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US pipeline agency slams Enbridge, calls for independent oversight of Wisconsin cleanup

The US agency that looks after pipelines, the Pipeline and Hazardous Materials Safety Administration, has issued an updated “Corrective Action Order” on the oil spill at Grand Marsh in Wisconsin, slamming Enbridge because the company’s “integrity management program may be inadequate.”

The order goes on to say:

PHMSA has communicated its longstanding concerns about this pattern of failures with Respondent [Enbridge] over the past several years. Given the nature, circumstances, and gravity ofthis pattern of accidents, additional corrective measures are warranted.

The Corrective Order tells Enbridge to file its cleanup plans with the PHMSA and to have its actions checked by an independent, outside agency.

Before the PHMSA allows Enbridge to restart Line 14, which runs from Superior, Wisconsin, to Mokena, Illinois, and is a part of the 1,900 mile-long Lakehead Pipeline system, which transports “hazardous liquid” from Neche, North Dakota, to Chicago, Illinois, with an extension to Buffalo,

Enbridge must (1) submit, for review and approval, a comprehensive written plan, including timelines for specific actions to improve the safety record of Respondent’s Lakehead pipeline system and (2) hire an independent third party pipeline expert to review and assess the written plan, which the third party will submit to PHMSA and to Respondent concurrently. Further, the third party expert must oversee the creation, execution and implementation of the actions identified in the plan, and must provide monitoring summaries to PHMSA and Respondent concurrently. Respondent must commit to address any deficiencies or risks identified in the third party’s assessment, including repair and replacement of high-risk infrastructure. The plan must be sufficiently detailed with specific tasks, milestones and completion dates.

At a minimum, the plan must address:
a. Organizational issues, including the promotion of a safety culture and creation of
a safety management system;
b. Facilities response plan;
c.Control room management;
d.Priorities for pipe replacement;
e.Training;
f.In-line inspection result interpretation;
g.Current engineering and probability of failure modeling;
h.Leak detection systems;
1.Sensor and flow measuring and valve replacement;
J.Integrity verification;
k.Quality management system; and
1.Any other risk, task, issue or item that is necessary to promote and sustain the
safety ofits pipeline system.

The agency notes also that

After receiving and analyzing additional data in the course of this investigation, PHMSA may identify other corrective actions that need to be taken. In that event, Respondent will be notified of any additional measures required and further amendment of the CAO will be considered. To the extent consistent with safety.

The order says Enbridge will be given an opportunity for a hearing prior to the imposition of any additional corrective measures.

The PHMSA Corrective Order was issued about the same time as Canada’s National Energy Board announced that it was conducting its own safety audit of Enbridge operations.

PHMSA Amended Corrective Action Order_08012012

NEB conducting safety audit of Enbridge

The National Energy Board is following up a highly critical report by the US National Transportation Safety Board on the Marshall, Michigan spill by conducting an overall safety audit of Enbridge pipeline management and practices. The NEB says the review began even before the NTSB report was released:

even prior to the release of the final report, we have been reviewing Enbridge’s management practices. In the next weeks and months, we will be conducting safety audits to review and confirm that improvements, particularly to their control room practices in Edmonton, are satisfactory.

In a letter to the public from NEB chair, Gaétan Caron, posted on the NEB website, the agency says: “Pipeline safety is and always has been of paramount concern to the National Energy Board and we recognize it is of growing concern to Canadians.”

The letter goes on to say:

Given recent events, it is important that Canadians understand how we hold companies accountable for public safety and protection of the environment and take swift and appropriate action when they do not.

The Board takes a proactive approach to preventing spills and releases, with the ultimate goal of seeing none at all. We require pipeline companies to anticipate, prevent, manage and mitigate potentially dangerous conditions associated with their pipelines.

To do this, we conduct compliance verification activities which include things such as inspections, compliance meetings, emergency exercises, audits and investigations on a regular basis with all companies we regulate. In the specific case of Enbridge, in recent years the NEB has conducted approximately 25 compliance verification activities per year, focusing on every aspect of their management system. In addition, the NEB imposed two precautionary pressure restrictions on Enbridge pipelines, one in 2010 and another in 2011, which remain in effect.

When the NEB identifies deficiencies in a company’s systems, projects or programs, we require the company to immediately implement changes to correct those deficiencies or to develop a corrective action plan for NEB approval. It is important to note that we aim to prevent incidents from occurring in the first place and we will take all available actions at our disposal to protect the environment and the public. The NEB may revoke authorizations, impose safety orders that restrict operations, issue stop-work orders and monetary penalties as well as pursue criminal prosecution.

The NEB has also reviewed the synopsis of the National Transportation Safety Board’s report on Enbridge’s Line 6B rupture in Michigan in 2010 to see what we can learn in the interests of public safety and environmental protection. A thorough review of the final report will be conducted in order to identify all lessons that may be applied to pipelines and companies under the Board’s jurisdiction, however even prior to the release of the final report, we have been reviewing Enbridge’s management practices. In the next weeks and months, we will be conducting safety audits to review and confirm that improvements, particularly to their control room practices in Edmonton, are satisfactory.

The NEB goes on to stay that Jobs, Growth and Long-term Prosperity Act (formerly Bill C-38) is giving the agency more bight:

the Government of Canada will be adding another tool to our compliance and enforcement toolkit: administrative monetary penalties (AMPs). The new AMP sections in the NEB Act set out the maximum daily penalties for both individuals and companies. For individuals the maximum daily penalty is $25,000 for each violation and for companies the maximum daily penalty is $100,000 per violation.

The Act stipulates that each day a violation continues is considered to be a separate violation. This means that separate penalties could be issued per infraction, per day with no maximum total financial penalty.

Some of the details of the AMPs design are described in the government amendments to the NEB Act, but other details, such as what activities will be considered violations, will be written in a new regulation. We have committed to have these new regulations ready to use by July 6, 2013.

The NEB says it will continue to make public any enforcement measures it takes.

As a part of our Action Plan on Safety and Environmental Protection, we began posting all documents related to Board-initiated safety and environmental compliance actions to our website in fall of 2011.

The Board is committed to continually improving the way we do business and we welcome any opportunity that allows us to do so in the interests of pipeline safety and environmental protection.

Enbridge has not yet responded to the NEB release.

Christy Clark’s Gateway conditions overturn west coast tanker moratorium, Dix tells reporters

Adrian Dix and Rob Goffinet — BC NDP leader Adrian Dix, right, speaks to Kitimat Councillor Rob Goffinet, left, after a breakfast meeting with District of Kitimat Council members on July 30, 2012. (Robin Rowland/Northwest Coast Energy News)

B.C. premier Christy Clark’s five conditions for the Northern Gateway Pipeline, in effect, overturn the west coast tanker moratorium, NDP and Opposition leader Adrian Dix told reporters in Kitimat, Monday, July 30, 2012.

Dix made the remarks after a breakfast meeting with members of District of Kitimat Council prior to embarking on a three day trip down Douglas Channel and the Inside Passage to see the proposed tanker route for himself.

The second of the five conditions for the pipeline, set out last Monday by Premier Clark calls for:

World-leading marine oil spill response, prevention and recovery systems for B.C.’s coastline and ocean to manage and mitigate the risks and costs of heavy oil pipelines and shipments

“It is an overturning of what’s been a government of BC policy for a long time, which is for a moratorium for super tankers on this part of the coast. That’s not a condition, that’s an overturning,” Dix said in a brief scrum with reporters after the breakfast and before heading to Kitamaat Village to start his boat trip.

“The frustration is that our premier’s position is that we should sell our coast got for money. The premier has a report that says the projects bad for the province, it’s bad for the economy, it’s bad for the environment, that’s the concluson of her report and now she says ‘we’ll forget about that if you give us a few bucks.’

“I don’t think most people agree with that in British Columbia and so what we’ve tried to do is to take a more serious approach. In this case, the province gave up our jurisdiction. If people are concerned about spills and concerned about the environmental impact as the Liberal purport to be, they wouldn’t have handed over the right to decide on environmental assessment fully to the federal government, which, by the way supports, the project.”

