ARCHIVED – Results of consultation on the revisions to the NEB Event Reporting Guidelines

1

Alliance Pipelines Inc.

Fugitive Emissions

July 2017

As framed, section 4.1.3 of the proposed updated guidelines would require regulated companies to report any “fugitive emissions” encountered during the regular ongoing operation of pipeline systems. As examples, the Board points to releases through faulty seals, packing, gaskets, and O-rings. Alliance notes that the reporting of such events would significantly increase the reporting obligations relative to current state, with no tangible benefit to public safety. Furthermore, such requirements would likely result in difficulty differentiating between incidents that have attendant safety concerns and those which do not.

For the reasons expressed in greater detail below, Alliance would urge the Board to remove fugitive emissions from the proposed updated guidelines:

Absence of Safety Risk – As acknowledged by the NEB, a fugitive emission release “poses no risk to the safety of the public, company employees or to the immediate environment”. As such, a fugitive emission does not have the character of a hazardous incident.

Regulatory Reporting Requirement Unchanged – The sustaining criterion in the NEB Onshore Pipeline Regulations is “an unintended or uncontrolled release of gas or HVP hydrocarbons”. This same basic criterion has been in place for decades, and has never been interpreted or enforced to include fugitive emissions. Alliance submits that no compelling reason has been shown to require an amendment to this past convention.

Nature and Origin of Fugitive Emissions – Pipeline companies strive to minimize fugitive emissions; however, very small-scale release resulting from the regular wear and tear and sometimes imperfect functioning of seals, packing, gaskets, O-rings, and the like are an operational reality. Fugitive emissions are therefore not extraordinary events, but rather an aspect that companies have to appropriately manage on an ongoing basis.

Prevailing NEB Requirements – Further to the preceding bullet, fugitive emissions are managed by companies within the context of the operations and maintenance, integrity management, and environmental management programs that are already mandated by the NEB Onshore Pipeline Regulations (at sections 27, 40, and 48).

Existing Government Reporting Framework – Fugitive Emissions are already subject to an extensive reporting framework in Canada. Federally-regulated pipelines have, among others, obligations to report fugitive emissions under the following regulatory regimes: (i) Environment and Climate Change Canada in respect of greenhouse gas (GHG) emissions through the Federal Greenhouse Gas Reporting Program; (ii) the Ontario Ministry of Environment, and Climate Change; (iii) the Quebec Ministry of Sustainable Development, Environment, and the Fight against Climate Change; (iv) Alberta Environment and Parks; and (v) the British Columbia Climate Action Secretariat.

Proposed New Federal Regulations – Additionally, Environment and Climate Change Canada and the Department of Health issued draft regulations on May 27, 2017 for the reduction of releases of methane and certain volatile organic compounds from upstream oil and gas facilities and transmission pipeline systems.4 The draft regulations, which would apply to all federally regulated pipelines, pose specific requirements for fugitive emissions within the context of “Leak Detection and Repair”. More particularly, the proposed regulations would require the periodic conduct of leak detection surveys using optical gas imaging, with provision that any leaks ≥ 500 ppm be repaired within certain defined time frames.

In light of the foregoing, Alliance would urge the Board to not classify fugitive emissions as reportable incidents or events. Rather, the Board should continue to allow pipeline companies to manage the fugitive emission aspect within the context of existing and emerging regulatory requirements.

In the longer term, Alliance would recommend that the Board work towards developing a volumetric incident reporting threshold for unintended natural gas releases. In this connection, CEPA notes that the Pipeline and Hazardous Materials Safety Administration within the United States Department of Transportation employs a volumetric reporting threshold of three million standard cubic feet or more for unintended natural gas releases.

See row 3.

2

Alliance Pipelines Inc.

Pipeline Damage

July 2017

In Alliance’s respectful submission, the Board would be unnecessarily over-extending the reporting requirement in going from third-party strikes to all forms of pipeline damage no matter the severity and no matter how caused.

The circumstances described in  11(1)(b) of the captioned regulations are drawn directly from section 112 of the National Energy Board Act, and clearly and exclusively contemplate third-party activity in the vicinity of the pipeline. In order to enforce the wider reporting of pipeline damage as contemplated here, the Board could either amend the “incident” definition in the NEB Onshore Pipeline Regulations or issue a corresponding order using its powers under the National Energy Board Act.

Alliance would, however, urge the Board to refrain from taking such action in light of the following:

Integrity Management – Alliance notes that the broader pipeline damage aspect is already addressed within the context of a pipeline company’s integrity management program, as established under section 40 of the NEB Onshore Pipeline Regulations.

Pipeline Performance Measures – Integrity metrics are already incorporated in the pipeline performance measures that pipeline companies have to submit to the Board each spring for the prior calendar year. If the Board is interested in collecting even further information in the area of pipeline damage, those metrics could be expanded.

Annual Integrity Information Exchange Sessions – For many years, Board staff have had annual pipeline integrity information exchange sessions with individual Group 1 pipeline companies. Going forward, these sessions will continue to be an appropriate forum for providing the Board with information on the ongoing integrity of pipeline systems, including with respect to the identification and remediation of any pipeline defects or damage.

Interrelation with Other Incident Reporting Criteria – If an occurrence of pipeline damage results in a loss of containment or other significant consequence, it will still be captured as a reportable event under the various “incident” reporting criteria set out under section 1 of the NEB Onshore Pipeline Regulations.

The NEB has considered the comments and disagrees. There is no such clear or exclsuive contemplation in the NEB Act. The prohibition of activities summarized in section 112 of the NEB Act apply to "any person". There is no further definition provided and therefore the "any person" should be read in its grammatical sense. In addition, section 11(1)(b) refers to "all damage". As such the NEB expects damage from any source to be reported.

The Pipeline Performance Measures are collected annually. The NEB does not believe that this timescale is appropriate for a regulatory requirement that is to be reported "immediately" (section 11(1) of the Damage Prevention Regulaitons – Obligations of Pipeline Companies.)

NEB staff will use the data generated from these notifications to further inform their compliance activities including the Annual Integrity Information Exchange Meetings. The notification is currently envisioned as a one-step process and does not preclude the discussions that occur at these meetings.

