ARCHIVED - National Energy Board Onshore Pipeline Regulations, 1999 (OPR-99) Final Audit Report for Integrity Management, Safety, Environmental Protection, Emergency Management, Crossings and Public Awareness Programs - Appendix I - Integrity Management Program Audit Evaluation Table

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Appendix I
Spectra Energy Management Inc. as General partner
and Agent for Spectra Energy Empress L.P. (SET-PTC)
Integrity Management Program Audit Evaluation Table

Introduction
1.0 Policy and Commitment
- 1.1 Policy and Commitment Statements
2.0 Planning
3.0 Implementation
4.0 Checking and Corrective Action
5.0 Management Review
- 5.1 Management Review

Introduction

Throughout this appendix, reference is made to a document related to the integrity program of SET_PTC’s parent company, Spectra Energy, also referred to as Spectra Energy Transmission (SET). This document is titled the SET Empress L.P. Petroleum Transmission Company (PTC) Pipeline Integrity Program (SET-PTC PIP) and it refers to the PTC/Empress pipeline system in Saskatchewan. In addition, any italicized text corresponds to excerpts taken directly from SET-PTC documents.

Also, there was no separate Pressure Equipment Integrity Manual (PEIM) for SET-PTC at the time of the Integrity Management Program (IMP) audit. During the audit pre-close-out discussion held 9 January 2013, SET-PTC provided the Integrity Management System (IMS) Pressure Equipment Integrity Manual (PEIM) which described the quality assurance, inspection and continued safe operation requirements for boilers, pressure vessels and pressure piping as well as the inspection practices for the associated above ground equipment along the PTC pipeline. Information contained in this document has been included in this appendix, where applicable.

1.0 POLICY AND COMMITMENT

1.1 Policy and Commitment Statements

Expectations:

The company shall have a clearly articulated policy and leadership commitment approved and endorsed by management (the Policy).

References:^{Footnote 1}

OPR-99 Sections 4, 47 and 48
CSA Z662-11 Clauses 3.1.2(a) and 3.2

Assessment:

SET-PTC PIP
With respect to sub-element 1.1 Policy and Commitment, the SET-PTC PIP contains the management statement in Section 1 of the document as follows: “The Pipeline Integrity Program (PIP) is a process for setting policy and expectations for all personnel involved in the operation and maintenance of the Empress L.P. – Petroleum Transmission Company (PTC) Pipeline and Spur Pipelines. Highly reliable pipelines and quality pipeline integrity practices are critical to the success of the pipeline business. Everyone who engages in the operation, maintenance and reliability of our assets has a personal responsibility for getting pipeline integrity right. Managers and all field personnel should follow this document in order to comply with Empress L.P. – PTC Pipeline integrity policy.”

This policy and commitment statement is signed by the Vice President Operations and Engineering, General Manager NGL Midstream and Pipelines, and the Director of Operations Empress.

SET-PTC PEIM
There was no separate PEIM for SET-PTC at the time of the IMP audit, however the SET-PTC PIP policy and commitment statement applies to the PTC pipeline, and therefore covers the pressure equipment associated with the SET-PTC pipeline and facilities.

SUMMARY
Policy and commitment statements exist for the SET-PTC pipeline system. The Operations Management System (OMS) outlines the management commitment and the roles of Operations personnel. The OMS information is located on the SET-PTC intranet site called the Source; however, the SET-PTC policy and commitment document is not located on the Source.

Both management and employees contributed to the development of the OMS. The IMP policy and commitment fits into the hierarchy of the SET-PTC policy and commitments. The OMS is informally reviewed by management with employees but there is no formal communication plan for the various policy and commitment statements. The management system element of communication is reviewed and assessed under 3.4 Communication in this appendix.

Based on documents reviewed and interviews, the Company was able to demonstrate that it has policy approved and endorsed by senior management, which commits to continual improvement and is communicated throughout Spectra Energy.

Compliance Status: Compliant

2.0 PLANNING

2.1 Hazards Identification, Risk Assessment and Control^{Footnote 2}

Expectations:

The company shall be able to demonstrate a procedure to identify all possible hazards. The company shall assess the degree of risk associated with these hazards. The company should be able to support the rationale for including or excluding possible risks in regard to its environment, safety, integrity, crossings and awareness and emergency management and protection programs (management and protection programs). The company shall be able to implement control measures to minimize or eliminate the risk.

