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Go East

Forget Keystone XL. Forget Northern Gateway. Forget Line 9. This is the big one.


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Forget Keystone XL. Forget Northern Gateway. Forget Line 9. This is the big one.

According to documents filed this March with the National Energy Board (NEB), TransCanada’s proposed Energy East Pipeline project will stretch 4,600 kilometres, cross six provinces from Alberta to New Brunswick, cost $12 billion to build, carry up to 1.1 million barrels of crude oil per day and incorporate four new tank farms, 72 pump stations and two major marine terminals.

Once completed, the path of the Energy East Pipeline will be four times longer than Northern Gateway’s twisting route through the Rockies to the Pacific. It will carry more than three-and-a-half times the oil of the recently approved Line 9 reverse flow project. And it will cost more than twice as much as the contentious Keystone XL extension to Nebraska, making Energy East one of the largest infrastructure projects in Canadian history.

“Energy East will let Canadian [oil] producers expand their market, which will lead to jobs, energy security and government revenues across the country,” says TransCanada spokesperson Davis Sheremata. “There is strong market support for a pipeline with approximately 900,000 barrels per day of firm, long-term contracts to transport crude oil from Western Canada to eastern Canadian refineries and export terminals.”

While final route details won’t be settled until the project’s environmental site evaluation and public consultation sessions are concluded, the pipeline will run from a new batching and storage facility at Hardisty (Alta.) southeast to the Alberta-Saskatchewan border and then straight east across the prairies, passing just south of Regina and on past Winnipeg. After crossing the Manitoba-Ontario border, the route cuts a wide arc around the Great Lakes and through northern Ontario to Mattawa (Ont.) and then veers south, skirting the Ontario-Quebec border to Morrisburg (Ont.) on the St. Lawrence River. It follows the river northeast to a new marine terminal at Cacouna (Que.) on the south shore of the river’s gulf, before cutting back southeast through New Brunswick to the Canaport Energy East marine terminal near St. John on the Bay of Fundy.

During construction, some 2,997 kilometres (km) of existing natural gas pipeline will be converted to shipping crude oil and 1,518 km of new transmission pipeline will be built, as well as another 100 km of laterals and terminal interconnections. TransCanada expects to proceed with the necessary regulatory applications to construct and operate the pipeline and terminal facilities in mid-2014, Sheremeta says. Energy East is anticipated to be in service by 2018 for deliveries in Quebec and by late-2018 for deliveries to New Brunswick.

SAFETY IN NUMBERS

Over the last four years, there have been only nine serious injuries reported during the construction, operation or decommissioning of National Energy Board (NEB)-regulated pipelines.

These include three broken legs — one when a worker was struck by a side-boom counterweight and two more when metal objects fell during separate welding incidents — as well as a broken arm. One worker suffered serious burns to his hands and face during a flash fire, and another was burned when gas ignited while a pipe was being welded, information from the NEB notes. Lastly, a worker was overcome by hydrogen sulphide gas, another knocked unconscious by a falling tree and a third seriously injured in a car accident.

Since 2000, there have been a total of six fatalities, half of these in 2011, when a contractor was killed when pinned between two vehicles. Another worker was caught between two pieces of construction equipment, and a third was killed when a lawnmower overturned on an embankment. And in 2013, one sub-contractor was killed in a single-vehicle rollover.

TransCanada estimates that 2,300 full-time jobs will be created during planning and development, including those in environmental and engineering studies, survey services, helicopter support and specialized consulting activities. Construction will require another 7,700 full-time workers — including welders, mechanics, pipefitters, heavy equipment operators, electricians, truckers, safety coordinators and engineers. Once completed, some 1,000 full-time staff will be required to keep the pipeline operating efficiently and safely.

“An analysis conducted by Deloitte & Touche LLP estimates that Energy East will generate $35 billion in additional gross domestic product for Canada during six years of development and construction and over 40 years of operation,” says Sheremata. “Deloitte also found that Energy East will generate an additional $10 billion in tax revenues for all levels of government over the life of the project.”

MAKING THE CASE

“We look at pipelines as energy highways — similar to railways and truck routes — that deliver oil and gas from producing regions to consuming regions,” says Philippe Reicher, vice-president of external relations with the Canadian Energy Pipeline Association (CEPA). CEPA members, which include all the country’s major pipeline companies, transport 97 per cent of Canada’s natural gas and onshore crude oil to markets in Canada and the U.S.

“It will take multiple pipeline projects to multiple destinations to move production from the Western Canadian Sedimentary Basin, including the oilsands, to market,” Reicher says. Together with southern and western routes, the eastern pipeline projects are integral parts of Canada’s ongoing infrastructure development.