The Clark had government had declined to take part in the Northern Gateway Joint Review process and so did not produce any evidence for the panel prior to the filing deadline.

Dix said the Liberal policy on the JRP was, “Like a student who misses a deadline for a term paper, they missed the deadline to produce evidence in the process and now after the debate has gone on, the Premier wants to get into the debate.”

He concluded by saying, “This isn’t about her, it isn’t about me, it’s about the economy and the environment of this province for decades to come. And that’s the approach we’ve [the NDP Opposition] taken.”

The “informal” tanker “moratorium” has been in effect since 1972 and requires oil tankers transiting the west coast to remain fire out to sea and away from Dixon Entrance, Hecate Strait, and the Queen Charlotte Sound.

In 2009, Stephen Harper’s Conservative government said there was no moratorium on tanker traffic on the coast of British Columbia and have maintained that position ever since.

In December 2010, the House of Commons passed a non-binding motion to ban bulk oil tanker traffic in the Dixon Entrance, Hecate Strait and Queen Charlotte Sound.

Dix said he was, “In Kitimat to meet with the community and of course in Kitimat village with the Haisla. Later today he will go “for a trip down where the tankers will go if the Enbridge project succeeds, go down the Channel to Hartley Bay and then over the next couple of days to Bella Bella. Dix said hew as in the northwest to “take note of that in person. I always like to see things for myself, meet with people and hear what they have to say.”

New US report slams Enbridge for spill record, as scientific investigation opens into diluted bitumen

A new US report is slamming Enbridge for its record on oil spills, just as the BC government set out strict new conditions for building pipelines and tanker traffic in the province.

The United States National Wildlife Association issued a report today called Importing Disaster, The Anatomy of Once and Future Oil Spills. (pdf of report at the bottom of this page)

At the same time, the US Academy of Sciences has opened a new investigation into diluted bitumen.

A letter critical of Enbridge, previously overlooked by the US media is getting new traction, as the anniversary of the Marshall, Michigan, Kalamazoo River spill approaches on July 25.

Enbridge, so far, has not responded to the National Wildlife Federation report.

The environmental group opens the report by saying:

As the biggest transporter of Canadian tarsands oil into the U.S., Enbridge has aresponsibility to the American public to manage their operations in a manner that protects our comm unities and natural resources. But tarsands oil is a very different beast than conventional crude oil, and it is difficult to transport the former safely through pipelines that were designed for the latter. That’s because tarsands oil is more corrosive(due to its chemical mixture)and abrasive(due to high-gritminerals), weakening the pipes to the point that they are more susceptible t oleaks and ruptures. Remarkably, there are no standards in place to ensure that new pipelines are built, maintained and operated with this fact in mind.

The National Wildlife Association goes on to say:

fossil fuel companies have a ‘stranglehold’ on our political establishment, preventing even modest initiatives that could make our energy safer and cleaner. That lobby strategy keeps in place a system that’s led to 804 spills by Enbridge alone in the last decade, and a total of 6,781,950 gallons of oil spilled in the U.S. and Canada.

“Rather than focus on safety and cleanup, Enbridge is recklessly moving ahead with plans to expand their pipeline network in the Great Lakes region and the Northeast, and to double down on high carbon fuel that is proving nearly impossible to clean from Michigan’s waters,” said Beth Wallace, NWF’s Great Lakes outreach advisor.

NWF’s report recommends comprehensive reforms to break the cycle of spills and pollution that continue to threaten communities and speed global warming. Among them, the report calls for stronger safety standards that account for increased dangers associated with heavy tar sands oil, increasing investment in clean energy and efficiency, and campaign and lobbying reforms that would put impacted citizens on a level playing field with Big Oil in the halls of Congress.

The NWF report then says:

The Kalamazoo spill may have been a poster child for corporate negligence but it is far from the company’s only black mark. According to Enbridge’s own reports, between 1999 and 2010, they have been responsible for at least 800 spills that have released close to seven million gallons of heavy crude oil into the environment — or approximately half the amount of oil that spilled from the Exxon Valdez in 1989.

Canada has seen its own share of Enbridge heartache, including a 61,000 gallon spill earlier this summer near Elk Point, Alberta.

The National Wildlife Federation report is calling for stronger pipeline safety standards that account for the dangers of transporting bitumen sands oil from Canada amd wants more rigorous reviews of all pipeline projects. The report calls bitumen sands oil “the planet’s dirtiest oil.”

US media covering the National Wildlife release and looking to the anniversary of the Kalamazoo disaster, are now quoting an overlooked letter from the US advocacy group Public Citizen issued on June 25.

Concerned about Keystone XL pipeline, the advocacy group sent a letter to the Texas House of Representatives, recommending that the state should not wait for US federal rules to prevent tar sands pipeline spills. Public Citizen called the industry’s track record “troubled” and asked the committee to take up legislation that would give Texas broader authority over pipelines.

The committee will examine state regulations governing oil and gas well construction and integrity, as well as pipeline safety and construction, to determine what changes should be made to ensure that the regulations adequately protect the public. Public Citizen will testify in support of stronger rules for the Seaway pipeline (an existing line repurposed to carry tar sands instead of crude oil), the Keystone pipeline (whose southern leg is not yet built) and proposed future tar sands pipelines.

“These companies keep calling it petroleum, but it’s not – these are pipelines of poison,” said Tom “Smitty” Smith, director of Public Citizen’s Texas office.

The media reports on the NWF release are pointing to a new investigation by the US National Academy of Sciences on the safety of diluted bitmenl safety in the United States, that will be part of a report to the US Congress

An ad hoc committee will analyze whether transportation of diluted bitumen (dilbit) by transmission pipeline has an increased risk of release compared with pipeline transportation of other liquid petroleum products. Should the committee determine that increased risk exists, it will complete a comprehensive review of federal hazardous liquid pipeline facility regulations to determine whether they are sufficient to mitigate the increased risk.

On June 25, the committee added three industry experts to the panel as there is growing scrutiny over dilbit in the US, which could become an issue in the presidential race.

NWF Enbridge Oil Spill (PDF)

BC’s desire for “world leading” marine standards collides with Harper’s C-38 chain saw massacre

Today BC Premier Christy Clark’s government outlined a series of “world leading” standards for environmental protection on the ocean and on land, if pipeline projects like the Northern Gateway and the Kinder Morgan expansion are to go ahead.

One has to wonder what Premier Clark told Prime Minister Stephen Harper when she gave him the “heads up” call on the new policy last week?

After all, the BC Liberal’s call for “world leading” standards comes just weeks after the Harper’s government, in Bill C-38, changed environmental assessment into a pro-industry process, gutted the Fisheries Act protection for habitat and severely cut back the Department of Fisheries and Oceans and Environment Canada.

So far, in the province of British Columbia, with both the governing Liberals and opposition New Democrats have been spectacularly unsuccessful in persuading the Harper government to reverse the closure of the Kitsilano Coast Guard station.

In the background paper released along with the news release on the five conditions for pipeline and tanker safety, the BC government is calling for greatly enhanced Coast Guard resources and tanker monitoring as well as payment for oil spill response.

Among the conditions for marine safety enhancement BC is asking:

Current response times and planning capacity are less stringent than other jurisdictions like Alaska and Norway. For example, for the types of tankers being proposed for Canada’s west coast, Alaska requires planning for 300,000 barrels. In Canada, response organizations are only required to maintain response plans for spills up to approximately 70,000 barrels (10,000 tonnes). Further, Alaska allows responders 72 hours to reach the spill site, while Canada allows 72 hours plus travel time, which can sometimes add days to the response.
In shared bodies of water, the United States’ requirements exceed Canada’s. For example, the United States requires escort tugs for laden tankers and mandates industry pay for designated and strategically placed emergency response tugs. Canada does not have any similar requirements.
Ensure the Canadian Coast Guard adopts a unified command/incident command structure.
The Canadian Coast Guard has a unique response system which is only used in B.C. The United States, companies and governments worldwide use a unified command/incident command response structure for a range of emergency responses, including marine spills. By bringing the Coast Guard under this system, an effective, co-ordinated response is better ensured while reducing layers of approvals that can delay critical, prompt decision-making.