References:

OPR-99 Sections 4 (2), 39, 40, 41
CSA Z662-11 Clauses 3.1.2(f), 3.2(a), 3.2(b), 10.5.1.1(d) and 16.2

Assessment:

SET-PTC PIP
With respect to sub-element 2.1,, Section 3.0 Scope, of the SET-PTC PIP states that “the PIP attempts to consider all hazards that may cause significant damage or deterioration to the pipelines.

Section 10.0 Pipeline Risk Assessment and sub-section 10.1 Risk Assessment Principles of the SET-PTC PIP contain a very general statement as follows: “Risk assessment principles, in various forms, have been the foundation of integrity management. Risk assessments can vary in scope or complexity and use different methods or techniques. The ultimate goal of assessing risks is to identify the most significant risks in an effort to develop an effective and prioritized mitigation plan to maintain long term pipeline reliability and integrity.”

Section 9.0 Integrity Elements lists the SET-PTC pipeline monitoring and inspection program elements and includes statements relevant to hazard identification and risks associated with the PTC pipeline and facilities.

SET-PTC PEIM
There was no separate PEIM for SET-PTC at the time of the IMP audit. During the audit pre-close-out discussion held 9 January 2013, SET-PTC provided the IMS PEIM which described the quality assurance, inspection and continued safe operation requirements for boilers, pressure vessels and pressure piping as well as the inspection practices for the associated above ground equipment along the PTC pipeline. Information contained in this document has been included in this appendix, where applicable.

SUMMARY
While the statements quoted in the PIP section indicate that SET-PTC is cognizant of many of the hazards to its pipeline by way of its current monitoring and inspection programs, SET-PTC could not provide a documented hazard identification supporting the rationale for including or excluding industry recognized hazards and/or a documented risk assessment assessing the degree of risk associated with these hazards. A capital project is planned to obtain geo-referenced pipeline and facility data for the PTC pipeline, which would allow SET-PTC to perform a risk assessment with the commercial Dynamic Risk software. This capital project is scheduled for 2013.

Based on documents reviewed and interviews, SET-PTC was not able to demonstrate that it has a procedure to identify all possible hazards. SET-PTC was not able to demonstrate that it has assessed the degree of risk associated with these hazards.

Compliance Status: Non-Compliant

2.2 Legal Requirements

Expectations:

The company shall have a verifiable process for the identification and integration of legal requirements into its management and protection programs. The company should have a documented procedure to identify and resolve non-compliances as they relate to legal requirements which includes updating the management and protection programs as required.

References:

OPR-99 Sections 4, 6, 40 and 41(1)
CSA Z662-11 Clauses 3.1.2(h)(i) and 3.2

Assessment:

SET-PTC PIP
The SET-PTC PIP does not include a section specifically detailing the applicable legal requirements; however Section 2.0 Introduction states that “The PTC is committed to operating and maintaining its pipeline system in a responsible manner that complies with the requirements of CSA Standard Z662 and the National Energy Board – Onshore Pipeline Regulations.” Section 9.9.1 Guidelines for Over Pressure Protection states “The PTC pipelines and all systems delivering Liquefied Petroleum Gas (LPG) must meet the requirements of CSA Z662-07 Section 4.18.”

The date of the original SET-PTC PIP was December 2010, with the latest revision being July 23, 2011. CSA Z662-11 was published in June 2011, so that the SET-PTC PIP should have referenced the latest edition of CSA Z662. This omission is minor in nature since Clause 4.18 Pressure control and overpressure protection of piping is the same in both the 2007 and 2011 versions of CSA Z662. Other Clauses of CSA Z662 have substantively changed in the 2011 version, so that for accurate referencing to this standard, the PIP should reference the latest edition of CSA Z662.

SET-PTC PEIM
There was no separate PEIM for SET-PTC at the time of the IMP audit. During the audit pre-close-out discussion held 9 January 2013 SET-PTC provided the IMS PEIM which described the quality assurance, inspection and continued safe operation requirements for boilers, pressure vessels and pressure piping as well as the inspection practices for the associated above ground equipment along the PTC pipeline. Information contained in this document has been included in this appendix, where applicable.

SUMMARY
The SET-PTC PIP has no process for the identification and integration of its legal requirements other than references imbedded in its Introduction. SET-PTC does not have a procedure for reviewing and updating revisions to the legal requirements. However, SET-PTC personnel have representations on regulatory committees (e.g. Canadian Standards Association (CSA Z662-11 and CSA B51-09), technical committees, and the International Pressure Equipment Association, so that they have a mechanism for being informed on current and upcoming regulations and industry best practices.

