said it would step up scrutiny of pipeline operators in the province with a greater number of reviews of their ability to detect and prevent spills. The Alberta Energy Regulator (AER) said on March 31 it planned to review the pipeline safety systems of around 20 operators each year, up from the six or so it has checked annually in the past.

Stock image
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The regulator said one of the factors that will help guide its decisions selecting the companies to review will be a new voluntary form asking operators about their pipeline safety systems and any gaps they have identified.

"We don't look too specifically at the particular pipelines; we look at the company, so does the company give us a reason to think they don't have or do have an adequate management system?" said David Helmer, the regulator's director of pipelines said.

According to the regulator, pipeline spills in Alberta are declining. The number of incidents fell by 44% in the past decade, with 460 reported in 2016, a 3% drop over the previous year.

But the watchdog believes every incident is preventable and wants the trend to continue, having set a goal to reduce the number of major spills by 2% over the previous two-year average.

The energy regulator recently issued one of its largest ever fines for a pipeline spill since it was formed four years ago. Murphy Oil was fined C$172,500 for a spill that went undetected for a month and a half in early 2015, dumping 1.4 million litres of condensate southeast of Peace River.

The regulator's investigation found Murphy Oil failed to inspect its pipelines for signs of corrosion for three years, failed to perform regular maintenance on its leak detection system and failed to train workers to understand signs of a leak.

The company said it made significant changes to its pipeline safety systems after the major spill.

Helmer said the energy regulator wants to make sure operators across the industry are maintaining their pipelines to prevent spills and have the proper controls and training in place to ensure they can quickly detect leaks.

In mid-April, the watchdog plans to ask roughly 50 oil and gas operators to fill out a form requesting they prove that they properly maintain their pipelines, have identified risks with plans to manage them and have found causes of previous pipeline incidents.

These 50 companies will be selected based on the level of risk in their pipeline systems, including those running larger pipeline networks and those with higher rates of incidents.
The four-page form is voluntary, though the regulator warns companies that don't fill it out, or do a poor job, will attract suspicion about whether their pipeline safety systems are adequate.

Helmer said the purpose of the form is not to punish those who may have gaps in their systems, but to work with those operators to fill the gaps.

Gary Leach, president of the Explorers and Producers Association of Canada, said the regulator was taking a "prudent" step by identifying operators it believes require extra scrutiny.

Meanwhile, Saskatchewan Energy Minister Dustin Duncan said the government would need time to review Husky Energy's report on an oil spill in the province. Husky Energy said shifting ground caused a section of its pipeline to burst in July, leaking an estimated 225,000 litres of crude and condensate into the North Saskatchewan River.

Husky is also cleaning up a pipeline spill at Cox Hill Creek in Alberta, discovered on March 16. A company spokesman said the company’s leak detection system was operational but the spill went unnoticed until it was found by a worker. The volume of oil spilled is unknown, but the AER said the crude has affected the creek.

Husky said its crews were using vacuum trucks to clean up the site, located 22 kilometres west of the popular hiking and camping community of Bragg Creek but the spill was in a heavily forested area and difficult terrain was hindering the speed of the clean-up.

The company spokesman said an investigation would uncover why its detection system did not pick up the leak. He said that despite this spill and the one in the North Saskatchewan River, Husky’s rate of pipeline incidents has been steadily declining.

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