At Enbridge community briefings in Kitimat last year, the company’s own marine experts said that the 72 hour response time from Vancouver and Victoria for a possible spill in the Douglas Channel was completely inadequate. In its fillings with the Joint Review Panel, Enbridge has proposed setting up and funding its own response stations along the BC coast, although so far, Enbridge has not provided any details on how the response stations would be set up and how they would work.

In 2010, the auditor general reported that Transport Canada and the Canadian Coast Guard have not used a consistent or systematic approach to tanker traffic and spills nor are there formal processes for ensuring that risks are reassessed.

Sheila Fraser found that

Procedures are not in place to verify the Canadian Coast Guard’s readiness. In other words, there is currently no process for providing assurance that the federal component of the oil spill response system is ready to respond effectively.
The Coast Guard had not conducted a comprehensive assessment of its response capacity since 2000.
The results of the Coast Guard’s response efforts—which range from identifying the source of pollution to full cleanup—are poorly documented. There are also limitations with the Coast Guard’s system for tracking oil spills and other marine pollution incidents. These gaps affect its ability to conduct reliable analysis of trends in spills and know how well it is achieving its objectives of minimizing the environmental, economic, and public safety impacts of marine pollution incidents.

In the United States Senate, Canadian Coast Guard response for an oil spill in the Strait of Juan de Fuaca was described as “call the Americans”

For some search and rescue missions the federal government has indicated that it will rely more on the all-volunteer Royal Canadian Marine Search and Rescue service (formerly the Coast Guard Auxiliary) which is already stretched thin in some areas of the Pacific Coast, rather than the full time professionals from the Coast Guard service itself.

On the industry response, BC says

The federal government should review its rules and requirements to ensure industry-funded response funds are sustainable and adequate to fully cover a major response without requiring public money. Currently, the total amount of ship owner insurance and industry funding available for spill response is $1.3 billion. By comparison, the U.S. federal government maintains a spill fund that is forecast to grow to nearly $4 billion by 2016.

Again given the government backs and the Conservative government’s close ties with the energy industry, one has to wonder what if those provisions can be enforced, especially since more and more of the energy industry in Canada is owned off shore, increasingly in China with its sorry environmental record. (Globe and Mail CNOOC’s Nexen bid: A new test for Harper)

If there are to be “world-leading” standards for environmental protection in this country, it has to be paid for. So the question remains, who will pay for it? The federal government is cutting back, Alberta doesn’t want to raise the relatively small royalties it charges the energy industry and Canada is not likely to get a contribution from China.

Who pays to protect the coast and the northern interior going to be a big question for Stephen Harper in the coming months. With the polls showing Adrian Dix and the NDP leading in contention for a provincial election next year, and now with Christy Clark, apparently, demanding higher standards, will Harper open the Ottawa wallet now, will he wait until he faces a much tougher BC premier in Adrian Dix next year, or will he stubbornly hold his course of forcing Canada into his vision of a conservative, limited government nation, with, in the case of an oil spill on land or sea, that will cost the federal treasury billions, even if the energy industry picks up some of the tab?

Auditor General 2010 Report (pdf)

Auditor General 2007 report (pdf)

BC’s background information on conditions for pipeline projects

Here is the background information on the BC provincial government’s policy on pipeline projects, as released July 23, by the government:

BACKGROUNDER 1

World-leading marine spill preparedness and response systems for British Columbia

Protecting the province’s environment is a priority for its citizens and the B.C. government. While B.C. is not the government lead in terms of responding to a marine spill, advocating for world-class protection measures and procedures is a B.C. priority. Guided by an analysis of international marine response plans and procedures, the B.C. government is moving forward with 11 recommendations to the federal government aimed at improving Ottawa’s marine spill management. Chief among those recommendations are:

Encourage the federal government to strengthen requirements for certified marine spill response organizations.

Current response times and planning capacity are less stringent than other jurisdictions like Alaska and Norway. For example, for the types of tankers being proposed for Canada’s west coast, Alaska requires planning for 300,000 barrels. In Canada, response organizations are only required to maintain response plans for spills up to approximately 70,000 barrels (10,000 tonnes).

Further, Alaska allows responders 72 hours to reach the spill site, while Canada allows 72 hours plus travel time, which can sometimes add days to the response.

Encourage the federal government to enhance tanker requirements and available response capacity.

In shared bodies of water, the United States’ requirements exceed Canada’s. For example, the United States requires escort tugs for laden tankers and mandates industry pay for designated and strategically placed emergency response tugs. Canada does not have any similar requirements.

Ensure the Canadian Coast Guard adopts a unified command/incident command structure.

The Canadian Coast Guard has a unique response system which is only used in B.C. The United States, companies and governments worldwide use a unified command/incident command response structure for a range of emergency responses, including marine spills. By bringing the Coast Guard under this system, an effective, co-ordinated response is better ensured while reducing layers of approvals that can delay critical, prompt decision-making.

Current limits of liability rules strengthened to reduce government and public exposure to financial risk.

The federal government should review its rules and requirements to ensure industry-funded response funds are sustainable and adequate to fully cover a major response without requiring public money. Currently, the total amount of ship owner insurance and industry funding available for spill response is $1.3 billion. By comparison, the U.S. federal government maintains a spill fund that is forecast to grow to nearly $4 billion by 2016.

BACKGROUNDER 2

World-Leading on-land spill preparedness and response system for British Columbia

Land-based spill response is an area where the province has significant management responsibilities. The safe transportation and use of hazardous materials – including oil and natural gas – is critical to British Columbia’s economy and way of life. While land-based spills can be mitigated, they cannot be completely avoided; they are a consequence of a modern economy.

Major resource developments in the province’s northeast, coupled with proposals to open new, and expand existing, transportation corridors for petrochemicals, makes it timely for the province to consider its spill management capacity.

B.C. government’s proposed policy:

A provincial policy review has confirmed support for the “polluter pays” principle. In other words, those sectors (i.e. the oil and gas industry) that pose the risk must be responsible for all related mitigation and response costs.

Ministry of Environment staff are in the process of reviewing options to implement industry-funded and enhanced spill-management for land-based operations. It has three central elements:

An industry-funded terrestrial spill response organization.
An enhanced provincial Environment Emergency Program.
Natural resources damages assessment.
These changes would address some key issues facing B.C.’s land-based spill response practice, including new requirements for:

industry to have tested and government-approved geographic response plans; and
provincial response capacity that matches the known risk, including staff and resources to address spills.
The proposed policy would strengthen the province’s oversight role and facilitate the verification of industry capacity. Further, it would ensure that a stable source of funding is available to ensure the program continues to have a strong presence on-scene when a spill occurs. This role for government is critical to protecting the provincial economic, social and environmental interests that can be impacted when a spill takes place.

Next steps:

Immediately strike a terrestrial spill response working group.
Engagement with key industry associations and federal agencies.
Complete in-depth technical analysis of policy and options.
Public consultation on policy intentions paper.
Draft legislation based on the chosen policy direction.
Media Contact:

BACKGROUNDER 3

Consultation and partnerships with First Nations

In British Columbia, case law requires the B.C. government to consult with First Nations on any decision that may infringe on their treaty or Aboriginal rights. Where government makes a decision that will infringe on rights, there is a legal duty called “accommodation,” which can include mitigation measures, or even economic compensation. These legal requirements impact resource development and government decision-making.

Consultation is not only a legal obligation, it is part of good governance, and the B.C. government takes consultation and the courts’ direction on consultation very seriously.

