Pipeline Safety Regulation in

Canada

November 20, 2009

Ken Paulson, P. Eng.Chief Engineer and Deputy Commissioner

British Columbia Oil and Gas Commission

Purpose

This presentation will:

• Identify differences in Canadian regulation

and standards as they apply to pipelines;

• Provide an update on damage prevention

regulation in Canada; and

• Review a pipeline failure from the city of

Burnaby, British Columbia in 2007.

Pipelines in Canada

Pipelines in Canada

British Columbia Quick Facts

• 3.9 million residents

• Larger than any US State

(except Alaska);

• Borders on Washington

State, Province of Alberta,

Yukon Territory and Alaska

State;

• Second only to Alberta in

hydrocarbon production;

• Primary source of new gas

has shifted to

unconventional production

from tight shale's;

Pipelines in British Columbia

Within British Columbia there are more than 21,000 wells feeding a network of gathering and transmission pipelines that is approximately 50,000 km in length (and activity is increasing).

• Each province has their own regulations for pipelines and facilities;

• Federal regulations apply only to pipelines that cross provincial or national boundaries;

• There are at least 7 different pipeline regulations in Canada (NEB, BC, Alberta, Saskatchewan, Ontario, New Brunswick and Nova Scotia); and

• All of the Standards adopt CSA Z662 by reference.

Canadian Regulations

• A consensus standard under the Canadian Standards Association;

• Originally based on ASME B31.4, ASME B31.8 and API 1104;

• Covers full pipeline lifecycle (Design through Abandonment);

• Incorporates managements system principles; and

• First pipeline standard to mandate integrity management programs and to allow the use of reliability based design methods.

CSA Z662

Regulations versus Standards

Acts

Regulations

Standards, Recommended Practices

Consider Right of Way Patrol requirements for gas pipelines:

All gas pipelines in Canada are required to comply with CSA Z662 which requires that:

Operating companies shall periodically patrol their pipelines in order to observe conditions and activities on and

adjacent to their rights-of-way that can affect the safety and operation of the pipelines. Particular attention shall be

given to the following:

(a) construction activity;

(b) dredging operations;

(c) erosion;

(d) ice effects;

(e) scour;

(f) seismic activity;

(g) soil slides;

(h) subsidence;

(i) loss of cover; and

( j) evidence of leaks.

Regulatory Diversity

Within Alberta, there are additional requirements for pipeline patrol:

43(1) The licensee of a pipeline that crosses water or unstable ground shall at least once annually inspect the pipeline

right of way to assess

(a) the surface conditions on and adjacent to the right of way,

(b) indications of any leak in the pipeline,

(c) any construction activity performed by others,

(d) any encroachment or development near the pipeline right of way, or

(e) any other condition affecting the operation of the pipeline.

43(2) The licensee of a pipeline other than one referred to in subsection (1) shall inspect the pipeline right of way in

accordance with that subsection at least once annually or in accordance with the inspection intervals determined in the

integrity management component of the licensee’s manual or manuals referred to in section 7.

(3) The licensee shall conduct the inspections required under subsections (1) and (2)

(a) at times of the year judged by the licensee to be the most appropriate to achieve a satisfactory inspection, and

(b) so as to reasonably minimize disturbance or damage to affected surface property.

Regulatory Diversity

In addition, in Alberta:

44(1) Notwithstanding the frequency of inspections required by section 43, a licensee shall carry out additional

inspections in accordance with section 43(1)(a) to (e) as follows:

(a) monthly for any CSA Z662 Class 1 LVP product gathering segments;

(b) once every 2 weeks for any Class 1 LVP product transmission segments, Class 1 HVP product segments or Class 2

segments conveying gas containing more than 10 moles of hydrogen sulphide gas per kilomole of natural gas;

(c) once every week for any Class 2, 3 or 4 LVP product gathering or transmission segments, Class 2, 3 or 4 HVP

product segments, or Class 3 or 4 segments conveying gas containing more than 10 moles of hydrogen sulphide gas

per kilomole of natural gas.

(2) For the purposes of this section and section 45, “LVP product” does not include multiphase fluids or oilfield water.