Note that Damage to Pipeline and Incidents are separate reporting requirements and therefore two separate reports would be required in these instances. A company can submit multiple reports via OERS.

The NEB will retain Alliance's feedback regarding modification of the definition of incident under the Onshore Pipelines Regulations and will consider it in the event the regulations are changed. The NEB has provided additional clarification on what it means by "damage". See row 4 for more details.

3

Canadian Energy Pipeline Association

Fugitive Emissions

July 2017

As framed, Section 4.1.3 in the proposed updated guidelines would require regulated companies to report any “fugitive emissions” encountered during the regular ongoing operation of pipeline systems. For example, the NEB points to releases through faulty seals, packing, gaskets, and O-rings. This approach to reporting fugitive emissions assumes that fugitive emissions are incidents that are detectable in real time (within 24 hours). In reality most fugitive emissions are very small and are only detectable when specific testing is conducted. Furthermore, failing to make a distinction between normal operations and safety events is an impediment to measuring and reporting pipeline safety performance, and will likely be confusing and potentially misleading to the Canadian public.

For the reasons expressed in greater detail below, CEPA urges the NEB to remove fugitive emissions from the proposed updated guidelines. (NOTE: For details on reasons referenced above see page 2 of the CEPA response letter dated July 28, 2017).

The NEB considered these comments globally and is responding in that manner. The NEB expects companies to minimize their operational emissions in general and has found that there has been inconsistent reporting between regulated companies when it comes to natural gas or HVP releases.

To support the end goal of being notified of emissions that the NEB considers to be an incident, NEB staff have added the following with respect to an "unintended or uncontrolled" release of natural gas or HVP hydrocarbons:

An event that is not part of planned pipeline maintenance or operation and occurs during the construction, operation or abandonment of a pipeline and results in:

1. A release of gas or HVP hydrocarbons occurring at a rate greater than 0.1 kg/second from any malfunctioning or faulty part of a pipeline, facility or appurtenance including but not limited to seals, packing, gaskets, o-rings, plugs, valves; or

2. A release of any size that occurs through the body of the pipeline or a welded connection.

Events that do not fall under this definition include but are not limited to:

• Intended and controlled flaring or venting of natural gas or hydrocarbons including venting through properly functioning pressure relief valves or pressure safety valves.

Note that companies will be required to supply an estimation of rate of release and total volume released when they report incidents to OERS.

For the purposes of estimating release rate companies should use the following formula :

Rate (kg/sec⁡ ) = 132.52 x (h/1000)^2 x square root of(DxP)
* Formula derived from the Internation Regulators Forum

Where:
h = Equivalent hole diameter (mm)
D = density of gas (kg/m³)
P = Pressure of gas (bar(a), absolute pressure)

For the purposes of calculating a total mass released for use in estimating volume companies should use:

Total Mass (kg) = Rate (kg/sec) x duration of release (sec)

When calculating the duration of release, companies should follow these guidelines in order:

• If the start and end times of the release are known: The actual duration of the release.
• If the start of the release is not known: the time of the last inspection/surveillance/site-visit of that part of the facility/pipeline to the time the release was discovered.
• If the last inspection/surveillance/site-visit date is not known: Assume the leak was present for a minimum 30 days or the date the facility/pipeline was commissioned whichever is less.

For the purposes of estimating volume companies should use the following formula:

Volume (standard m3)= (n*R*288)/1000
*Ideal Gas Law

Where:
n = the number of moles of product
R = 0.08205 L atm/mol K

NOTE: Pressure is standard at 1 atm and temperature is standard at 288 K. Therefore these parameters are not shown.

4

Canadian Energy Pipeline Association

Damage to a Pipeline

July 2017

With reference to Sections 6.2 and 11.7 of the proposed updated guidelines, it is CEPA’s understanding that the NEB is looking to take the “pipeline damage” reporting feature from the Pipeline Damage Prevention Regulations and expand that reporting requirement to all forms of damage, no matter what the cause or severity (e.g. “coating scratch”). CEPA is of the view that not all damage is necessarily an “incident” and that further criteria and guidance are required. For example, a “coating scratch” could be revised to read “coating damage that is indicative of line contact with potential to impact the integrity of the pipeline”.

CEPA also notes integrity metrics are incorporated in the pipeline performance measures that pipeline companies are required to submit to the NEB each spring. If an occurrence of pipeline damage results in a loss of containment or other significant consequence, it is captured as a reportable event under the various incident reporting criteria set out in section 1 of the OPR. Additionally, for many years, the NEB has conducted annual pipeline integrity information exchange sessions with individual Group 1 pipeline companies. Going forward, these will continue to be the appropriate forums for providing the NEB with information on the ongoing integrity of pipeline systems (including the identification and remediation of any pipeline defects or damage).

CEPA is of the view that not all damage is necessarily an “incident” and that further criteria and guidance are required. For example, a “coating scratch” could be revised to read “coating damage that is indicative of line contact with potential to impact the integrity of the pipeline”.

It should be noted that the wording provided was in the context of the Damage Prevention Regulations (DPR) which require companies to notify the NEB should damage to their pipeline occur/ be discovered. This guidance was not in the context of a reportable incident as per the Onshore Pipelines Regulations and should not be referred to as an "incident".

The NEB agrees that not all forms of damage would be reportable under this notification. The NEB has therefore provided the following addition to the draft Guidance:

Paragraph 11(1)(b) of the DPR-O requires companies to report

“all damage to its pipe caused or identified during the construction of a facility across, on, along or under a pipeline, the operation, maintenance or removal of a facility, an activity that caused a ground disturbance within the prescribed area or the operation of vehicles or mobile equipment across the pipeline”.

The NEB defines “damage” as impacts caused by any person to an operational (including deactivated) pipeline where those impacts were:

• discovered during the course of operations or maintenance activities and are indicative of contact with the regulated pipeline; or
• outside the scope of a planned activity and there were no specific procedures in place to mitigate the damage.

Events that do not fall under this definition include:

• Damage to the pipeline during an integrity dig where the scope of the integrity dig was to replace/repair that portion of the pipeline.
• Damage to the pipeline during slope stability work where potential contact with the pipeline was anticipated and specifically mitigated against.
• Damage to pipelines where NEB approval has been acquired to decommission or abandon the pipeline.