B.C.’s approach is to work in partnership to give First Nations a meaningful role in land and resource management. B.C. is also the first province to share resource development revenue with First Nations, creating opportunities that flow benefits directly back into Aboriginal communities. B.C. has reached a suite of strategic agreements that create certainty for First Nations and industry by making it easier for business and First Nations to work together.

B.C. has achieved nine Reconciliation and Strategic Engagement Agreements with First Nations. These agreements provide First Nations with a defined role in the management of lands and resources and often include tools to allow for increased First Nation participation in local economies.
B.C. has 189 active forestry revenue-sharing agreements with First Nations. Since 2003, B.C. has provided approximately $323 million and access to 63.9 million cubic metres of timber to First Nations.
B.C. signed mine revenue-sharing agreements with Nak’azdli First Nation and McLeod Lake Indian Band for the Mount Milligan Mine and the Tk’emlúps and Skeetchestn Indian bands for the New Afton Mine. Further agreements are being negotiated.
Economic Benefit Agreements with five Treaty 8 First Nations have provided $52 million to date in First Nation benefits from gas and other development in northeast B.C.
The First Nations Clean Energy Business Fund provides capacity, equity and revenue-sharing funding for First Nation participation in this sector. Since 2010, the fund has provided nearly $2.5 million to 53 First Nations.
The B.C. government has collaborated with the Business Council of British Columbia to develop the best practices to increase general understanding of industry’s role. Increasingly, companies recognize that building relationships with First Nations makes good business sense, and are taking steps to form effective relationships that result in mutual benefits.

B.C. expects proponents to build strong, enduring relationships with First Nations potentially affected by development projects. Through those relationships, there should be discussion of possible impacts on Aboriginal interests, measures in place that would mitigate those impacts and a development of impact management and benefit agreements.

BACKGROUNDER 4

Fiscal benefits imbalance: Northern Gateway Pipeline

The Northern Gateway Pipeline is forecast to provide significant benefits to governments, communities and individuals through taxation and royalty revenues, employment and indirect and induced jobs.

According to a research report by Wright Mansell Research Ltd., the pipeline is likely to generate an incremental $81 billion in provincial and federal government taxation over a 30 year period between 2016 and 2046. Of the $81 billion, a full $36 billion is accrued by the federal government.

The remaining $45 billion in provincial revenues are split with $32 billion to Alberta, $6.7 billion to British Columbia and the remaining $6 billion split among the remaining provinces, with Saskatchewan appearing to benefit by nearly $4 billion. Thus, of the $81 billion in incremental taxation revenue, British Columbia stands to receive approximately only 8.2 per cent.

The $36 billion to the federal government is anticipated to be distributed across the country on a per capita basis as these revenues would be considered to be general and not dedicated revenues. There is no guarantee these revenues would be distributed in this manner.

In addition, with the creation of a new market for Alberta oil in Asia, prices are forecast to rise such that over the same 2016-46 period, there would be a price lift of $107 billion, split $103 billion to Alberta and $4 billion to Saskatchewan, which has begun to exploit its heavy oil and bitumen resources. This lift arises from an all increased value of all oil products that are being exported out of Canada with the elimination of the discount paid for Canadian oil.

Given the risk to British Columbia from land-based and coastal bitumen spills, British Columbia does not believe an equitable distribution exists for fiscal benefits. This imbalance must be addressed prior to British Columbia considering provincial support.

Enbridge files thousands of pages in document dump reply evidence to Northern Gateway JRP

Enbridge Northern Gateway has filed thousands of pages of “reply evidence” to the Northern Gateway Joint Review panel, responding to questions from the panel, from government participants like DFO, and intervenors.

Enbridge also used the filing to issue a news release saying it is adding $500 million in new safety features for its pipeline plans.

Northern Gateway Pipelines Reply_Evidence_ (summary of filings PDF)

Link to 43 item reply filing on JRP website.

In the introduction to the summary of the evidence the JRP asks

Should the fact that Northern Gateway does not respond to all points in a particular intervenor’s evidence or to all intervenor evidence be taken as acceptance by
Northern Gateway of any of the positions of intervenors?

To which Enbridge replies:

No. Northern Gateway does not accept any of the intervenor positions that are contrary tothe Application or additional material filed by Northern Gateway. Some of those positions will be dealt with by Northern Gateway in cross examination and argument rather than reply evidence, and others will simply be left to the JRP to determine on the basis of the filed evidence alone.

The reply covers a multitude of topics including

Economic Need and the Public Interest
Engineering
Avalanche Risk and Groundwater Concerns
Corrosivity of Diluted Bitumen
Improvements Since the Marshall Incident
Geotechnical Concerns
Geohazards Issues
Seismic Design Concerns
Recovery of Biophysical and Human Environment from Oil Spills
Corrosion, Inspection and Maintenance of Oil Tankers
Design and Construction of Oil Tankers
Pilotage

In response to numerous questions about the Marshall, Michigan, oil spill, Enbridge repeats what it said in an e-mail to “community leaders” earlier this week and in this morning’s news release, saying: “Enbridge has made a number of improvements since the Marshall incident.”

As part of the filing Enbridge has also filed an update on its aboriginal engagement program.

There are also detailed and updated reports on the company’s plans for the Kitimat valley region.

Enbridge responds to NTSB criticism in e-mail to northwest BC “community leaders”

Enbridge Northern Gateway has issued a detailed reply to the criticism of its operations contained in a preliminary report from the US National Transportation Safety Board to the 2010 oil spill at Marshall, Michigan, which called the company’s response like the silent movie era “Keystone cops.”

The note from Michele Parrett, Senior Manager, Community and Municipal Relations for Northern Gateway was sent to members of the District of Kitimat Council and presumably other politicians and community leaders along the proposed pipeline route.

The document was among those routinely released to the public at the regular council meeting on Monday, July 16, 2012 and is a much more detailed defence of Enbridge’s position than the news release issued after the NTSB report.

In the e-mail, Enbridge says it has updated its safety and response procedures and its corporate culture since the Michigan incident.

Despite widespread criticism of Enbridge from all sides of the political spectrum, that NTSB report does not seem to have had any impact on federal Environment Minister Peter Kent, who told The Canadian Press had had not yet read the NTSB report. Kent also said that unread report will not change the Conservative government’s mind about the Northern Gateway pipeline project, adding “Pipelines are still, by far, the safest way to transport petrochemicals in any form.”

Overview of NTSB Report into Line 6B incident at Marshall, Michigan

July 12, 2012

Dear Community Leader,

I’m writing you today to provide information regarding the United States’ National Transportation Safety Board’s (NTSB) release of its conclusions and recommendations yesterday, with regard to the Enbridge pipeline leak in Marshall, Michigan in July 2010.

Enbridge has not been waiting for the NTSB’s report before furthering to improve our safety standards. Since the incident we have undertaken our own internal investigation and incorporated the findings of that investigation into new practices and processes to improve our safety and reliability.

Enbridge and Enbridge Energy Partners has been working with the NTSB and other regulators throughout the course of the investigation so that we can take the necessary steps to prevent such an accident from occurring again. We are now reviewing the NTSB reports in detail to determine whether any further changes are required.

Enbridge has already implemented, in 2010 and 2011, appropriate operational and procedural changes based on its own detailed internal investigation. Enbridge’s overarching objective and business priority is to ensure the safety and reliability of our delivery systems for the people who live and work near our pipeline systems across North America, our employees and our customers.

In direct response to the Marshall accident, or as part of our ongoing improvement initiatives and activities, Enbridge has taken the following steps:

Pipeline and Facility Integrity

· Further heightened the importance of our pipeline and facility integrity program.

· Re-organized the functional areas that are responsible for pipeline and facility integrity.

· Substantially increased capital and operating budgets associated with maintenance and integrity programs.

· Undertook hundreds of internal inspections and thousands of investigative digs.

· Placed a renewed emphasis on the safety of our overall system.

Leak Detection

· Established the Pipeline Control Systems and Leak Detection department, doubling the number of employees and contractors dedicated to leak detection and pipeline control.