Because these operations are essentially national in scope, the federal government has taken the lead in their regulation. The design, construction and operation of pipelines must comply with the Onshore Pipeline Regulations (SOR/99-294), under the National Energy Board Act, as well as a number of CSA Group standards referenced in the regs. And while employees in most other industries are covered by provincial or territorial occupational health and safety regulations, pipeline workers are subject to the Canada Occupational Health and Safety Regulations (SOR/86-304), under the Canada Labour Code Part II.

To track the safety of its members’ operations, CEPA compiles key performance data on “significant failure incidents,” defined as spills of more than 50 (U.S.) barrels of product, spontaneous fires, or accidents involving serious injury or death. “Over the last 10 years, the industry has been averaging just 3.5 significant failure incidents a year, and that number is going down,” says Reicher. “Last year, there were none reported by any of our member companies.”

Occupational hazards, including long-distance driving, confined space entry, welding, working with heavy equipment, flash fires and spill response, might be expected to exact a serious toll every year. “But from a statistical perspective and compared to other industrial activities, we are a very, very safe industry,” says Reicher.

WELL-OILED MACHINE

TransCanada has developed a contractor safety management process that requires all contractors to be pre-qualified prior to doing any work for the company. Prospective contractors are also sent the TransCanada occupational health and safety specifications for prime/general contractors as part of the bid package. These specifications become part of any contract issued. And finally, the contractor must develop a project/site-specific health and safety program.

“The Energy East safety team takes a collaborative approach when working with its prime contractors to ensure the health and safety of all workers on the project,” says TransCanada spokesperson Davis Sheremata.

“If there are any questions regarding a specific procedure or program, the safety team and the prime contractor will work together to develop a practicable, safe approach to doing the work that will not compromise the health and safety of people.”

 

Despite the encouraging numbers, CEPA’s members are always looking to improve performance. “Pipeline companies are developing and adopting new technologies and sharing best practices in a collaborative effort to achieve zero incidents,” says Reicher. For example, in November 2013, CEPA members signed a Mutual Emergency Assistance Agreement, replacing a former ad hoc arrangement with a formal commitment to share resources, equipment and personnel in the event of a spill or other emergency. The agreement removes any legal barriers that can sometimes delay emergency response efforts.

SAFETY FIRST

Primary responsibility for the regulation of the pipeline sector — from approvals to operations to safety — falls to the National Energy Board. “The NEB is an independent regulator, expert tribunal and quasi-judicial body with the capacity and expertise to look at projects and determine whether they are in the public interest and should go forward,” says board spokesperson Whitney Punchak. “We are also a life-cycle regulator. We regulate energy projects while they are still on the drawing board, while they are under construction and in operation and until they are eventually abandoned.”

The energy board is also responsible for ensuring companies meet federal regulations related to the safety of employees, the public and the environment. According to section 47 of the Onshore Pipeline Regulations, a company must “develop, implement and maintain a safety management program that anticipates, prevents, manages and mitigates potentially dangerous conditions [during] construction, operation, maintenance, abandonment and emergency situations.” This requires systematic, comprehensive and proactive processes to identify hazards, train workers, communicate and document risks and evaluate progress.

Through a long-standing agreement with Employment and Social Development Canada, a number of NEB staff members have been designated as health and safety officers under the Canada Labour Code and/or safety officers under the Canada Oil and Gas Operations Act, which covers production and drilling in Northern Canada. These staff are charged with overseeing the health and safety of pipeline field personnel during construction site and facility inspections.

“Our number one priority is public and environmental safety,” says Punchak, “and that definitely includes worker safety. For any [new project] application, we look at the company’s management system, how they respond to emergency situations and whether their safety and compliance methods are on a par with our standards. Any discrepancies will be noted immediately and must be corrected. ”

AUDITING SAFETY

Each major pipeline company is also subject to a comprehensive audit — in addition to all the inspections, emergency response tests and face-to-face meetings that the NEB regularly conducts — every five years. TransCanada was the subject last year; Enbridge is under the microscope this year.

It’s a complex undertaking. “I have anywhere between 85 and 90 experts — inspectors, investigators auditors, engineers and safety officers — working on these major audits,” estimates Patrick Smyth, business leader of operations for the NEB and accountable for the audit process. Each audit examines the six primary components of a company’s management system: safety; environmental protection; integrity; pipeline crossings and public awareness; emergency management; and security.

