A Primer on the Project
The project was proposed by Northern Gateway Pipelines Limited Partnership and involves the construction of two pipelines from Bruderheim, Alberta, to the town of Kitimat in British Columbia. One pipeline would carry an average of 525,000 barrels per day of petroleum products west to Kitimat. The other pipeline would carry an average of 193,000 barrels of condensate per day to Bruderheim.
The project also involves the construction and operation of the Kitimat Marine Terminal. The Kitimat Terminal would have 2 tanker berths, 3 condensate storage tanks, and 11 petroleum tanks. From the Kitimat Terminal, tankers would transport the petroleum products to existing and future refiners in Asia and the United States.
The JRP was established to assess the environmental effects of the project and to review the application under the Canadian Environmental Assessments Act and the National Energy Board (NEB) Act. The project’s approval by the JRP in December 2013 included 209 conditions. With the project receiving conditional approval by the federal government, the conditions form part of the certificates issued by the NEB to authorize the project. For that reason, Northern Gateway must comply with all of the conditions in the certificates.
The 209 conditions recommended by the NEB are broken down into three categories: pre-construction, construction and pre-operation, and post-commencement of operations. Of particular interest are those conditions related to emergency management. A major concern with respect to the project is the risk of pipeline leaks and spills along the pipeline route and at the Kitimat Terminal. Emergency management plays a critical role in enabling companies to anticipate, prevent, manage, and mitigate the consequences of an emergency.
The Regulatory Framework
Before delving into the conditions for the project concerning emergency management, it is important to understand the applicable regulatory framework. Given that the pipelines for the project are interprovincial, they are federally regulated by the NEB.
With respect to onshore pipelines, the NEB ensures that the design, construction, operation, maintenance, and abandonment of regulated pipelines comply with the NEB Act, the National Energy Board Onshore Pipeline Regulations (OPR), and applicable Canadian Standards Association (CSA) standards. The OPR are the principal safety regulations for onshore pipelines.
Pursuant to sections 6.1 to 6.6 of the OPR, companies regulated by the NEB must implement management systems. A management system sets out the policies and procedures for anticipating, preventing, managing, and mitigating the risks that can affect safety, security, and environmental protection. This requirement is a reflection of the NEB’s expectation that a pipeline company operates in a systematic, comprehensive, and proactive manner in managing risk throughout the lifespan of a pipeline system.
A comprehensive management system must be in place for each of the key program areas in which companies are responsible—safety, pipeline integrity, security, environmental protection, and emergency management. Section 6.5 of the OPR sets out the essential elements that a management system and the key programs must have, including processes to identify hazards, manage risks, train employees, communicate, manage records, monitor and evaluate progress, and continually improve performance.
The Emergency-Management Program
Subsection 32(1) of the OPR requires that a company develop and implement an emergency-management program (EMP) on a facility-by-facility basis and for all aspects of each facility. The NEB prescribes that the following eight elements be included in an EMP.
Hazards assessment. A formal hazard assessment helps a company anticipate the potential emergencies that may arise in its operations, and serves as the basis for other constituent elements of an EMP, including the applicable emergency procedures, liaison, and continuing-education programs. A hazard assessment is also useful for delineating the emergency-planning zone (EPZ), which identifies the areas of concern in the event of an emergency.
A formal hazard assessment should include but is not limited to
- a determination of what could go wrong (including worst possible emergencies), the corresponding implications, and the likelihood and location of occurrence;
- consideration of the dangers arising from natural perils and human activity;
- an assessment of the consequences of a multi-hazard emergency; and
- measures to reduce or eliminate identified hazards.
Emergency-procedures manual. Pursuant to subsection 32(1.1) of the OPR, a company is required to create and maintain an up-to-date emergency-procedures manual setting out the procedure to be followed during an emergency. The emergency-procedures manual and any updates to the manual must be submitted to the NEB.