Regulatory Diversity

Now consider federally regulated pipelines in Canada:

39. A company shall develop a surveillance and monitoring program for the protection of the pipeline, the public

and the environment.

Regulatory Diversity

And in the US…..:

§ 192.705 Transmission lines: Patrolling.

(a) Each operator shall have a patrol program to observe surface conditions on and adjacent to the transmission line

right-of-way for indications of leaks, construction activity, and other factors affecting safety and operation.

(b) The frequency of patrols is determined by the size of the line, the operating pressures, the class location, terrain,

weather, and other relevant factors, but intervals between patrols may not be longer than prescribed in the following

table:

( c) Methods of patrolling include walking, driving, flying or other appropriate means of traversing the right-of-way.

Regulatory Diversity

Why the differences?

In 2008, a report entitled a Comparison of US and CanadianTransmission Pipeline Consensus Standards was completed and published. The executive summary of that report concludes that:

A coordinated effort between the pipeline regulatory entities

in the United States and Canada is paramount for reducing

energy congestion across the border.

The interconnected nature of the pipeline infrastructure in

North America and the growing demand for energy in the

US are clear drivers for cross border coordination and collaboration.

Regulatory Diversity

CSA Z662 utilizes class location assessment areas for all pipelines (gas and oil).

Class Locations

Class location dictates allowable operating pressure and stress:

Class Locations

Class Locations

When development occurs that changes the class location of an area, the pipeline must be upgraded to meet the design requirements of the new class location:

What About Changes?

In Canada, there is a non-consensus standard entitled Plus 663 - Land Use Planning for Pipelines: A Guideline for Local Authorities, Developers, and Pipeline Operators

The purpose of this Guideline is to increase awareness and encourage communication among key stakeholders when considering changes to existing land use or new land use developments near to or surrounding existing pipelines.

Land Use Near Pipelines

The pipeline company is responsible for obtaining and maintaining their rights of way.

Managing the Right of Way

The pipeline company is responsible for obtaining and maintaining their rights of way.

Managing the Right of Way

The pipeline company is responsible for obtaining and maintaining their rights of way.

Managing the Right of Way

Some companies have begun reclaiming their rights of way and have also implemented a “zero tolerance” for encroachments.

Managing the Right of Way

Increasingly, Regulator’s are relying on a systematic approach for right of way management and damage prevention. The NEB’s draft Damage Prevention Regulations set out the basic content requirements for these programs:

Damage prevention programs are intended to reduce the frequency of

preventable damage and should include elements pertaining to:

(a) awareness;

(b) continuing education and liaison;

( c) monitoring and surveillance; and(d) ongoing assessment of land use and ownership.

Managing the Right of Way

Damage prevention programs should:

• Establish the goals, objectives and measurement indicators for damage prevention within companies;

• Set out the responsibilities and competencies for responsible and accountable persons;

• Encompass existing activities such as locates, public awareness and continuing education/liaison programs; and

• Include elements fro self assessment and continual improvement.

Managing the Right of Way

At 12:31 Pacific daylight time on 24 July 2007, a 610-millimetre crude

oil pipeline was struck and punctured by a track-hoe while constructing

a new sewer pipeline in Burnaby, British Columbia.

Case Study on Third Party Damage

Some interesting facts:

• The pipeline had been located at some locations;

• The contractor knew the pipeline was nearby;

• The company was aware the work was underway;

• The consultant did not communicate the requirements from the

crossing and proximity agreements;

• The pipeline did not have leak detection in place;

• The area is a densely populated urban environment;

Case Study on Third Party Damage

Some interesting observations:

• The existing regulations should have prevented this occurrence;

• Blame was immediately placed on the pipeline company; and

• Emergency response was initially undertaken by separate entities

(the City and the Company);

Case Study on Third Party Damage

• The goals of regulators are consistent – the assurance that

pipelines operate safely and in a manner that protects people and

the environment;

• North American pipeline regulation would benefit from increased

cooperation, collaborative regulatory development and

standardization;

• Damage prevention programs provide a consistent and auditable

framework to ensure that all reasonable steps to prevent damage to

pipelines;

• Regulation by itself is not the answer – the protection of Pipelines is

everyone’s responsibility.

Conclusions

Questions?