Plains Midstream Canada failed to meet all legislated requirements: audit

An Alberta Energy Regulator-ordered audit of Plains Midstream Canada following a pair of high-profile spills found the company failed to fully meet 18 of 55 legislated requirements.

An Alberta Energy Regulator-ordered audit of Plains Midstream Canada following a pair of high-profile spills found the company failed to fully meet 18 of 55 legislated requirements.

As well, the company only fully complied with 22 of 58 criteria based on benchmark practices or criteria developed through interpretation of regulations in the oil and gas industry, says the audit report released on Monday.

Despite that less-than-stellar record, Alberta Energy Regulator (AER) auditors express confidence that the company has cleaned up its act since and say that additional approval conditions imposed should be lifted.

Since a pair of high-profile spills, including a June 7, 2012, spill on the Red Deer River just downstream of Sundre, Plains Midstream has updated its practices to go beyond minimum requirements and is “moving towards building more rigour into its organization,” says the report.

Several experienced staff have been hired and management oversight improved.

The report goes on to say that as long as the company continues improving its oversight and management systems, the “AER is comfortable that the legislated criteria that were identified as partially met should not have material effect on PMC’s ability to maintain ongoing compliance.”

The AER says it intends to follow up to ensure that Plains improves its risk reduction activities.

In a statement released on Tuesday, Plains Midstream says the company’s “goal is to meet or exceed compliance by implementing leading practices, such as our industry-leading watercourse management program currently in use.

“Many of the findings have already been implemented while others have action plans and timelines developed for completion.”

A full audit of the company’s operations was ordered in July 2013 when an investigation into the 3,500-barrel Sundre spill found numerous failings, including a failure to conduct annual inspections of water crossings, failure to do an engineering assessment of the pipeline and a failure to demonstrate an emergency management process or keep response plans up to date.

The company was also responsible for an April 2011 spill in its Rainbow pipeline northeast of Peace River that spilled 28,000 barrels (4.5 million litres) of oil over 20 acres.

That mess led to numerous High-Risk Enforcement Actions against the company in February 2013.

Don Bester, a longtime surface rights activist, was not impressed by the audit’s findings.

“It doesn’t matter what these companies do, they are still going to be given the green light for everything they do anyway,” said Bester, who lives in Innisfail.

He has little faith that Plains Midstream’s problems are in the past, pointing out that the company oversees a large network of older gathering lines.

“It’s going to happen again, we know it.”

AER spokesman Darin Barter said they are “encouraged” by the company’s response.

“They have taken considerable steps to ensure that they are able to meet the regulations in Alberta.

“We are going to continue to focus on the company. I don’t want there to be a perception that it’s over and that’s it.”

Next year, the company’s operations will be reviewed again and they will be then subject to semi-annual reports.

“What we want to see is long-term progress.”

Barter said the case shows that companies that aren’t meeting their obligations and end up facing high-risk enforcement actions will be watched closely.

It is expected that Plains Midstream’s experience will send a message to other industry players.

“In Alberta, as a company you are required to follow the regulations. If you can’t, you can’t operate. That is the message and we hope that the industry sees that and hears that loud and clear.”

pcowley@bprda.wpengine.com

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