The IMS PEIM for SET-PTC pressure equipment does not contain a section on legal requirements although some references are imbedded in section 2.5 (Definitions Terms and Acronyms) where there is reference to such standards as API 510 and ABSA AB-512. This indicates that SET-PTC is aware of the requirements for pressure equipment, but a formal process to identify and integrate its legal requirements has not been included in the SET-PTC PEIM.

Based on documents reviewed and interviews with staff, SET-PTC was not able to demonstrate that it has formally identified its legal requirements or fully integrated its regulatory obligations into its IMP.

Compliance Status: Non-Compliant

2.3 Goals, Objectives and Targets

Expectations:

The company shall have objectives and quantifiable targets relevant to the risks and hazards associated with the company’s facilities and activities (i.e. construction, operations and maintenance). The objectives and targets shall be measurable and consistent with the Policy and legal requirements and ideally include continual improvement and prevention initiatives, where appropriate.

References:

OPR-99 Sections 40, 47 and 48
CSA Z662-11 Clauses 3.1.2(h)(ii) and 3.2

Assessment:

With respect to the sub-element 2.3, the SET-PTC PIP does not contain a section on any specific, measureable goals, objectives and targets; however, in Section 4.0 Program Objectives, the SET-PTC PIP states that its general objectives are:

SET-PTC PIP
With respect to the sub-element 2.3, the SET-PTC PIP does not contain a section on any specific, measureable goals, objectives and targets; however, in Section 4.0 Program Objectives, the SET-PTC PIP states that its general objectives are:

I. To operate and maintain a reliable pipeline system which is safe and is perceived to be safe by all stakeholders.”
II. “To protect the public, employees, the environment, and property while maintaining a safe, efficient and reliable pipeline system.”
III. “To identify, assess and mitigate risk to pipeline integrity.”

Section 6.0 Responsibility, Leadership and Accountability states “Those who have leadership roles in the PTC that includes pipeline integrity are automatically responsible for specific pipeline integrity management performance targets, which include (sub-section vii) measuring, reviewing and improving our pipeline integrity performance.”

SET-PTC PEIM
There was no separate PEIM for SET-PTC at the time of the IMP audit. During the audit pre-closeout discussion held 9 January 2013, SET-PTC provided the IMS PEIM which described the quality assurance, inspection and continued safe operation requirements for boilers, pressure vessels and pressure piping as well as the inspection practices for the associated above ground equipment along the PTC pipeline. Information contained in this document has been included in this appendix, where applicable.

SUMMARY
In March 2012, the Board posted its Pipeline Performance Measures Reporting Requirements stating that operating companies are required to annually report on the new performance measures commencing in 2013. The requirement to report on the new performance measures is in addition to current reporting required under the Onshore Pipeline Regulations, 1999 and the Pipeline Crossing Regulations, Part I and Part II. Part IV of the posted document specifies the reporting requirements for Integrity Management.

SET-PTC has not developed goals, objectives and quantifiable targets relevant to the risks and hazards associated with the PTC pipeline facilities and activities. This is a requirement of Spectra Energy as set out in Section 6.0 Responsibility, Leadership and Accountability, which states that “Those who have leadership roles in the PTC that includes pipeline integrity are automatically responsible for specific pipeline integrity management performance targets, which include (sub-section vii) measuring, reviewing and improving our pipeline integrity performance.”

Based on documents reviewed and interviews with operations staff, SET-PTC was not able to demonstrate that it was in compliance with the requirements of audit sub-element 2.3.

Compliance Status: Non-Compliant

3.0 IMPLEMENTATION

3.1 Organizational Structure, Roles and Responsibilities

Expectations:

The company shall have an organizational structure that allows its management and protection programs to effectively function. The company shall have clear roles and responsibilities, which may include responsibilities for the implementation of the management and protection programs.

References:

OPR-99 Sections 40, 47 and 48
CSA Z662-11 Clauses 3.1.1, 3.1.2(b) and 3.2 8

Assessment:

SET-PTC PIP
Section 6 of the Empress L.P. – PTC Pipeline PIP dated August 10, 2011, details the Responsibilities, Leadership & Accountability for the Pipeline Integrity Program, which includes:

6.1 General Leadership & Accountability statement
6.2 Personnel Responsibilities
- 6.2.1 President, Spectra Energy Transmission – West
- 6.2.2 Vice President of Operations, Spectra Energy Transmission – West
- 6.2.3 General Manager of Operations
- 6.2.4 Area Directors
- 6.2.5 Director of Operations Engineering
- 6.2.6 Regional and Other Managers in Operations
- 6.2.7 Team Leaders of Pipeline Operations
- 6.2.8 Director of (System) Integrity

SUMMARY
The SET-PTC PIP has included general statements for the responsibilities, leadership and accountability for the PTC pipeline. The recently submitted document, IMS PEIM, section 2.4 Organization, details the responsibilities, leadership and accountability for pressure vessels and pressure equipment for SET-PTC.

