Plains Midstream Canada under fire for “non-compliance”

Plains Midstream Canada has been taken to task by the National Energy Board for “non-compliance” with an action plan following two high-profile oil spills.

Plains Midstream Canada has been taken to task by the National Energy Board for “non-compliance” with an action plan following two high-profile oil spills.

Company president David Duckett was called to Calgary NEB offices on Sept. 4 to account for Plains Midstream’s failure to implement a corrective action plan that was ordered following the spills, including the release of 3,500 barrels of oil into the Red Deer River near Sundre on June 7, 2012.

If not corrected, the company’s failings could a range of actions, including the shutdown of its pipeline system.

Plains Midstream did not respond to a request for comment on Wednesday.

In a letter to Duckett posted on the NEB’s website, the board notes that following a pair of meetings last January and March to assess progress “it was determined that the majority of the board’s non-compliant findings had not been addressed.”

The letter goes on to say the “board is concerned with Plains’ commitment and approach to compliance given the ongoing nature of the non-compliance.”

Singled out as non-compliant are the company’s internal audit program and management review processes.

An NEB staffer has been assigned to assess the company’s efforts and report back to the board.

If the company fails to meet regulatory requirements, the board may: invoke certain authorizations, impose safety orders, or start a proceeding whereby Plains must demonstrate why its pipeline system should not be shut down.

NEB spokeswoman Rebecca Taylor said the September meeting kicked off the board’s review of the company’s non-compliance issues.

The board is now gathering information and evidence and the staffer assigned to the file will come back with a recommendation.

“The full board will determine if additional information is required,” said Taylor.

No timeline has been set for that meeting, which will include at least three members of the board.

“At this point, we’re just gathering information. We’re in constant contact with the company. We are gathering facts and checking information.”

A separate Alberta Energy Regulator-ordered audit of Plains Midstream Canada released in August 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 auditors express confidence that the company has cleaned up its act since and say that additional approval conditions imposed should be lifted.

A full audit of the company’s operations was ordered in July 2013 when an investigation into the 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.

Numerous High- and Low- Risk Enforcement Actions were ordered against the company.

In June, Plains Midstream Canada was fined $1.3 million and apologized for the incidents.

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