The NEB prescribes a list of topics that should be covered in the emergency-procedures manual, including but not limited to
- a breakdown of different levels of emergencies;
- a description of the initial actions to be taken when an incident is reported;
- an incident-management system;
- roles and responsibilities of company personnel and outside agencies involved in an emergency response;
- a list of individuals in the EPZ; and
- areas requiring special protection.
Liaison program with agencies involved in emergencies. Section 33 of the OPR provides that a company is required to establish and maintain liaison with agencies, including first responders, that may be involved in an emergency-response situation. These parties should also be consulted when developing and updating the emergency-procedures manual. The EPZ aids in identifying the parties a liaison should be established with.
Communication with persons involved in emergency response. Under section 34 of the OPR, a company must take all reasonable steps to inform all parties that may be involved with emergency-response activity of the practices and procedures to be followed in an emergency situation. These practices and procedures must be consistent with the emergency-procedures manual.
Continuing education for emergency response. Section 35 of the OPR requires that a company develop a continuing-education program for all first responders and the public residing adjacent to the pipeline. As a precautionary measure, however, continuing education should be provided to all parties in the EPZ. Providing continuing education ensures that that these parties remain informed about the products being transported through the pipeline, the location of the pipeline, and the safety procedures to follow during emergencies.
Emergency-response education must be provided to company personnel who are directly involved in the operation of the pipeline as well. Specifically, subsection 46(2)(d) states that an employee must receive training on the emergency procedures contained in the emergency-procedures manual and on how to operate all emergency equipment he or she could reasonably be expected to use.
Emergency-response exercises. Simulated emergency exercises are necessary to ensure that an EMP remains effective and adequate. The NEB advises that the exercises be varied to confirm that all aspects of potential emergencies are tested. In addition, companies should simulate a wide range of potential geographic and weather conditions. At least one simulated exercise should be held annually and a full-scale exercise involving the participation of all agencies identified in a company’s liaison program should be held at least once every three years.
Incident-and-response evaluation. CSA Z662, which is incorporated by reference into the OPR, contains two emergency measures that must be included in an EMP. First, clause 10.5.2.1 of CSA Z662 requires that operating companies have emergency procedures in place for the safe control or shutdown of the pipeline system in the event of an emergency. Second, clause 10.5.2.4 states that operating companies must have verifiable capability to respond to an emergency in accordance with their emergency procedures and response plans and must demonstrate and document the effectiveness of such procedures.
Emergency-response equipment. If emergency equipment is necessary and is available through mutual aid partners, spill cooperatives, or government agencies, formal agreements should be in place for a company to have access to the equipment. A list of equipment required and available for an emergency response, storage locations, and information on how to access such equipment should be included in the emergency-response manual.
Conditions for the Project Concerning Emergency Management
Pursuant to the NEB’s regulatory framework related to emergency management, there are 14 conditions for the project concerning emergency management. The breakdown of the conditions is as follows: four conditions during the pre-construction phase; eight conditions during the construction and pre-operation phase; and two conditions following the commencement of operations.
Pre-construction. During the pre-construction phase of the project, conditions 117, 118, and 119 require Northern Gateway to file with the NEB, at least 30 days before commencing construction, a plan for creating the project’s oil-spill-response plans. Topics that the plan must cover include the steps that will be taken to complete the oil-spill-response plans, approximate timing for completion, interested parties that will be consulted, and a description of all federal and provincial regulations that must be complied with.
Northern Gateway is also required, pursuant to condition 85, to file with the NEB an emergency-response plan for construction that addresses emergency-medical-evacuation capability, fire response, hazardous-chemical response, and fuel-spill response and security.
Construction and pre-operation. Moving into the construction and pre-operation phase, condition 168 states that at least three years prior to starting operations, Northern Gateway has to file with the NEB a plan for consulting with interested parties on emergency preparedness and response for the pipeline and Kitimat Terminal. The plan must include a preliminary list of regulatory authorities, communities, and aboriginal groups to be consulted and a preliminary list of consultation locations and timing. As required by section 33 of the OPR, Northern Gateway must establish and maintain liaison with the agencies that may be involved in an emergency response.