Based on documents reviewed and interviews with operations staff, SET-PTC was able to demonstrate that it was in compliance with the requirements of the audit element Organizational Structure, Roles and Responsibilities.

Compliance Status: Compliant

3.2 Management of Change

Expectations:

The company shall have a management of change program. The program should include:

identification of changes that could affect the management and protection programs;
documentation of the changes; and
analysis of implications and effects of the changes, including introduction of new risks or hazards or legal requirements.

References:

OPR-99 Section 6
CSA Z662-11 Clause 3.1.2(g)

Assessment:

SET-PTC PIP
During the Board’s audit of the McMahon Processing Plant, Spectra provided its Management of Change (MOC) document dated 2010-11-02, which outlined a consistent approach for operations to ensure that changes to assets were appropriate and that the processes were documented to comply with all regulatory requirements. This MOC document outlined the triggers for invoking this process, the accountabilities, and responsibilities of various departments and personnel to ensure that changes were evaluated for all aspects to ensure that no new or additional hazards were being created with a specific change for any discipline.

SET-PTC PEIM
There was no separate PEIM for SET-PTC at the time of the IMP audit. During the audit pre-close-out discussion held 9 January 2013, SET-PTC provided its IMS PEIM which described the quality assurance, inspection and continued safe operation requirements for boilers, pressure vessels and pressure piping as well as the inspection practices for the associated above ground equipment along the PTC pipeline. Information contained in this document has been included in this appendix, where applicable.

SUMMARY
The Spectra Energy BC Pipeline and Field Services Standard Operating Practice (SOP), reference number 23.1 deals with MOC. This SOP contains a brief description of the scope and purpose of MOC and provides a link to the MOC document on the Source website. While the SOP refers to BC Pipeline and Field Services, the MOC document applies to all Spectra Energy operations, including SET-PTC. The recently submitted document, IMS PEIM, section 2.15 Management of Change, details the scope and MOC requirements and refers to the MOC process located on the Source website for pressure vessels and pressure equipment for SET-PTC.

Based on documents reviewed and interviews with operations staff, SET-PTC was able to demonstrate that it was in compliance with the requirements of this audit sub-element.

Compliance Status: Compliant

3.3 Training, Competence and Evaluation

Expectations:

The company shall have a documented training program for employees and contractors related to the company’s management and protection programs. The company shall inform visitors to company maintenance sites of the practices and procedures to be followed. Training requirements should include information about program-specific policies. Training should include emergency preparedness and environmental response requirements as well as the potential consequences of not following the requirements. The company shall determine the required levels of competency for employees and contractors. Training shall evaluate competency to ensure desired knowledge requirements have been met. Training programs should include record management procedures. The training program should include methods to ensure staff remains current in their required training. The program should include requirements and standards for addressing any identified non-compliances to the training requirement.

References:

OPR-99 Sections 4, 18, 29 and 46
CSA Z662-11 Clauses 3.1.2(c), 3.2 and 10.2.1

Assessment:

SET-PTC PIP
Section 7 of the SET-PTC PIP refers to the training and qualifications for SET-PTC staff in general, and for the PIP. It refers to the Operations Management System (OMS) documentation located on the “Source” and the Learning Management System (LMS) on employee training and competency requirements.

SUMMARY
The training and competencies for SET-PTC personnel involved with the PIP were verified. A Pipeline Operator Qualification Training Program was rolled-out in 2012. This program will address all training and competency requirements noted in Section 7 of the SET-PTC PIP. The LMS will be used to managed and report out on employee status in this training program. Contractors who are granted Spectra Energy employee status and required to take this training, will also be tracked in the LMS.

For the SET-PTC pipeline and facilities, the SET-PTC PIP, Section 6.0 Responsibility, Leadership and Accountability, states in sub-section 6.2.9 for the PTC Pipeline Integrity Specialist, “Ensure that employees and contractors directly involved with pipeline integrity activities are properly trained and that only appropriately trained personnel carry out integrity activities.” Adherence to this requirement was confirmed during the audit inspections as described below.