5

Canadian Energy Pipeline Association

Incident Costs

July 2017

CEPA would like to better understand the value and objective of collecting incident cost information. In addition, further information on the types of costs (initial response or ongoing remediation) and timeframe for reporting is required.

Based on the initial review of the proposed changes, CEPA’s view is that reporting incident costs does not add value to the effectiveness of incident reporting. Reporting costs associated with an incident will vary widely due to individual company processes and procedures. For example, companies may have different methods for tracking costs; one company may hire a contractor to respond – an Oil Spill Removal Organization like relationship – that will be costly, while other companies have an internal capability that would be less costly.

We recommend the Event Reporting Guidelines not include incident cost requirements and the use of this data and its interpretation be a discussion point for a future workshop/meeting.

See row 41

6

Canadian Energy Pipeline Association

Operation Beyond Design Limits – Introduction

July 2017

The definition of “incident” in the OPR clearly sets out what is reportable to the Board; occurrences that result in operation of the pipeline beyond its design limits as determined under CSA Z662 or any operating limits imposed by the Board. The precise criterion appearing in the “incident” definition in Section 1 of the Regulations is as follows: “the operation of a pipeline beyond its design limits as determined under CSA Z662 or CSA Z276 or any operating limits imposed by the Board”. The draft revised Guidelines provide examples of reportable incidents that fall into the category of “operations beyond design limits” that are inaccurate or do not have a design limit within CSA Z662 or CSA Z276. Specific examples that require further clarification/amendments are:

Specific responses in rows 5 to 8 below.

7

Canadian Energy Pipeline Association

Operation Beyond Design Limits – Slope Movement

July 2017

Slope movement – When designing a pipeline, many companies will account for slope movements and ensure such movements are within the limits of that design. In other words, a slope movement does not necessarily mean that there is an “operating beyond design limits” incident. Furthermore, a pipeline company will often monitor select slopes on a long-term basis in conjunction with their integrity management programs. In such cases, there would be very slow ground movement (< 1 mm/day with somewhat higher rates encountered during heavy rains).

In this context, CEPA recommends that only earth movement on a slope that produces sufficient strain to exceed the design limits of the pipeline as determined under CSA Z662 or CSA Z276 be reportable.

The NEB has considered CEPA's feedback and agrees that slope movement in general does not necesarily represent an exceedance of design limits. The NEB therefore proposes to amend the draft guideline to address this matter:

For the bullet under "Events that fall under this definition include, but are not limited to" that currently reads "slope movements" change to "slope movements that exceed what was predicted at the design stage or were not predicted in the design stage."

8

Canadian Energy Pipeline Association

Operation Beyond Design Limits – Pipe Exposure

July 2017

Pipe exposure – On its own, pipe exposure does not necessarily equate to exceeding design limits.

CEPA recommends that only exposure of pipelines that has resulted in integrity concerns that require mitigation or that poses a threat to public safety be reportable.

The NEB has considered CEPA's feedback and does not agree with CEPA's interpretation. If a pipeline is designed to be underground, then exposure is outside of design limits.

9

Canadian Energy Pipeline Association

Operation Beyond Design Limits – Product Composition

July 2017

Product composition – The draft revised guidelines imply all chemical properties as defined in the tariff limits are material to the “design limits”. Tariff limits are different among operators and therefore drive different standards / requirements. Some tariff limits are driven by commercial negotiations and therefore not design limits and should therefore be excluded from reporting. Furthermore, some qualities in tariff specifications have no impact on the ability to maintain safe and reliable pipeline operations. For example, certain properties are monitored as a courtesy to end-use customers. Exceeding a tariff limit would not necessarily be an example of operating beyond design limits...

CEPA recommends that this example be removed. CEPA supports the additional clarity provided by the proposed addition of a “sour product in a line or facility designed for sweet product” as an example of introduction of an inappropriate product.

The NEB acknowledges that a company might be able to demonstrate that operating beyond design limits in a particular case is safe (i.e. that the pipeline is still fit for service), but that does not preclude the fact that an operation beyond design limits occurred. The NEB still has to be informed of the event and given relevant justifications.

10

Canadian Energy Pipeline Association

Operation Beyond Design Limits – Self Imposed Pressure Restriction

July 2017

Self-imposed pressure restrictions – Requiring companies to report excursions of self-imposed pressure restrictions would have a dampening effect on imposing those pressure restrictions in the first place. Companies often self-impose pressure restrictions for precautionary reasons on a temporary basis pending in-line inspections or other verification activities. The Board has the power to test the adequacy and effectiveness of a company’s controls through inspections, audits or other available compliance assurance mechanisms.

Remove requirement (inferred).

The NEB has considered CEPA's feedback and does not agree with the arguments made. If a pipeline is under a self-imposed pressure restriction on a precautionary basis pending verification activities for safety reasons, any exceedance of this pressure may lead to an integrity or safety risk and the Board needs to be made aware of this. In addition, NEB staff find it difficult to believe that a company would ignore potential safety concerns by changing their approach to applying pressure restrictions from a precautionary standpoint due to a reporting requirement.

11

Canadian Energy Pipeline Association

Reporting Timelines

July 2017

Initial Reporting timeline – Clarification is required as unauthorized activity is not considered in the definition of an “incident” and therefore would not be subject to meet the “immediate” reporting requirement. Sufficient reporting time is required to communicate a potential unauthorized activity and conduct a preliminary investigation on location.

CEPA submits that the initial reporting timeline for unauthorized activities be as follows:

Report initial unauthorized activity within 24 hours as per Section 3.0

Complete unauthorized activity investigation within 30 days as per Section 6.4

The Revised Guidelines as written reflect CEPA's recommendation.

Section 3 of the Revised Guidelines state "Where regulations require an event to be reported immediately…" and section 11(1) of the Damage Prevention Regulations – Obligations of Pipeline Companies (DPR-O) indicates that unauthorized activities are to be reported immediately. Unauthorized Activities do not meet any of the specified definitions in section 3 that would require them to be reported within 3 hours, therefore the Revised Guidelines state that companies "...must report the event as soon as possible and no later than twenty-four hours after the event was discovered."