· Enhanced procedures for leak detection analysis.

· Updated control room management procedures.

· Implemented a Leak Detection Instrumentation Improvement Program to add and upgrade instrumentation across our system.

Pipeline Control and Control Centre Operations (CCO)

· Developed a Control Room Management (CRM) plan based on the U.S. Code of Federal Regulations and implemented a number of the sections, October 1, 2011, remaining sections implemented by August 1, 2012.

· Revised and enhanced all procedures pertaining to decision making, handling pipeline start-ups and shutdowns, leak detection system alarms, communication protocols, and suspected column separations.

· Changed organizational structures to better align, focus and manage employees’ span of control and workloads.

· Augmented CCO (Control Centre Operations) staff, adding training, engineering and operator positions.

· We also completed the design and construction of a new, world-class CCO in Edmonton, Alberta which was underway at the time of the accident.

Public Awareness

· Reviewed and strengthened Public Awareness Programs in the U.S. and Canada.

· Developing an industry-leading online and in-person training tool to provide Enbridge-specific information to emergency responders.

· In the U.S, we:

o Formalized the U.S. Public Awareness Committee.

o Improved the Program Effectiveness Evaluation process.

o Provided annual employee training for field employees across the company’s U.S. operations.

o Created a Public Awareness Hotline.

· In Canada, we:

o Formalized the Canadian Public Awareness Committee.

o Are creating a Canadian Public Awareness Database.

o Improved the landowner/tenant database.

o Developed a landowner newsletter.

o Established Community Relations positions in each region.

Emergency Response

· $50 million spent between 2012 and 2013 (projected) to improve our equipment, training and capabilities.

· Develop better tools for waterborne spills.

· In 2011, a cross-business unit response team was created for large-scale events requiring more resources that a single region could provide.

· In 2011, created a dedicated Emergency Response group in Operation Services for increased regional support.

· Conducting an Emergency Response preparedness assessment to enhance abilities to more rapidly respond and contain a significant release.

Safety Culture

· Reinforced a high level of safety and operational integrity across Enbridge in integrity management, third-party damage avoidance and detection, leak detection, incident response capacity, worker and contractor occupational safety, public safety and environmental protection.

· Implemented “Lifesaving Rules” and training for all Enbridge employees and contractors. The Lifesaving Rules are applicable to all employees and contractors, and are communicated, clarified and reinforced across all business units at Enbridge.

· Introduced new Safety Culture training sessions for all employees.

Over the past two years we have made significant improvements in the above areas. The NTSB’s findings will provide us with regulatory guidance and important information to help improve our performance and achieve our goal of zero spills.

We remain committed to a respectful, open and transparent review and discussion of the Northern Gateway Project. Should you have any questions, please do not hesitate to contact me or a member of the Northern Gateway team at the information provided below.

Sincerely,

Michele Perret

Senior Manager, Community and Municipal Relations

Enbridge Northern Gateway Pipelines

Enbridge files massive river oil spill study with the Joint Review Panel

Kitimat River map from Enbridge study — A Google Earth satellite map of the Kitimat River used as part of Enbridge Northern Gateway’s oil spill modelling study.

Enbridge Northern Gateway today filed a massive 11-volume study with the Joint Review Panel outlining possible scenarios for oil spills along the route including the Kitimat and Morice Rivers in British Columbia.

The study, carried out by three consulting firms, Stantec Consuting and AMEC Environmental & Infrastructure both of Calgary and RPS ASA of Rhode Island, is called “Ecological and Human Health Assessment for Pipeline spills.”

Overall the models created by study appear to be extremely optimistic, especially in light of recent events, such as the damning report on by the US
National Transportation Safety Board and the finding of violations by the US Pipeline and Hazardous Material Safety Administration with Enbridge operations during the 2010 Marshall, Michigan, spill and subsequent cleanup difficulties encountered by Enbridge.

The executive summary of the report begins by saying

This document presents conservatively developed assessments of the acute and chronic risk to ecological and human receptors in the unlikely event of a full bore pipeline break on the proposed Enbridge Northern Gateway Pipeline project. Three representative hydrocarbon types (condensate, synthetic oil
and diluted bitumen) were evaluated with releases occurring to four different rivers representing a range of hydrological and geographic characteristics, under both low-flow and high-flow conditions. The analysis indicates that that the potential environmental effects on ecological and human health from each hydrocarbon release scenario could be adverse and may be significant. However, the probability of the releases as considered in the assessment (i.e., full bore rupture, with no containment or oil recovery) is low, with return periods for high consequence watercourses ranging from 2,200 to 24,000 years. Therefore, the significant adverse environmental effects as described in this report are not likely to occur.

So the study says that it is “conservative” that means optimistic, that a full bore pipelink break with no containment or recovery is “an unlikely event” and would probably occur every 2,200 and 24,000 years. Not bad for a pipeline project that is supposed to be operational for just 50 years.

The summary does caution:

The analysis has also shown that the outcomes are highly variable and are subject to a great many factors including the location of the spill, whether the hydrocarbons are released to land or directly to a watercourse, the size of the watercourse, slope and flow volumes, river bed substrate, the amount of suspended particulate in the water, environmental conditions (such as the time of year, temperature and wind speeds, precipitation, etc.), the types of shoreline soils and vegetative cover and most significantly, the type and volume of hydrocarbon released.

The highly technical study is Enbridge’s official response to those intervenors who have “requested additional ecological and human health risk assessment studies pertaining to pipeline spills” and a request from the Joint Review Panle for more information about “the long term effects of pipeline oil spills on aquatic organisms (including the sensitivity of the early life stages of the various salmon species), wildlife, and human health.”

The report presents modelling on the release of three hydrocarbons, diluted bitumen, synthetic oil and condensate at four river locations along the pipeline route for their potential ecological and human health effects, under two flow regimes (i.e., high and low flow), broadly representing summer and winter conditions.

Modelling was done for four areas:

• Chickadee Creek: a low gradient interior river tributary discharging to a large river system
located up-gradient from a populated centre within the Southern Alberta Uplands region
• Crooked River: a low gradient interior river with wetlands, entering a lake system within
the Interior Plateau Region of British Columbia
• Morice River: a high gradient river system along the western boundary of the Interior
Plateau Region of British Columbia
• Kitimat River near Hunter Creek: a high gradient coastal tributary discharging to a large
watercourse with sensitive fisheries resources, downstream human occupation, and discharging to the Kitimat River estuary

In one way, the study also appears to be a partial victory for the Kitimat group Douglas Channel Watch because the model for the Kitimat River is based on a spill at Hunter Creek, which has been the subject of extensive work by the environmental group, but the consulting study is markedly optimistic compared to the scenario painted by Douglas Channel Watch in its presentations to District of Kitimat council.

The study describes the Kitimat River:

The hypothetical release location near Hunter Creek is southwest of Mount Nimbus, in the upper Kitimat River watershed, and flows into Kitimat River, then Kitimat Arm, approximately 65 km downstream. The area is in a remote location and maintains high wildlife and fisheries values. The pipeline crossing near Hunter Creek is expected to be a horizontal direction drilling (HDD) crossing. The release scenario
assumes a discharge directly into Kitimat River…

The streambed and banks are composed of coarse gravel, cobbles and boulders. Shoreline vegetation (scattered grasses and shrubs) occurs in the channel along the tops of bars. Vegetation is scattered on the channel banks below the seasonal high water mark and more developed (i.e., grasses, shrubs and trees) bove the seasonal high water mark.

Wildlife and fish values for the Kitimat River are high: it is important for salmon stocks, which also provide important forage for grizzly bears, bald eagles and osprey on the central coast. The Kitimat River estuary, at the north end of Kitimat Arm, also provides year-round habitat for some waterbirds and seasonal habitat for staging waterfowl.

There is considerable recreational fishing, both by local people and through fishing guides, on Kitimat River, its estuary and in Kitimat Arm. There is also likely to be a high amount of non-consumptive recreational activity in the area, including wildlife viewing, hiking and camping. The Kitimat River estuary, for example, is well known for waterbird viewing.