“We look at the company’s documentation on, for example, its hazard identification program, review some sample reports and determine if there are any problems,” says Smyth. “Then we go out in the field to validate what’s really happening and ensure that the inspections and assessments are being done, the safety meetings and toolbox chats are being held.”

At the end of each inspection, there is a “close-out” meeting to discuss any concerns, so that the company has a chance to close that compliance gap immediately, Smyth says. And if the NEB inspectors or officers discover an immediate or imminent threat to human health or the environment, they have an array of regulatory tools at their disposal and can require a company to perform tests, undertake corrective measures or even suspend activities at a worksite until the hazardous or detrimental situation has been remedied.

STEP BY STEP

According to a detailed summary of its pipeline integrity program prepared for Pipeline Magazine, TransCanada says it has invested an average of $900 million on proactive inspection and maintenance programs over the past three years. In addition, Energy East will take several steps to minimize the chances of a pipeline leak and to detect any leaks quickly:

• TransCanada inspectors will be present at the mills to ensure that the pipe is manufactured and coated according to company standards
and federal regulations;

• Proven external corrosion prevention technology will be implemented, including a fusion bonded epoxy coating and cathodic protection system;

• Each weld made during pipeline construction will be examined utilizing radiographic or ultrasonic technology to ensure integrity;

• Before the pipeline is put into service, its integrity will be pressured tested at a much higher than normal operating pressure;

• Periodic internal cleaning inspections and random product sampling will be undertaken to mitigate internal corrosion. Chemical corrosion inhibitors, biocides, corrosion coupons or probes will be used as necessary;

• High-resolution inline inspection tools will be used during operations to detect internal and external defects;

• A SCADA (supervisory control and data acquisition) system in the company’s operations control centre will monitor pipeline flow, pressure, temperature and equipment status on a continuous basis; and

• The pipeline system is designed to shut down and/or isolate sections of the pipeline using valves that can be remotely activated and controlled by the control centre. Other valves in the pipeline system (called check valves) will close on reverse pressure. 

In February 2014, the NEB released the audit results of TransCanada’s Integrity Management Program, which sets out the tools, technologies and actions used to ensure its pipelines are safe and remain that way over time. The audit showed that while the company identified the majority of the hazards and risks, including the most significant ones, it was “non-compliant” in four areas: hazard identification, risk assessment and control; operational control in upset or abnormal operating conditions; inspection, measurement and monitoring; and management review. Once the final audit was posted on the NEB website, the company had 30 days to draft and submit a corrective plan that laid out the actions it would take, and the timing of those actions, to correct any deficiencies.

It’s a cooperative process designed to improve safety. “I think it’s safe to say that our assessment has not found any immediate hazards that must be addressed,” says Smyth. “A program may be fairly sophisticated but not entirely implemented, so our staff will follow up on all the deadlines in the corrective plan to ensure all deficiencies are completely corrected.”

The NEB audits on the remaining components of TransCanada’s management plan, including its occupational health and safety program, had not been released at press time.

THE NEXT STAGE

TransCanada is expected to file its comprehensive application for the Energy East project, together with the supporting studies and other evidence about the project’s effects on the environment and public safety, sometime in the third quarter of 2014. The NEB will then review the application for completeness and, if satisfied, issue a hearing order.

That’s when the clock starts ticking. According to the service standards in the National Energy Board Act, once a proponent’s application has been judged complete, the NEB has 15 months to undertake its own assessment, hold any hearings, look at the information submitted by proponents, intervenors or other commenters and then prepare and issue its final decision, along with any conditions it chooses to add. And there will be a hearing; under the act, the NEB must conduct a public hearing for any project involving more than 40 kilometres of pipeline.

“The assessment is undertaken by a team of NEB staff experts, including engineers, economists and environmental scientists,” says Punchak. “But until we get the formal application, we won’t know how it will all play out. Where and how the hearings will be conducted is still to be determined.” In the meantime, the NEB will be conducting online technology-based info sessions, undertaking Aboriginal engagement and providing both online and one-on-one support with the public and other stakeholders on the approval process.

Along with the hearing order, the NEB will also release its application for intervenors. Those people who may be directly affected by the project and/or have relevant information to contribute can take part, either as full-fledged intervenors or by simply submitting a letter of content. It appears there will be no shortage of landowners, environmental groups, First Nations, industry associations, provincial agencies and municipalities lining up to fill out those application forms.