Further, section 7.4 of the Revised Guidelines states that specifically in the case of events under the DPR, the remainder of the information is to be provided within 30 days.

12

Canadian Energy Pipeline Association

Reporting Timelines

July 2017

Submission of a PIR and a DIR – The time frame of 12 weeks to complete a root cause analysis along with corrective actions to prevent reoccurrence of an incident at a local level and preventative actions to prevent the similar incidents across its systems (if applicable) is often inadequate. An initial investigation can be completed within a short time frame depending on the severity; however, corrective and preventative actions can take over 12 months to complete based on procurement and construction timelines. CEPA recommends the timeframe of completion of incidents for the final submission within the OERS be extended to allow sufficient time to complete these tasks appropriately.

CEPA recommends the timeframe of completion of incidents for the final submission within the OERS be extended to allow sufficient time to complete these tasks appropriately.

The NEB has considered the feedback and believe there is a misunderstanding of the requirements with respect to incident reporting and investigation.The NEB does not require that corrective and preventative actions are implemented prior to close out of an incident only that they are identified. Checking the implementation of corrective and preventative actions falls to the NEB compliance activities such as inspections.

The NEB continues to believe that 12 weeks is sufficient time to complete a root cause investigation and identify corrective and preventative actions for the vast majority of incidents.

13

Canadian Energy Pipeline Association

Precautionary Approach

July 2017

Section 2.2: Precautionary approach – This section has been revised to provide more clarity on reporting events using a precautionary approach. Other sections of the document also speak to applying a precautionary approach, but have not been revised to align with the changes to section 2.2.2.

The NEB has updated the relevant sections.

14

Canadian Energy Pipeline Association

Reporting Timelines

July 2017

Recommendation for Immediately Reportable Events.

Section 3: Immediately Reportable Events – CEPA recommends that releases under the definition of an incident that harms people or the environment are prefaced by “unintended or uncontrolled”. The Transportation Safety Board (TSB) requires immediate notification of a fire or explosion that causes a pipeline or facility to be inoperative. CEPA recommends this be added to section 3 to create a complete list that addresses both TSB and NEB immediate reporting requirements.

The NEB has updated the wording to include "unintended or uncontrolled"

15

Canadian Energy Pipeline Association

Multiple Event Types

July 2017

Recommendation for multiple event types

Section 4: Multiple serious injuries – Multiple incident reports for events that lead to multiple serious injuries should be able to be itemized within a single event report.

The NEB agrees that there should be a separate category for multiple serious injuries. OERS will be revised to reflect this feedback.

16

Canadian Energy Pipeline Association

Fire/Explosion

July 2017

Recommendation for Fire/Explosion reporting

Section 4.1.2: “An unintended fire or explosion” – Low risk occurrences such as small grass, welding, equipment, etc. fires that are extinguished immediately should not be reportable. Fire reporting should only be required when it involves or threatens to ignite a commodity, damages or threatens to damage infrastructure, or when the fire is large, uncontrolled or cannot be extinguished easily.

The NEB has considered CEPA's feedback and disagrees that small grass, welding, equipment etc. fires should not be reported. The NEB considers these "housekeeping" fires in aggregation to be precursors to larger fires or fires that could cause serious injury.

17

Canadian Energy Pipeline Association

Canada Labour Code

July 2017

Section 11: Canada Labour Code – With respect to the addition of section 11, CEPA members would like clarification that although these events will be captured under the “Serious Injury” category in OERS, the reporting timelines are still those required within the Canada Labour Code or its regulations.

The NEB has become aware of actions that Employment and Skills Development Canada (ESDC) may be taking to improve CLC reporting. As such the NEB will not be providing any additional guidance related to CLC incident reporting at this time and will be removing this section from the Draft Revised NEB Event Reporting Guidelines.

18

Canadian Energy Pipeline Association

Canada Labour Code

July 2017

Section 15.5(f) and (g) of the Canada Occupational Health and Safety Regulations also requires reporting of certain types of damage. It is suggested that the Board consider expanding this section to include these reportable incidents that are not injuries.

It is suggested that the Board consider expanding this section to include these reportable incidents that are not injuries.

The NEB has become aware of actions that Employment and Skills Development Canada (ESDC) may be taking to improve CLC reporting. As such the NEB will not be providing any additional guidance related to CLC incident reporting at this time and will be removing this section from the Draft Revised NEB Event Reporting Guidelines.

19

Canadian Energy Pipeline Association

Implementation of Guidelines

July 2017

Feedback on implementation of the Revised Guidelines

Transition period for new requirements – CEPA recommends a six month transition period for implementing new reporting requirements in order to ensure adequate time for regulated companies to educate staff and revise processes.

The NEB agrees that the Revised Guidelines should not come into effect immediately. An All-Company letter is attached to Revised Guidelines indicating when they will come into effect.

20

Canadian Energy Pipeline Association

UA Reporting

July 2017

Foot note, page 5 – Under Section 6.1 it states that companies are expected to apply the precautionary approach and report “all” occurrences that may have resulted in an unauthorized activity (UX). Then it states that “companies will have the opportunity to demonstrate, as part of their reports, (See Section 11) that the occurrence did not result” in a UX. “In these cases the status can be changed from reportable to non reportable”. But then in Section 11.6 Unauthorized Activity Reporting (DPR-O) or all of Section 11 it does not detail how the company has the opportunity to report the contravention did not result in a UX. There is no mechanism defined to do so.

The OERS user guide documents the mechanism that companies can use to request a status change. Similar to incidents and other events, companies can use the "Contact the NEB" link to send a message to the OERS admin team. Note that this functionality is enhanced in the coming updates to OERS such that the message also goes to the assigned investigator.

21

Enbridge Pipelines Inc.

Fire/Explosion

July 2017

Enbridge supports the increased clarity provided by the proposed definition, “Any unintended fire or explosion that is caused by or impacts the construction, operation or abandonment of a pipeline.” In regard to the examples provided of events that fall under this definition, Enbridge is of the view that “housekeeping related fires” do not align with the proposed definition.

Enbridge suggests that this example be removed from the Draft Revised Guidelines.

See row 16.

22

Enbridge Pipelines Inc.

