Canada energy regulator is monitoring pipelines poorly: watchdog

By David Ljunggren
OTTAWA, Jan 26 (Reuters) - Canada's energy regulator is
doing a poor job of monitoring pipeline firms, an official
watchdog said on Tuesday in a report that could bolster support
for government plans to reform how major oil and gas projects
are approved.
Environment Commissioner Julie Gelfand said the National
Energy Board (NEB) did not properly check whether companies were
sticking to the approval conditions for projects and did not
consistently check that problems had been cleared up.
The new Liberal government plans to revamp the NEB, which is
responsible for approving federally regulated projects and then
monitoring them. Critics complain the body is too focused on the
needs of the energy industry and does not pay enough attention
to environmental concerns.
The NEB oversees 45,300 miles (73,000 km) of oil and gas
pipelines and around 100 companies.
"Our audit concluded that the Board did not adequately track
companies' implementation of pipeline approval conditions, and
that it was not consistently following up on company
deficiencies," Gelfand said.
An increasingly heated public debate over pipeline safety,
the environment and the role of the NEB is threatening to derail
major Canadian projects proposed by TransCanada Corp TRP.TO ,
Kinder Morgan Inc (N:KMI) KMN.I and Enbridge Inc ENB.TO .
The energy industry says new pipelines are needed to ship
crude to the seacoast, where it can attract higher prices.
In a bid to alleviate safety and environmental concerns, the
NEB sometimes attaches specific conditions to projects. Gelfand
said the board did not do a thorough enough job of checking
whether these conditions had been met, in part because it had an
outdated information tracking system.
In a written response, the NEB said it would overhaul its
systems by December 2016 to improve compliance monitoring.
Gelfand also said the board was having trouble recruiting
and retaining specialists in pipeline integrity. Around 25
percent of all safety and engineering staff are eligible to
retire over the next five years.
Given increasing public interest in pipelines and climate
change, as well as projected doubling of pipeline capacity by
2020, "it is clear the Board needs to do more to keep pace with
the rapidly changing context in which it operates", she
concluded.
The Liberal government says it will reform the NEB to put
more stress on environmental concerns. It also plans to
strengthen the environmental assessment process, which was
diluted by the previous Conservative government.