DEVIL’S IN THE DETAILS

It may be too early to tell if TransCanada’s safety plans are adequate. “Everything’s in the details, and we haven’t seen the company’s detailed plans for Energy East yet,” says Fred Wilson, director of strategic planning for Unifor. “However, there’s not a lot to be desired in the pipeline sector’s safety record. I don’t know whether accidents are becoming more frequent or we are just hearing more about them these days, but we do know that environmental releases and worker safety are closely related,” he argues.

Unifor represents approximately 11,900 Canadian petroleum workers, both upstream — in the oilsands or working offshore — and downstream in the refineries, gas plants and petrochemical facilities. “Safety is regulated in the pipeline sector, but those regulations are not always enforced,” Wilson contends. “Pipeline safety issues require heightened vigilance. There has got to be zero tolerance for anything that can impact pipeline integrity.”

While Unifor will be involved in the upcoming Energy East approval process, the union has not yet taken a firm position — either for or against — the project. That will depend, in part, on whether the pipeline is designed to meet the country’s sustainable energy security needs by delivering crude to Canadian refineries for processing or will be used primarily to export Alberta bitumen to foreign markets. “We will have to put the economic and environmental rationale under a critical lens before we make our decision,” says Wilson.

In terms of the environmental, public health and spill risks they pose, Enbridge’s Line 9 and TransCanada’s Energy East project are absolutely equivalent, says Adam Scott, climate and energy program manager with Environmental Defence. Both companies are converting gas pipelines to carry diluted bitumen (or dilbit) east for the first time. And both projects could cause a major spill into one of the dozens of waterways they cross, he says.

“Industry is not always truthful about their spill cleanup capabilities,” charges Scott. “In many cases, they do not recover more than a tiny fraction of the oil spilled. The rest contaminates soils, sediments and, in the case of dilbit, sinks to the bottom of rivers, resulting in long-term environmental and human exposure to toxic chemicals,” he says.

In a written response to Pipeline Magazine, TransCanada says it will take “special precautions to significantly reduce the risk of a pipeline rupture and spill in the vicinity of a water crossing.” This could include using thicker-walled pipe and installing shut-off valves on both sides of the crossing to quickly stop the flow of oil if instruments detect a drop in pipeline pressure (indicating a potential leak).

EXPLOSIVE RISKS

A major spill or release could also threaten the health of first responders. “Some of the diluents in dilbit, such as benzene, are highly volatile and evaporate almost instantly on exposure to air,” says Scott. “And despite industry studies, there is also anecdotal evidence that dilbit is more corrosive.” The eastern pipelines could also carry Bakken shale oil — the kind that exploded during the Lac-Mégantic train wreck in July 2013. “It has a flammability comparable to gasoline and poses a very high fire and explosion risk,” says Scott.

For its part, the Energy East Pipeline will be designed to transport a variety of crude types, including light crude, synthetic crude, heavy crude and dilbit. “Diluted bitumen has similar characteristics and behaves the same way as conventional crude oils, which initially floats in water,” TransCanada says. However, crude oil does have the potential to sink or become submerged if allowed to “weather” and in turbulent water, “making swift response to a spill in water necessary.”

But it’s not just about spills and fires. “Those in the oil industry need to understand that a significant amount of the opposition to these pipelines has to do with climate change. A project like Energy East will have a massive impact on greenhouse gas (GHG) emissions,” says Scott. “We are not trying to attack the people working to make the shipping infrastructure safer, but there are bigger issues in play here.”

A recent report by The Pembina Institute says that the Energy East pipeline will facilitate the expansion of production in the oilsands, generating an estimated 32 million tonnes of GHG, equivalent to the tailpipe emissions produced by seven million cars. “Even at today’s production levels, the oilsands sector has significant environmental impacts,” says Clare Demerse, director of federal policy for the institute. “The Energy East pipeline would provide oilsands companies with significant new access to global oil markets,” allowing them to increase production levels and further increasing GHG emissions.

Environmental groups do not buy the argument that stopping the pipeline would force more oil into rail cars, with all the risks that may involve. “Analysts comparing the spill risk of pipelines to trains have typically concluded that while trains spill more often, pipelines spill larger volumes,” says Demerse. “It’s clear that the regulations governing crude-by-rail in Canada need to be strengthened. However, the reality is that no method of transporting crude will ever be 100 per cent safe. The safest choice of all — both for communities and the world’s climate — is to use less oil.”

This pipeline infrastructure is essential to the pace and scale of the oilsands expansion that the energy industry plans, says Scott. “The industry has already maxed out the rail transport capacity and new tanker cars are on backorder for years. If Energy East doesn’t go through, the planned oilsands production expansion doesn’t go through.”  PL

William M. Glenn is a writer in Toronto.

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