Fire/Explosion

July 2017

Draft wording in this section also includes, “Fire caused by an arc, or a cable fault or a breakdown of any component of the uninterruptible power system (UPS) or the back-up generator”. Additional clarity is requested regarding if the Board considers that the arc itself is a fire or if actual ignition is required in order to be considered a fire.

Enbridge suggests clarity would be improved if the proposed bullet is replaced with the following:

Fire caused by failure of electrical distribution equipment.

Fire caused by an arc flash or arc blast event that compromises electrical enclosure integrity.

The NEB considered Enbridge's feedback and agree that an arc is not in itself considered a fire or an explosion but rather the potential source of fire or explosion. In the event that an arc causes a fire or an explosion, this event becomes reportable. For the bullet under "Events that fall under this definition include, but are not limited to" that currently reads "Fire caused by an arc, or a cable fault or a breakdown of any component of the uninterruptible power system (UPS) or the back-up generator" has been modified to read:

"Fire or explosion caused by an arc, or a cable fault or a breakdown of any component of the uninterruptible power system (UPS) or the back-up generator or any other electrical distribution equipment".

23

Enbridge Pipelines Inc.

Damage to a Pipeline

July 2017

Enbridge would like further clarity from the Board regarding criteria for when pipeline damage is considered material and should be reported as an incident. In regard to coating damage, reporting all “coating scratches” would be problematic. For example, during pipe exposure for integrity digs there could be some scratches caused to the coating that would not be indicative of any pipe damage or previous line contact. The Alberta Pipeline Rules recognizes this in its definition of “contact damage” and subclause 1(1)(e)(iii) includes, “damage to the pipeline’s protective coating that compromises the functionality of the coating, with the exception of minor damages that may occur during final hand excavation and external cleaning”. Enbridge suggests that the example of a “coating scratch” be revised assuggested by CEPA or be aligned with the criteria in the Pipeline Rules.

Enbridge suggests that the example of a “coating scratch” be revised as suggested by CEPA or be aligned with the criteria in the Pipeline Rules.

See row 4.

24

Husky Oil Operations Limited

Sour Gas Releases

July 2017

Husky would like the NEB to supply clarity for required for volumes and concentration of sour gas (H2S) releases.

Husky would ask the NEB to define a time limit for notification. Control of the incident must take priority with follow up to the regulatory once under control.

Will the NEB be responsible for contacting provincial or federal counterparts in these situations?

Husky would recommend a flow chart or diagram to clarify requirements of existing timeframes (3h, 24h and 24h prior press release). NEB should consider reporting requirements based on emergency levels.

It is unclear which regulation Husky is referring to, however the NEB assumes it is the Onshore Pipelines Regulations (OPR). The NEB has defined time limits for notification of incidents and other events under section 3 of the revised NEB Event Reporting Guidelines.

The NEB requires that companies have the resources to satisfy all of their legal requirements including regulatory reporting and incident management even if they occur concurrently.

It remains the responsibility of the company to notify the appropriate agencies as per their legal requirements. The NEB and the TSB have a single-window reporting approach.

Sour gas reporting falls under part e of the OPR "an unintended or uncontrolled release of gas or high-vapour pressure (HVP) hydrocarbons". Refer to row 3 for additional details.

25

Husky Oil Operations Limited

Fire/Explosion

July 2017

The NEB definition needs to explain the expectation of what type of fire and potential impacts of that fire. Although a small fire during welding can occur, if there is no impact to the construction, operation or abandonment of pipeline what is the reason to notify?

In Husky’s view, a fire of sufficient magnitude to be reported would likely result in loss of containment, damage to infrastructure, casualties, impact to environment, etc. In defining reportable fires / explosions the NEB should consider the following:

Does the fire impact on any operations during the lifecycle of the pipeline?

Does the fire impact on materials used in the operations during the lifecycle of the pipeline?

Does the fire impact on environment?

Does the fire impact on public safety?

Has the fire resulted in casualties or need for emergency response?

Answering yes to any of these questions would result in notification.

NEB may wish to consider developing a process flow diagram to explain the work.

See row 16.

26

Husky Oil Operations Limited

Fugitive Emissions

July 2017

There are limited regulations on fugitive emissions programs and until legislation is in place that will drive such a requirement, there is little likelihood that fugitive type emissions will be identified and reported at that level.

Presently Husky uses a “ten (10)minute” release prior to notification.

Husky recommends the NEB reassess the expectations for reporting of any gas leak, including those as a result of fugitive emissions.

Husky would like to suggest that the NEB considers a program flow process / diagram that would aid all involved in determining reporting requirements.

Husky recommends the NEB consider the Alberta Energy Regulator’s (AER) emergency level matrix and apply this to incidents.

See row 3.

27

Husky Oil Operations Limited

UA Reporting

July 2017

Recommedation for UA reporting.

Husky would like to suggest the NEB add additional clarification on vehicle and mobile equipment movement over pipeline systems.

The NEB believes it has provided sufficient clarity regarding these items. Without more specific feedback, the NEB cannot provide a detailed response. If Husky wishes to provide additional feedback they may do so by emailing Regulatory.Framework@cer-rec.gc.ca.

28

Husky Oil Operations Limited

Locations

July 2017

Recommendation on location information

Husky would request of the NEB to identify the system of records for reporting the location of an incident?

• Legal Site Description (LSD)
• Global Position System (GPS)
• North American Datum
• Street Address
• Etc.

The NEB has changed the Revised Guidelines to specify that GPS coordinates in decimal degrees are required.

29

Husky Oil Operations Limited

Misc.

July 2017

In considering this requirement, what is the benefit for industry to be reporting all types of near misses?

Husky requires clarity on severity range for reporting a near misses (critical, serious moderate and minor).

Husky would ask the NEB to reconsider the reporting requirements for near misses. The time and resources required to report minor or moderate near misses would be taxing.

Near misses only apply to Drilling and Production Regulations and are a regulatory requriement. This feedback will be recorded and considered at a later date if regulatory changes to those regulations are proposed.

