Plains Midstream ordered to undergo third-party audit

The National Energy Board is turning the regulatory screws on Plains Midstream Canada, which was responsible for spilling thousands of barrels of oil into the Red Deer River in 2012.

The National Energy Board is turning the regulatory screws on Plains Midstream Canada, which was responsible for spilling thousands of barrels of oil into the Red Deer River in 2012.

A third-party audit of Plains Midstream’s pipeline operations in Alberta, Saskatchewan, Manitoba and Ontario was imposed on Thursday. It is one of six conditions outlined under a new order.

By the end of this month, the company must also provide documentation on immediate safety critical tasks; the operational controls used to reduce hazards and risks; and demonstrate how the company intends to ensure its controls are adequate.

“The NEB order is a direct result of Plains’ failure to correct non-compliant findings during the 2010 Management and Protection Audit Corrective Action Plan, and continued deficiencies throughout the company’s safety management and environmental protection programs,” says the board in a statement.

Plains, a subsidiary of Houston-based Plains All American Pipeline, was taken to task last September for its failure to comply with an action plan ordered following a pair of high-profile oil spills.

The company was responsible for the release of about 3,000 barrels of oil into the Red Deer River near Sundre on June 7, 2012.

In April 2011, Plains Midstream’s Rainbow pipeline leaked 28,000 barrels of oil northeast of Peace River, the province’s biggest spill in decades.

Plains Midstream pleaded guilty to violating provincial laws and was fined $1.3 million last year. It also apologized to Albertans for the environmental damage caused.

Plains president David Duckett was called on the carpet and a senior NEB staffer was appointed to assess the company’s progress and report back to the board.

That report was apparently not glowing.

“While the board recognizes that some progress has been made, the board has decided that additional measures are required to ensure that Plains’ pipeline and related facilities are maintained and operated in a manner that protects the public and the environment,” says a Jan. 15 letter to Duckett.

NEB spokesman Darin Barter said the board member who was working with the company was “not convinced the company could move forward on their own and the way to bring them into compliance was through the order.”

The Alberta Energy Regulator has previously clamped down on the company with similar sanctions.

Plains’ day-to-day operations, which includes 5,100 km of pipelines, will continue.

“I think it’s important to note there are no immediate safety concerns on the pipeline,” said Barter. “It’s being closely monitored by the NEB.”

Plains must submit its quality assurance program to the NEB for approval by the end of April and commit to meeting with NEB staff every quarter.

As well, Plains must pick a third-party auditor for NEB approval by the end of February. The final report on the company’s management system and environmental protection program must be done by the end of November. A similar report on Plains’ integrity management program is due by the end of 2016.

Before the end of the year, Plains must submit its response to the report and reasons for any deficiencies, as well as how they will be addressed.

NEB’s scrutiny of Plains is not meant to send a message to other pipeline companies and, perhaps reassure the public, that regulators are on watch.

“That message is probably going to be taken (but) it’s not the intent of the safety order,” he said, pointing out the NEB has been working with Plains for four years.

Plains did not respond to a request for comment on Thursday.

Don Bester, of the Alberta Surface Rights Group, was encouraged to see a federal agency getting involved in pressuring Plains to clean up its act.

“That’s pointing in the right direction, to tell you the truth,” said Bester, who lives in Innisfail.

“Somebody has to straighten out what’s going on in this province.”

Bester pointed out the provincial government promised a review of pipeline safety and nothing has come out.

“That’s just in nowhere land.”

pcowley@bprda.wpengine.com

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