Stepping-up regulation of Canada’s pipeline industry

By ,

In July of 2013 as BP executives were testifying before courts for the Deepwater Horizon oil spill, the National Energy Board – the Canadian agency responsible for ensuring the safe development of Canada’s oil and gas resources – were busy making changes to their regulations.

"Offthepipe" by Beeblebrox - Own work. Licensed under CC BY-SA 3.0

“Offthepipe” by Beeblebrox – Own work. Licensed under CC BY-SA 3.0

The goal of these changes was to create a proactive regulatory approach with the aim of preventing incidents before they occur and establishing a legal mechanism to hold corporate executives accountable for environmental and safety negligence. The repercussions of those regulatory changes have started to take hold and will fundamentally change the way that pipeline owners and operators conduct their business.

 

Included in those regulatory changes are two important modifications to regulations under the National Energy Board Act: The creation of the Administrative Monetary Penalties Regulations (National Energy Board) and amendments to the National Energy Board Onshore Pipeline Regulations. The purpose of the Administrative Monetary Penalties Regulations is to establish a framework of fines for those who own or operate a pipeline. Changes to the National Energy Board Onshore Pipelines Regulations (“the Pipelines Regulations”) mandate the creation of a management system and a cyclical auditing program. The management system prescribed in the Pipeline Regulations is very similar to that suggested under s.4.3.2 of the ISO 14001 standard. Namely, those who own or operate a pipeline must have an activity-based register which outlines all the activities that take place within their operations. This register must show the links between operational activities and legal requirements, if any.

According to the Canadian government, in 2013 there were about 825,000 km of transmission, gathering and distribution lines in Canada, transporting 1.3 barrels of crude oil and petroleum products and about five trillion cubic feet of natural gas. The pressure on the owners and operators of these facilities is mounting.  The National Energy Board has increased its’ audits and is encouraging compliance by handing out fines.  In 2015, ten fines were given, totaling $570,000 CAD and six were given in 2014, amounting to $ 213,000 CAD.

"Bill McKibben at Stop the Keystone XL pipeline rally" by chesapeakeclimate - Bill McKibben. Licensed under CC BY-SA 2.0

“Bill McKibben at Stop the Keystone XL pipeline rally” by chesapeakeclimate – Bill McKibben. Licensed under CC BY-SA 2.0

 

Outside of the government, environmental non-governmental organizations are increasingly using online activism, such as Sierra Club’s Twitter #Shellno campaign, to encourage those in the oil and gas industry to take their environmental and safety obligations seriously.  It is now essential that all members of the Canadian oil and gas industry implement a modern, rigorous and open legal management system and auditing platform.