30

TransCanada Pipelines Limited

Gas/HVP Reporting – Fugitive Emissions

July 2017

TransCanada supports the reporting of fugitive emissions to Environment and Climate Change Canada (ECCC) and to other provincial regulators under existing legislative requirements. The fugitive emissions identified in Section 4.1.3 of the proposed Revised Guidelines are routinely screened for and reported on an aggregate basis under these existing requirements. Fugitive emissions do not pose an integrity risk to Pipelines but they are relevant in aggregate to environmental reporting.

The NEB could accomplish environmental goals related to fugitive emissions by liaising With ECCC to access the required information. This approach achieves the environmental reporting goal while avoiding duplication.

See row 3.

31

TransCanada Pipelines Limited

Damage to a Pipeline

July 2017

Expanding the reporting requirements of the Pipeline Damage Prevention Regulations to include all forms of damage will significantly increase the administrative cost of reporting without a corresponding improvement in safety. Imposing a reporting requirement regardless of cause, degree, type, corrective actions applied, or the stage in the life-cycle of the pipeline would result in a high volume of reports without positive practical effect. Many of the reports would be driven by events such as minor scratches or dents during construction that are either mitigated or accepted accordingto code before a project is placed in operation and would likely never be the source of any threat to public or environmental safety.

TransCanada suggests that the guidance should instead be clarified such that only damage that affects pipeline integrity discovered on operating pipelines and that exceeds applicable code requirements is reportable.

See row 4.

32

TransCanada Pipelines Limited

Damage to a Pipeline

July 2017

Damage to material that has not been placed in operation should be excluded from any reporting requirement. For example, during construction, pipe materials may be damaged during transportation to a construction site or during installation, and such damage either does not exceed technical safety standards (e.g. canadian standards Association) or is repaired before the pipeline is placed in service.

Reporting this type of damage would come at significant administrative time and financial cost, with no corresponding benefit to safety or protection of the environment.

However, TransCanada supports continuation of reporting third-Party strikes or damage to operational pipelines, regardless of the degree of damage, as gathering longitudinal data of contact with operating lines supports safety and the protection of property and environment

See row 4.

33

TransCanada Pipelines Limited

Incident Costs

July 2017

The Proposed Revised Guidelines in Section 11.1.3 would require reporting of information on actual costs and estimated losses or damages of certain incidents, but it is not clear how cost information contributes to transparency or enhanced safety and environmental protection. costs vary significantly among incident types and companies, and do not correspond to incident severity. Such data would vary significantly by company business model (e.g. in-house repair versus third party contracting) and as a result data gathered may not provide for useful comparison. Reporting of such data may also result in the release of proprietary information for pipelines that are not rate regulated. For rate regulated pipelines, cost data is already captured in aggregate as part of financial surveillance by the Board.

TransCanada recommends that the use of incident cost data not be included in the events reporting criteria.

See row 5.

34

TransCanada Pipelines Limited

Operation Beyond Design Limits

July 2017

The proposal in Section 4.1.4 of the Proposed Revised Guidelines to report "any exceedance of product, chemical properties as defined in the tariff limits" should be amended to require only reporting ofexceedances that pose an integrity risk as determined by the operator according to applicable codes. Many tariff exceedances have no material impact on integrity. The current structure of the proposed Revised Guidelines is to require each exceedance to be assessed by an Engineering Assessment (EA), imposing a substantial administrative cost to both industry and the regulator with little or no benefit to safety or the environment. The approach in the Proposed Revised Guidelines appears to assume a tariff exceedance necessarily results in a potential integrity threat, and consequently ought to drive an EA. This is not the case. A tariff exceedance rarely results in integrity concerns. Tariff gas and oil quality specifications are selected for a combination of factors, including commercial considerations, and not purely on the basis of whether or not an exceedance may pose a risk to integrity. The combination of factors and their relative weight may vary by company.

lf the Board continues to propose an exceedance based approach, then TransCanada recommends that the Board, in consultation with industry, develop technical thresholds, common for all companies, based purely on integrity considerations.

See row 9.

35

TransCanada Pipelines Limited

Reporting Timelines

July 2017

TransCanada is concerned that inputting the information into the NEB online event reporting system (OERS) within 3 hours as per section 3.0 of the Proposed Revised Guidelines may pose a risk to safety and impair incident response. The proper primary focus in that timeframe is incident management.

TransCanada recommends that the NEB keep in place the current reporting timelines: a phone notification as soon as possible, not to exceed 3 hours, and input of information into OERS within 24 hours of the incident.

The timelines for reporting have not changed, the original Guidelines indicate that:

• Significant incidents: Phone call to TSB and OERS input within 3 hours
• All other incidents: Input to OERS within 24 hours

The Revised Guidelines indicate:

Immediately Reportable Events: Phone call to TSB and OERS input as soon as possible and no later than 3 hours.

All other incidents: Input to OERS as soon as possible and no later than 24 hours.

36

TransCanada Pipelines Limited

Implementation of Guidelines

July 2017

Regardless of how the Proposed Revised Guidelines change, a successful transition to a new reporting regime must include a transition period, define the contents of an acceptable implementation plan and change management process for affected entities, and provide reasonable time frames for affected entities to adjust internal processes. This transition period would also allow industry to implementtraining on the new requirements before they go into effect. Finally, where new types of incidents are now required to be reported, reporting should only be required for those incidents discovered after the completion date of the implementation plan and change management process.

A grandfather clause should be introduced into the final reporting guidelines such that incidents discovered prior to the completion of the change management transition period would be handled according to the guidance and requirements in place atthe time of the incident's discovery.

See row 19.

37

CEPA

Operations beyond design limits

October 2017

Although the term "design limits" is not specifically defined in the OPR or CSA Z662, CEPA understands that the intent is specific to reporting incidents where it is confirmed that the pipeline's structural design limit has been exceeded. CEPA suggests that this is more appropriate than reporting exceedances of parameters that, only by inference, may or may not have a possibility to affect a pipeline's structural design limit. Exceeding such parameters without affecting a pipeline's structural design limit may meet the definition of a near miss, however, it would not meet that of an incident. For example:

1) Pipe exposure: On its own, pipe exposure does not necessarily equate to exceeding design limits. The design limits in the context of safety and integrity are those based on pipeline structural integrity. Many other requirements within the CSA standards are recommendations and good practices, and should not be considered as design limits. CEPA interpret's the NEB's view is that if a pipeline is designed to operate while buried, the operation of the same pipeline uncovered is operation beyond design limits. CEPA suggests that the key technical concept is whether the physical context in which the pipeline operates has changed such that the pipe is subject to stress or other physical impairment resulting in unsafe operations (i.e. operating beyond design limit). A pipeline designed to operate which covered may also safely operate uncovered. In the same way that not all slope movement will result in operation beyond design limits, not all loss of cover will result in operation beyond design limits.