Pursuant to section 32(1) of the OPR, Northern Gateway must file with the NEB an emergency preparedness and response plan for the pipeline (conditions 174 and 175) and the Kitimat Terminal (condition 176) at least one year before commencing operations. With regard to the former, the plan for the pipeline must include, among other things, an oil-spill-response plan and detailed response planning for each 10-kilometer-long segment of the pipeline route.
As for the emergency preparedness and response plan for the Kitimat Terminal, it must include an oil-spill-response plan, a list of high-consequence areas, a list of potentially affected parties, nearest available equipment caches, and response time for equipment and personnel to the water and high-consequence areas.
Further informing the emergency preparedness and response planning for the project is the requirement, pursuant to condition 169, for Northern Gateway to develop a research program on the behavior and cleanup of heavy oils spilled in freshwater and marine environments. Given that the recovery of heavy oil is a major challenge, such research is necessary to improve response capabilities in the event of a spill. For the duration of the research project, condition 170 states that Northern Gateway must file with the NEB a progress report each year.
Another important element of emergency preparedness, as prescribed by the NEB, is the execution of emergency exercises. Accordingly, condition 171 provides that Northern Gateway must complete full-scale exercises to test six hydrocarbon-spill scenarios under different seasonal conditions.
In addition to these emergency exercises, condition 172 requires Northern Gateway to file with the NEB an emergency preparedness and response exercise and training program at least 18 months prior to commencing operations. The purpose of this program is to ensure the continual improvement of emergency-response competencies by company personnel at all levels to prepare for, respond to, and mitigate the potential effects of any type of emergency. This condition is consistent with subsection 46(2)(d) of the OPR and clause 10.5.2.4 of CSA Z662.
Post-commencing operations. After operations have commenced, condition 192 requires Northern Gateway to continue to perform the emergency exercises described in the emergency preparedness and response exercise and training program. The objective of carrying out these exercises is to test emergency-response procedures, company-personnel training, response equipment, safety procedures, and the effectiveness of a company’s liaison and continuing-education programs.
Lastly, with respect to the research program on the behavior and cleanup of heavy oils (condition 169), condition 193 provides that a report on the results of the research must be filed with the NEB within six months after the research is completed.
Conclusion—Relevance to the American Oil and Gas Industry
While pipelines are the safest and most efficient means of transporting oil and gas, pipeline leaks and spills are nonetheless a real concern. Consequently, emergency-management systems are integral to anticipating, preparing for, and minimizing the consequences of such incidents.
The legal requirements related to pipeline emergency management in Canada are relevant to the American oil and gas industry, particularly in regard to cross-border pipelines between Canada and the United States. The Keystone XL pipeline is a prime example of a cross-border pipeline. Such pipelines are subject to federal pipeline regulations in both jurisdictions.
Given that cross-border pipelines operate as a single, interconnected system, the implementation of effective pipeline infrastructure ensures the safe operation of the pipeline in both nations. With respect to emergency management, ensuring that the Canadian portion of the pipeline is compliant with the NEB requirements may help to prevent or minimize the consequences of a pipeline failure that occurs along a portion of the pipeline in the United States. The Enbridge Line 6B spill in Michigan is a case in point. While the pipeline rupture and corresponding spill occurred in Michigan, the consequences could have been mitigated by the control-room personnel located in Edmonton, Alberta. However, due to inadequate training, the rupture remained undetected for 17 hours by the control-room personnel.
In light of the 6B Pipeline spill, emergency response is a major area of concern for the Keystone Pipeline. Nonetheless, the NEB requirements concerning emergency management are extensive; thus, ensuring that the Canadian portion of the Keystone Pipeline complies with these requirements inspires confidence that the consequences of a pipeline failure occurring further along the pipeline route in the United States can be effectively responded to and mitigated by company personnel located in Canada. Ultimately, minimizing the consequences of pipeline spills that occur along cross-border pipelines requires effective emergency management in Canada and the United States.
Keywords: energy litigation, pipelines, Northern Gateway, emergency management
Allison Wong is an associate with McMillan LLP in Calgary, Alberta, Canada.