While no fish were captured at this location during the habitat survey, salmonoid fry and coho salmon were observed downstream. Previously recorded fish species in the area include chinook, coho and chum salmon, rainbow trout, Dolly Varden, and steelhead trout.

However, the next paragraph appears to show that a full bore rupture on the Kitimat River would have widespread consequences because it would cover a vast area of First Nations traditional territory, saying

Aboriginal groups with traditional territories within the vicinity of the Kitimat River hypothetical spill scenario site include the Haisla Nation, Kitselas First Nation, Kitsumkalum First Nation, Lax-Kw’alaams First Nation and Metlakatla First Nation.

It also acknowledges:

Oral testimony provided by Gitga’at First Nation and Gitxaala Nation was also reviewed in relation to this hypothetical spill scenario, although the traditional territories of these nations are well-removed from the hypothetical spill site.

The report then goes on to list “the continued importance of traditional resources” for the aboriginal people of northwestern BC.

especially marine resources. People hunt, fish, trap and gather foods and plants throughout the area and traditional foods are central to feasting and ceremonial systems. Food is often distributed to Elders or others in the community. Written evidence and oral testimony reported that Coho, sockeye, pink, and spring salmon remain staples for community members. Halibut, eulachon, herring and herring roe,
various species of cod, shellfish, seaweed, and other marine life are also regularly harvested and consumed, as are terrestrial resources, including moose, deer, beaver, muskrat and marten. Eulachon remains an important trade item. Written evidence provides some information on seasonality of use and modes of preparation. Seaweed is dried, packed and bundled and preserved for later use. Each species of
salmon has its own season and salmon and other fish are prepared by drying, smoking, freezing or canning. Salmon are highly valued and often distributed throughout the community…

Some areas used traditionally are not depicted geographically. Upper Kitimat River from the Wedeene River to the headwaters has long been used for trapping, hunting, fishing and gathering of various foods. Fishing, hunting and gathering activities take place along the lower Kitimat River and its tributaries. Marine resources are collected in Kitimat Arm, Douglas Channel, and Gardner Canal. Old village and
harvesting sites are located along the rivers and ocean channels in this vicinity.

Intertidal areas are important and highly sensitive harvesting sites that support a diversity of species. Many intertidal sites are already over harvested and are therefore vulnerable. Conservation of abalone has been undertaken to help the species recover. Some concern was expressed in oral testimony regarding the
potential for archaeological sites and the lack of site inventory in the area. Oral testimony made reference to the Queen of the North sinking and the potential for a similar accident to result in human health and environmental effects.

A spill at Hunter Creek

The model says that all three types of floating oil in Kitimat River under high-flow conditions would reach approximately 40 kilometres downstream from Hunter Creek while low-flow conditions showed variation.

Under what the study calls low flow conditions, most condensate would evaporate. The bitumen would cause “heavy shore-oiling” for the first 10 kilometres, with some oiling up to 40 kilometres downstream.

The most sedimentation would occur for synthetic oil, and the least for condensate. Synthetic oil under both flow conditions would have the largest amounts deposited to the sediments. This is because of the low viscosity of synthetic oil, which allows it to be readily entrained into the water where it may combine with suspended sediments and subsequently settle. Synthetic oil under high-flow conditions would result in the most entrained oil and so the most extensive deposition to the sediment. Diluted bitumen, for both flow conditions, would result in the most deposited on shorelines, with the remainder (except that which evaporated or degraded) depositing to the sediments.
The condensate also would also have significant entrainment, but higher winds prevailing in under low flow conditions would enhance evaporation and rapidly lower concentrations in the water as compared to high-flow conditions. In all scenarios, a large amount of entrained oil and high concentrations of dissolved aromatics would move down the entire stretch of Kitimat River and into Kitimat River estuary.

Long term scenario

The modelling appears to be extremely optimistic when it reaches four to six weeks after the pipeline breach, especially in light of the continued cleanup efforts in Michigan, estimating that the “fast-flowing” nature of the Kitimat River would disipate all the different forms of hydrocarbon in the study saying

a fast-flowing coastal river like Kitimat River, with gravel or cobble bottom would be affected by a large volume of crude oil released in a short period of time.

Oiling of shoreline soils is heavy in the reaches between the release point and 10 km downstream, becoming lighter to negligible beyond 10 km. Deposition of hydrocarbons to river sediment is greatest for the synthetic oil and diluted bitumen (high flow) scenarios extending up to 40 kilometres downriver, with predicted hydrocarbon concentrations in sediment approaching 1,000 mg/kg dry weight. Deposition of hydrocarbons to river sediment is considerably lighter for the diluted bitumen (low flow) and condensate scenarios. In these scenarios, oiling of river sediment is negligible….

It says that within four weeks of the end of the acute phase of the spill scenarios, concentrations in river sediments and river water would decline becoming quite low at the end of two years.

As for the affects on plants and invertebrates:

Oiling of shorelines would be extensive, particularly at assessment locations within 10 kilometres of the pipeline break location, under both the high and low flow scenarios, for synthetic oil and condensate. High loadings occur as far as 25 kilometres downstream, again asusming that damage would begin to disipate after four weeks declining over the next one to two years. Predicted effects are generally less severe for the diluted bitumen spill scenarios, due to lower expected loading of oil onto shorelines. Low to negligible shoreline oiling would occur for Kitimat River under most of the scenarios at the 40 kilometres assessment location and points downstream. Based on this assessment, very little oiling of shorelines would extend to the estuary and the environmental effects would be minimal.

The study goes on to say that the “model suggests that there would be no significant risk to fish health based upon chronic exposure to petroleum hydrocarbons for the oil spill scenarios in Kitimat River or the potentially affected areas within the estuary, either at four weeks or one to two years following the hypothetical spill events. Risk to developing fish eggs in Kitimat River and estuary at four weeks and one to two years again indicate no significant risk to developing fish eggs in spawning gravels.”

It also claims that “chronic risks” to wildlife would be minimal, with some elevated risk for “muskrat, belted kingfisher, mallard duck, spotted sandpiper and tree swallow,” if they were exposed to synthetic oil. The muskrat, mallard duck and spotted sandpiper
could be vulnerable to bitumen and diluted bitumen.

It then claims that “no significant effects of chronic exposure (to all hydrocarbons) would occur for grizzly bear, mink, moose, river otter, bald eagle, Canada goose, herring gull or great blue heron for the Kitimat River hydrocarbon spill scenarios.”

Again, it appears from the sutdy that the spotted sandpiper would be most vulnerable to “bulk weathered crude oil exposure” includingcondensate, diluted bitumen and synthetic oil.

For the Kitimat section it concludes:

In the unlikely event of an oil spill, recovery and mitigation as well as the physical
disturbance of habitat along the watercourse would be likely to substantially reduce the exposure of wildlife receptors to hydrocarbons as compared to the scenarios evaluated here.

Link to Volume One of the Enbridge Northern Gateway Report Ecological and Human Health Assessment for Pipeline Spills

US National Transportation Safety Board summary report on Marshall, MI, Enbridge oil spill incident blames deficient management and training

The United States National Transportation Safety Board has issued a summary report on the rupture of the the Enbridge pipeline and subsequent oil spill at Marshall, Michigan, in 2010.

The report says that the probable cause of the oil spill included deficient integrity management at Enbridge, which allowed previously known crack defects in corroded areas to spread until the pipeline failed; inadequate training of control center personnel by Enbridge, which allowed the rupture to remain undetected for 17 hours and insufficient public awareness and education, which allowed the release to continue for nearly 14 hours after the first notification of an odor to local emergency response agencies.

The full NTSB report will be issued in the coming weeks.