2) Self-imposed pressure restrictions: Requiring companies to report excursions of self-imposed pressure restrictions would have a dampening effect on imposing those pressure restrictions in the first place. Companies often self-impose pressure restrictions for precautionary reasons on a temporary basis pending in-line inspections or other verification activities. The Board has the power to test the adequacy and effectiveness of a company's controls through inspections, audits or other available compliance verification mechanisms.

For the purposes of notification under section 52 of the OPR, the Board employs the following definition for "an operation beyond design limts":

The operation, for any amount of time, of a pipeline beyond the its structural design limit criteria for which the pipeline was designed and/or the operation of the pipeline beyond criteria imposed by the Board to mitigate a condition on the pipeline. This includes any condition that triggered an engineering assessment to be conducted to determine continued fitness for service of the pipeline. Note: Further analysis and/or an engineering assessment may be required to determine if the structural design limit has been exceeded.

Note: Further analysis and/or an engineering assessment may be required to determine if the structural design limit has been exceeded.

The NEB does not agree with the rationale in CEPA’s position. The NEB is of the view that when a company operates beyond its design limits it is a strong indicator that the company does not have the appropriate operational controls in place to prevent these events from happening. The lack of or inadequate operational controls may have a direct impact on safety and the reporting of these events may lead to opportunities to prevent more serious incidents form occurring. As such staff have proposed a conservative definition in alignment with the precautionary approach; staff purposely intend on capturing occurrences where it is unclear that an “integrity concern” was caused.

It is important to note that the Onshore Pipelines Regulations does not provide any definition or even an opportunity to define the term “near miss” as referenced by CEPA. Indeed, OBDL incidents in general could all be considered near misses in general terms; however, they are defined as incidents in the OPR and therefore the term “near miss” is not relevant to the current conversation.

CEPA presents details on two possible cases. The NEB has provided a respose to the two specific cases outlined by CEPA:

1. Pipeline exposure. Cover affords the pipe some measure of protection. Unless the company can point to where exposure of the pipeline was specifically addressed in the Design Base Memorandum and how it was incorporated in its design and construction, a cover less than design cover is operating beyond design limits. In short, a pipeline that was designed to be buried should remain buried.

2. Self-imposed pressure restrictions. The NEB does not believe that companies would stop applying precautionary pressure restrictions due to a reporting requirement. This would not be a responsible action to take and would precipitate a reaction from NEB if found during the course of a compliance activity. While the Board does have the power to test the adequacy/effectiveness of company controls, the argument is moot as it intends to use this data to help inform those activities and as such it serves only to increase the efficiency and effectiveness of its powers.

In the context of this respose, the NEB has also provided additional details on CEPA proposed changes in rows 38 to 40.

38

CEPA

Operations beyond design limits

October 2017

Same as above

– operation of a pipeline at a temperature greater than the design temperature

CEPA did not provide a specific rationale to support this recommended change. The NEB considered CEPA's recommended change and does not agree. See row 37 for more details.

39

CEPA

Operations beyond design limits

October 2017

Same as above

– slope movements

The NEB does not agree with the proposed change. The NEB is of the view that there are two types of events that are categorized as examples of operating beyond design limits:

1) When a slope's movement exceeds what was predicted at the design stage.

2) If an unstable slope is discovered in Operation that was not identified during the design stage.

The NEB has added clarification to the Guidelines to this effect.

40

CEPA

Operations beyond design limits

October 2017

Same as above

– facility designed for sweet product; any exceedance of product's chemical properties as defined in the tariff limits

CEPA did not provide a specific rationale to support this recommended change. The NEB considered CEPA's recommended change and do not agree. The NEB is of the view that the introduction of a product the pipeline was not designed to carry is an operation beyond deign limits.

41

CEPA

Incident Costs

October 2017

Based on CEPA's review of the proposed changes, and considering the discussion that took place during the meeting on September 29, 2017, CEPA believes that including incident costs does not add value to the effectiveness of incident reporting and does not add value to the transparency interests of Canadians. Reporting costs associated with an incident will vary widely due to individual company processes and procedures. For example, companies may have different methods of tracking costs. A company that hires a contractor to respond to an incident will have a different cost structure and resulting costs compared to a company that relies on internal response capabilities. Further to this point, a company may choose to pay for differing levels of contingency or back up resources. These could all be appropriate solutions for responding to an incident, but result in very different costs for similar event types and outcomes .

CEPA recommends the revised Event Reporting Guidelines not include incident cost requirements. If the NEB does require such information there needs to be clarity on the purpose of collecting the information as well as its intended use. This information should be collected through other more appropriate channels on a case-by-case basis.

The NEB has considered CEPA's comments and does not agree. As outlined in the meeting held with CEPA on September 29, 2017 the NEB requires this information because:

– On 19 June 2016, the Pipeline Safety Act (Bill C-46) came into force and amended the National Energy Board Act to, among other things, impose additional financial requirements on companies. The NEB will begin collecting incident cost information from companies in order to have a more adequate data set to inform the assessment of companies’ financial resources plans, as well as the circumstances which would warrant financial resource amounts that are greater than the absolute limit of liability that applies to them.

– Bill C-46 also provided the NEB with the additional authority to order a company to reimburse others that have incurred costs or expenses in relation to a pipeline release. A sound understanding of costs will be required in order to assess applications from third parties of this nature.

– Commencing with the 2017-2018 fiscal year, the Board will use “collection of information regarding the monetary impact of spills” as an indicator that companies are cleaning up spills in an efficient and effective manner, as part of its reporting to Parliamentarians (through our Departmental Results Framework). This new performance indicator may, in and of itself, raise public interest in spill costs.