Enbridge responded in a news release that quoted outgoing Enbridge CEO Pat Daniel, who was in Washington for the release of the report:

“We very much appreciate the patience of residents in the communities who were affected by the Line 6B release,” said Patrick D. Daniel, Chief Executive Officer, Enbridge Inc. “Under the direction of the U.S. Environmental Protection Agency and local health authorities, the Kalamazoo River was re-opened last month for recreational use. We are also pleased to note that wildlife has returned to the area.”

“We believe that the experienced personnel involved in the decisions made at the time of the release were trying to do the right thing. As with most such incidents, a series of unfortunate events and circumstances resulted in an outcome no one wanted,” said Mr. Daniel.

Skeena Bulkley Valley Member of Parliament and NDP House Leader, Nathan Cullen, issued his own news release, saying, “Today’s report by the US National Transportation Safety Board (NTSB) into the deadly July 2010 Enbridge spill in Michigan identifies ‘a complete breakdown of safety at Enbridge’ and notes the company knowingly ‘failed to accurately assess the structural integrity of the pipeline.'”

“The findings are actually worse than we feared,” Cullen said. “They are a body blow of breathtaking proportions to Enbridge and yet another wake-up call to the Northwest of the dangers of allowing big oil to run a pipeline through our Northwest watersheds.”

Cullen commended NTSB chair Deborah Hersman for her frankness in terming Enbridge’s Michigan spill “”an accident that is a wake-up call to the industry, the regulator, and the public.”

Here is the complete summary as posted on the NTSB website

Enbridge, Inc. Hazardous Liquid Pipeline Rupture

July 25, 2010
Marshall, MI

NATIONAL TRANSPORTATION SAFETY BOARD
Public Meeting of July 10, 2012
(Information subject to editing)
NTSB/PAR-12/01

This is a synopsis from the National Transportation Safety Board’s report and does not include the NTSB’s rationale for the conclusions, probable cause, and safety recommendations. Safety Board staff is currently making final revisions to the report from which the attached conclusions and safety recommendations have been extracted. The final report and pertinent safety recommendation letters will be distributed to recommendation recipients as soon as possible. The attached information is subject to further review and editing.

Executive Summary

On Sunday, July 25, 2010, at 5:58 p.m., eastern daylight time, a segment of a 30-inch-diameter pipeline (Line 6B), owned and operated by Enbridge Incorporated (Enbridge) ruptured in a wetland in Marshall, Michigan. The rupture occurred during the last stages of a planned shutdown and was not discovered or addressed for over 17 hours. During the time lapse, Enbridge twice pumped additional oil (81 percent of the total release) into Line 6B during two startups; the total release was estimated to be 843,444 gallons of crude oil. The oil saturated the surrounding wetlands and flowed into the Talmadge Creek and the Kalamazoo River. Local residents self-evacuated from their houses, and the environment was negatively affected. Cleanup efforts continue as of the adoption date of this report, with continuing costs exceeding $767 million. About 320 people reported symptoms consistent with crude oil exposure. No fatalities were reported.

Conclusions

1. The following were not factors in this accident: cathodic protection, microbial corrosion, internal corrosion, transportation-induced metal fatigue, third-party damage, and pipe manufacturing defects.

2. Insufficient information was available from the postaccident alcohol testing; however, the postaccident drug testing showed that use of illegal drugs was not a factor in the accident.

3. Had the firefighters discovered the ruptured segment of Line 6B and called Enbridge, the two startups of the pipeline might not have occurred and the additional volume might not have been pumped.

4. The Line 6B segment ruptured under normal operating pressure due to corrosion fatigue cracks that grew and coalesced from multiple stress corrosion cracks, which had initiated in areas of external of corrosion beneath the disbonded polyethylene tape coating.

5. Title 49 Code of Federal Regulations 195.452(h) does not provide clear requirements regarding when to repair and when to remediate pipeline defects and inadequately defines the requirements for assessing the effect on pipeline integrity when either crack defects or cracks and corrosion are simultaneously present in the pipeline.

6. The Pipeline and Hazardous Materials Safety Administration (PHMSA) failed to pursue findings from previous inspections and did not require Enbridge Incorporated (Enbridge) to excavate pipe segments with injurious crack defects.

7. Enbridge’s delayed reporting of the “discovery of condition” by more than 460 days indicates that Enbridge’s interpretation of the current regulation delayed the repair of the pipeline.

8. Enbridge’s integrity management program was inadequate because it did not consider the following: a sufficient margin of safety, appropriate wall thickness, tool tolerances, use of a continuous reassessment approach to incorporate lessons learned, the effects of corrosion on crack depth sizing, and accelerated crack growth rates due to corrosion fatigue on corroded pipe with a failed coating.

9. To improve pipeline safety, a uniform and systematic approach in evaluating data for various types of in-line inspection tools is necessary to determine the effect of the interaction of various threats to a pipeline.

10. Pipeline operators should not wait until PHMSA promulgates revisions to 49 Code of Federal Regulations 195.452 before taking action to improve pipeline safety.

11. PII Pipeline Solutions’ analysis of the 2005 in-line inspection data for the Line 6B segment that ruptured mischaracterized crack defects, which resulted in Enbridge not evaluating them as crack-field defects.

12. The ineffective performance of control center staff led them to misinterpret the rupture as a column separation, which led them to attempt two subsequent startups of the line.

13. Enbridge failed to train control center staff in team performance, thereby inadequately preparing the control center staff to perform effectively as a team when effective team performance was most needed.

14. Enbridge failed to ensure that all control center staff had adequate knowledge, skills, and abilities to recognize and address pipeline leaks, and their limited exposure to meaningful leak recognition training diminished their ability to correctly identify the cause of the Material Balance System (MBS) alarms.

15. The Enbridge control center and MBS procedures for leak detection alarms and identification did not fully address the potential for leaks during shutdown and startup, and Enbridge management did not prohibit control center staff from using unapproved procedures.

16. Enbridge’s control center staff placed a greater emphasis on the MBS analyst’s flawed interpretation of the leak detection system’s alarms than it did on reliable indications of a leak, such as zero pressure, despite known limitations of the leak detection system.

17. Enbridge control center staff misinterpreted the absence of external notifications as evidence that Line 6B had not ruptured.

18. Although Enbridge had procedures that required a pipeline shutdown after 10 minutes of uncertain operational status, Enbridge control center staff had developed a culture that accepted not adhering to the procedures.

19. Enbridge’s review of its public awareness program was ineffective in identifying and correcting deficiencies.

20. Had Enbridge operated an effective public awareness program, local emergency response agencies would have been better prepared to respond to early indications of the rupture and may have been able to locate the crude oil and notify Enbridge before control center staff tried to start the line.

21. Although Enbridge quickly isolated the ruptured segment of Line 6B after receiving a telephone call about the release, Enbridge’s emergency response actions during the initial hours following the release were not sufficiently focused on source control and demonstrated a lack of awareness and training in the use of effective containment methods.

22. Had Enbridge implemented effective oil containment measures for fast-flowing waters, the amount of oil that reached Talmadge Creek and the Kalamazoo River could have been reduced.

23. PHMSA’s regulatory requirements for response capability planning do not ensure a high level of preparedness equivalent to the more stringent requirements of the U.S. Coast Guard and the U.S. Environmental Protection Agency.

24. Without specific Federal spill response preparedness standards, pipeline operators do not have response planning guidance for a worst-case discharge.

25. The Enbridge facility response plan did not identify and ensure sufficient resources were available for the response to the pipeline release in this accident.

26. If PHMSA had dedicated the resources necessary and conducted a thorough review of the Enbridge facility response plan, it would have disapproved the plan because it did not adequately provide for response to a worst-case discharge.

27. Enbridge’s failure to exercise effective oversight of pipeline integrity and control center operations, implement an effective public awareness program, and implement an adequate postaccident response were organizational failures that resulted in the accident and increased its severity.

28. Pipeline safety would be enhanced if pipeline companies implemented safety management systems.

Probable Cause

The National Transportation Safety Board (NTSB) determines that the probable cause of the pipeline rupture was corrosion fatigue cracks that grew and coalesced from crack and corrosion defects under disbonded polyethylene tape coating, producing a substantial crude oil release that went undetected by the control center for over 17 hours. The rupture and prolonged release were made possible by pervasive organizational failures at Enbridge Incorporated (Enbridge) that included the following:

Deficient integrity management procedures, which allowed well-documented crack defects in corroded areas to propagate until the pipeline failed.

Inadequate training of control center personnel, which allowed the rupture to remain undetected for 17 hours and through two startups of the pipeline.

Insufficient public awareness and education, which allowed the release to continue for nearly 14 hours after the first notification of an odor to local emergency response agencies.

Contributing to the accident was the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) weak regulation for assessing and repairing crack indications, as well as PHMSA’s ineffective oversight of pipeline integrity management programs, control center procedures, and public awareness.

Contributing to the severity of the environmental consequences were (1) Enbridge’s failure to identify and ensure the availability of well-trained emergency responders with sufficient response resources, (2) PHMSA’s lack of regulatory guidance for pipeline facility response planning, and (3) PHMSA’s limited oversight of pipeline emergency preparedness that led to the approval of a deficient facility response plan.

Recommendations

To the U.S. Secretary of Transportation:

1. Audit the Pipeline and Hazardous Materials Safety Administration’s onshore pipeline facility response plan program’s business practices, including reviews of response plans and drill programs, and take appropriate action to correct deficiencies.

2. Allocate sufficient resources as necessary to ensure that the Pipeline and Hazardous Materials Safety Administration’s onshore pipeline facility response plan program meets all of the requirements of the Oil Pollution Act of 1990.

To the Pipeline and Hazardous Materials Safety Administration:

3. Revise Title 49 Code of Federal Regulations 195.452 to clearly state (1) when an engineering assessment of crack defects, including environmentally assisted cracks, must be performed; (2) the acceptable methods for performing these engineering assessments, including the assessment of cracks coinciding with corrosion with a safety factor that considers the uncertainties associated with sizing of crack defects; (3) criteria for determining when a probable crack defect in a pipeline segment must be excavated and time limits for completing those excavations; (4) pressure restriction limits for crack defects that are not excavated by the required date; and (5) acceptable methods for determining crack growth for any cracks allowed to remain in the pipe, including growth caused by fatigue, corrosion fatigue, or stress corrosion cracking as applicable.

4. Revise Title 49 Code of Federal Regulations 195.452(h)(2), the “discovery of condition,” to require, in cases where a determination about pipeline threats has not been obtained within 180 days following the date of inspection, that pipeline operators notify the Pipeline and Hazardous Materials Safety Administration and provide an expected date when adequate information will become available.

5. Conduct a comprehensive inspection of Enbridge Incorporated’s integrity management program after it is revised in accordance with Safety Recommendation (11).

6. Issue an advisory to all hazardous liquid and natural gas pipeline operators describing the circumstances of the accident in Marshall, Michigan—including the deficiencies observed in Enbridge Incorporated’s integrity management program—and ask them to take appropriate action to eliminate similar deficiencies.

7. Develop requirements for team training of control center staff involved in pipeline operations similar to those used in other transportation modes.

8. Extend operator qualification requirements in Title 49 Code of Federal Regulations 195 Subpart G to all hazardous liquid and gas transmission control center staff involved in pipeline operational decisions.

9. Amend Title 49 Code of Federal Regulations Part 194 to harmonize onshore oil pipeline response planning requirements with those of the U.S. Coast Guard and the U.S. Environmental Protection Agency for facilities that handle and transport oil and petroleum products to ensure that pipeline operators have adequate resources available to respond to worst-case discharges.

10. Issue an advisory bulletin to notify pipeline operators (1) of the circumstances of the Marshall, Michigan, pipeline accident, and (2) of the need to identify deficiencies in facility response plans and to update these plans as necessary to conform with the nonmandatory guidance for determining and evaluating required response resources as provided in Appendix A of Title 49 Code of Federal Regulations 194, “Guidelines for the Preparation of Response Plans.”

To Enbridge Incorporated:

11. Revise your integrity management program to ensure the integrity of your hazardous liquid pipelines as follows: (1) implement, as part of the excavation selection process, a safety margin that conservatively takes into account the uncertainties associated with the sizing of crack defects from in-line inspections; (2) implement procedures that apply a continuous reassessment approach to immediately incorporate any new relevant information as it becomes available and reevaluate the integrity of all pipelines within the program; (3) develop and implement a methodology that includes local corrosion wall loss in addition to the crack depth when performing engineering assessments of crack defects coincident with areas of corrosion; and (4) develop and implement a corrosion fatigue model for pipelines under cyclic loading that estimates growth rates for cracks that coincide with areas of corrosion when determining reinspection intervals.

12. Establish a program to train control center staff as teams, semiannually, in the recognition of and response to emergency and unexpected conditions that includes supervisory control and data acquisition system indications and Material Balance System software.

13. Incorporate changes to your leak detection processes to ensure that accurate leak detection coverage is maintained during transient operations, including pipeline shutdown, pipeline startup, and column separation.

14. Provide additional training to first responders to ensure that they (1) are aware of the best response practices and the potential consequences of oil releases and (2) receive practical training in the use of appropriate oil-containment and -recovery methods for all potential environmental conditions in the response zones.

15. Review and update your oil pipeline emergency response procedures and equipment resources to ensure that appropriate containment equipment and methods are available to respond to all environments and at all locations along the pipeline to minimize the spread of oil from a pipeline rupture.

16. Update your facility response plan to identify adequate resources to respond to and mitigate a worst-case discharge for all weather conditions and for all your pipeline locations before the required resubmittal in 2015.

To the American Petroleum Institute:

17. Facilitate the development of a safety management system standard specific to the pipeline industry that is similar in scope to your Recommended Practice 750, Management of Process Hazards. The development should follow established American National Standards Institute requirements for standard development.

To the Pipeline Research Council International, Inc.:

18. Conduct a review of various in-line inspection tools and technologies—including, but not limited to: tool tolerance, the probability of detection, and the probability of identification—and provide a model with detailed step-by-step procedures to pipeline operators for evaluating the effect of interacting corrosion and crack threats on the integrity of pipelines.

To the International Association of Fire Chiefs and the National Emergency Number Association:

19. Inform your members about the circumstances of the Marshall, Michigan, pipeline accident and urge your members to aggressively and diligently gather from pipeline operators system-specific information about the pipeline systems in their communities and jurisdictions.

Previous Recommendation Reiterated in this Report

To the Pipeline and Hazardous Materials Safety Administration:

Require operators of natural gas transmission and distribution pipelines and hazardous liquid pipelines to provide system-specific information about their pipeline systems to the emergency response agencies of the communities and jurisdictions in which those pipelines are located. This information should include pipe diameter, operating pressure, product transported, and potential impact radius. (P-11-8)

A live and archived webcast of the proceedings will be available at http://www.capitolconnection.net/capcon/ntsb/ntsb.htm. To report any difficulties viewing the webcast, please call 703-993-3100 and ask for webcast technical support.

The complete report will appear on ntsb.gov in several weeks.

In its response, Enbridge went on to say:

“Safety has always been core to our operations. Our intent from the beginning of this incident has been to learn from it so we can prevent it from happening again, and to also share what we have learned with other pipeline operators,” said Stephen J. Wuori, President, Liquids Pipelines, Enbridge Inc. “Enbridge and EEP conducted a detailed internal investigation of this incident in the months following the release and have made numerous enhancements to their processes, procedures and training as a result of the findings of the investigation, including in the control center. Incident prevention, detection and response have also been enhanced. We will carefully examine the findings in the NTSB report to determine whether any further adjustments are appropriate.”

Enbridge says it has e worked closely and cooperatively with the NTSB throughout its investigation. The company isnow reviewing the summary report and will not comment specifically on the contents of the Final Report until it is released by the NTSB Board and analysis of the report has been completed.