The NEB agrees that incident costs vary. However the NEB is not persuaded that this is a reason not to collect the data, rather it informs the appropriate approach to analysing the data. In addition, given the other details reported in the OERS including details on location and magnitude (e.g. amount of product released), incident costs would not be completely without context as CEPA implies. While additional context may be needed at some point, the NEB maintains that the total costs of an incident still provide a rough indication of the level of effort required to correct the consequences caused by the incident.

OERS is the system of record of incident data and, because the costs of an incident are intrinsically linked to that incident, it is the most appropriate place to collect the data. Given that the NEB estimates an average of 3 incidents per year will require reporting of costs the creation of a "more appropriate" channel to report costs is unncessessary. Note that changes will be made to OERS to accomodate the longer timelines associated with incident costs.

42

CEPA

Small Fires

October 2017

Fires that are extinguished immediately should not be reportable. Fire reporting should only be required when it involves or threatens to ignite a commodity, damages or threatens to damage infrastructure, or when the fire is large, uncontrolled or cannot be extinguished easily and poses a threat to people, property, environment, or the safe operation of a pipeline under NEB jurisdiction.

CEPA proposes the following edits to Section 4.1.2:

For the purposes of notification under section 52 of the OPR, the Board employs the following definition for an "unintended fire or explosion":

Any unintended sustained fire or explosion that is caused by or impacts the construction, operation or abandonment of a pipeline.

Events that fall under this definition include, but are not limited to:

• Battery explosion;
• Fire caused by an arc, or a cable fault or a breakdown of any component of the uninterruptible power system (UPS) or the back-up generator;
• Wildland or forest fires that damage pipeline infrastructure or impact the construction, operation or abandonment of a pipeline.

Events that are not reportable under this section include, but are not limited to:

• Events that are not caused by the construction, operation or abandonment of a pipeline and do not have a material impact on the construction, operation or abandonment of a pipeline (e.g. grass fires that are caused by another party and do not impact pipeline facilities or operations).

The NEB disagrees that only sustained fires should be reported and that small welding or housekeeping fires should be specifically excluded. Safety staff consider small fires in aggregate to be a potential soft signal indicating a problem with fire prevention procedures or equipment. Adding “sustained” to the requirements would, in staff's view, result in fires be largely underreported.

The NEB also does not consider the addition of “material” to the last paragraph a meaningful change. The addition does not provide any extra clarity and only serves to provide room for interpretation.

43

CEPA

Fugitive Emissions

October 2017

As currently framed, Section 4.1.3 in the proposed updated guidelines would require regulated companies to report "releases due to venting or activation of pressure relief systems that are greater than a total volume of 30,000 standard cubic metres" regardless of whether the release is "unintended or uncontrolled" or a part of operation as the original design intended. CEPA interprets the NEB's approach to reporting to assume a release of fugitive emissions over the threshold is considered an incident regardless of whether it poses a risk to the public or the environment. CEPA believes the release threshold of 30,000 standard cubic metres should be limited only to those releases that are unintended or uncontrolled. Efforts to collect data on fugitive emissions or reduce fugitive emissions should be dealt with through existing measures and agencies.

CEPA proposes the following edit to Section 4.1.3:

"releases due to venting or activation of pressure relief systems that are greater than a total volume of 30,000 standard cubic metres and are deemed to be unintended or uncontrolled"

The NEB agree with CEPA's rationale. A release that occurs due to planned venting or activation of pressure relief systems is arguably both intended and controlled and therefore does not logically constitute an incident. As such the NEB proposes to remove the wording from the document entirely. Regardless, companies still must meet the fugitive emissions reporting requirements outlined by Environment and Climate Change Canada (ECCC). The data reported to ECCC is available to the NEB.

44

CEPA

Precautionary Approach

October 2017

CEPA suggests that some sections of the document still require further clarification to ensure all events that meet the precautionary reporting principle are aligned. This is particularly important with respect to proposed reporting requirements regarding potential leaks. For example, when dead vegetation is spotted along a right-of-way an assessment is completed to determine the cause as there could be many causes other than pipeline leaks. If, during the initial assessment, professional judgment by the pipeline operator determines, based on the balance of information available, that it is a pipeline leak, then taking a precautionary approach to reporting should be considered. Timing for that initial analysis should be a factor as well; if it can be done quickly (which may take several days) then a precautionary report may not be appropriate. However, if there are limitations that drive more time for the initial assessment (e.g. seasonal access) then a precautionary report may be appropriate.

The NEB has reviewed all sections of the Revised Guidelines to ensure they are aligned with respect to precautionary reporting. The NEB agrees that judgement plays an important role in determining whether to report something from a precautionary standpoint. There is nothing currently in the language of the Revised Guidelines that suggests otherwise. The NEB does not agree that adding further parameters provides any additional clarity. The NEB also entirely disagrees with CEPA’s position that “several days” may be required for an initial analysis prior to a precautionary report. These are specifically the cases that the NEB is intending to avoid by having an incident reported from a precautionary standpoint.

The NEB agrees that the reporting timeline (i.e. 84 days) for final submission will start only when the precautionary status is removed.

45

CEPA

Transition Period of New Requirements

October 2017

No specific feedback.

In consideration of the effective collaborative process that the NEB, CEPA and its members have undertaken, CEPA requests that the NEB share the final draft of the revised guidelines for a "fatal flaw" review. CEPA suggests that this could be undertaken relatively quickly by its members, and that it should result in fewer surprises upon final release.

Once the guidelines are finalized, CEPA recommends a six-month transition period for implementing new reporting requirements in order to ensure adequate time for regulated companies to educate staff and revise processes.

The NEB agrees that the consultation has been productive and there remains areas where CEPA and the NEB are not in agreement. There have been no “fatal flaws” identified to date and therefore no reason to believe one would be identified at this stage. As such the NEB did not perform a final review with CEPA.

The NEB does not believe a six month transition period for implementing new reporting requirements is appropriate. The changes are clarifications to existing reporting requirements that are already in effect. In addition, CEPA and its member companies first saw the Revised Guidelines in June 2017 and NEB staff has been transparent in their responses to the initial feedback and the direction the Revised Guidelines were heading. Therefore regulated companies have had four months to consider how they might implement changes should they come into effect. Instead the NEB has provided a transition period with the Revised Guidelines coming to effect April 1, 2018.