The audit inspections were conducted during the maintenance pigging operation of the Cochin spur and an excavation of the PTC pipeline to investigate inline inspection anomalies. The training, competency and adherence to Spectra SOP’s were confirmed during both inspections. Specifically observed were: SOP 6.3 Pipeline Pigging, SOP 6.5 Pigging Facilities Inspection, SOP 16.3 Safe Pressures for Pipeline Excavation, SOP 17.1 Evaluation of Corroded Pipe, SOP 17.2 SCC Assessment and Repair , SOP 17.5 Records and Reporting, among others.

For the PTC pipeline excavation, the Spectra Energy Empress L.P. – PTC Pipeline Operations and Maintenance Activity Notification (October 10, 2011) to the Board for the excavation at KMP 706.510 was examined. Also, the final inspection report, which included the certifications of contract personnel involved in the pipeline excavation, was examined.

Based on documents reviewed and interviews with operations staff, SET-PTC was able to demonstrate that it was in compliance with the requirements of this audit sub-element.

Compliance Status: Compliant

3.4 Communication

Expectations:

The company shall have an adequate, effective and documented communication process(es):

to inform all persons associated with the company’s facilities and activities (interested persons) of its management and protection programs policies, goals, objectives and commitments;
to inform and consult with interested persons about issues associated with its operations;
to address communication from external stakeholders;
for communicating the legal and other related requirements pertaining to the management and protection programs to interested persons;
to communicate the program’s roles and responsibilities to interested persons.

References:

OPR-99 Sections 4, 18, 28, 29, 40, 47 and 48
CSA Z662-11 Clauses 3.1.2(d) and 3.2

Assessment:

SET-PTC PIP
With respect to communication, Section 6 of the Empress L.P. – PTC Pipeline PIP dated August 10, 2011, details the Responsibilities, Leadership & Accountability for the PIP with responsibilities relevant to communication.

The recently submitted document, IMS PEIM, at sections 2.7 Management Responsibility and 2.7.3 Management Commitment states “Communications regarding key learnings, events, or changes affecting the safety of pressure equipment will be transferred as necessary to the broader organization through an effective platform or media. Examples of these communications might include, but are not limited to, Incident Reporting, Information Bulletins, electronic mail, or informing the Management Representative and the AMT of relevant changes to legislation.”

SUMMARY
In response to an Audit Information Request, Spectra personnel stated:

“With respect to pipeline integrity, we do not have a documented communication plan however, the pipeline System Integrity group addresses communication through the following events:

An annual SOP and Integrity Program review involving all directors, managers, team lead system integrity and other subject matter experts;
A monthly Pipeline Integrity Conference call chaired by System Integrity with invitations to directors, managers, team leads and field technicians;
The annual pipeline integrity workshop (typically 40 to 50 attendees);
Frequent integrity presentations to the Operations Steering Committee; and
Other special topic meetings initiated as required by System Integrity.”

SET-PTC has demonstrated that it has several methods of ad hoc communication of relevant integrity related issues and the SET-PTC PIP clearly states the responsibilities and accountabilities for communication.

CSA Z662-11 Clause 3.1.1 states that “Operating companies shall develop, implement, and maintain a documented safety and loss management system for the pipeline system that provides for the protection of people, the environment and property.” Clause 3.1.2 states “The safety and loss management system shall include the following elements: (d) a communication plan that supports the effective implementation and operation of the safety and loss management system.”

SET-PTC was not able to demonstrate that it has an adequate, effective and documented communication process, and therefore did not demonstrate compliance with this audit sub-element.

Compliance Status: Non-Compliant

3.5 Documentation and Document Control

Expectations:

The company shall have documentation and document control process that supports its management and protection programs. The documentation shall be reviewed and revised at regular and planned intervals. Documents shall be revised immediately where changes are required as a result of legal requirements or where failure to make immediate changes may result in negative consequences. The company should have procedures within its management and protection programs to control documentation and data as it relates to the risks identified in element 2.0.

References:

OPR-99 Sections 4, 27, 47, 48
CSA Z662-11 Clauses 3.1.2(e)(f), 3.2 and 10.5.1.1(a) to (d)

Assessment:

SET-PTC PIP
Section 8.0 of the SET-PTC PIP, Documentation, states that “All asset and integrity data is located in the PTC in the Pipeline Integrity Filing System at the Richardson Terminal” and that “The PIP is maintained by the Pipeline Integrity Specialist and is located in the Richardson Terminal office.” The SET-PTC PIP, Revision 1.2 dated July 23, 2011 contains the required document control components.

SUMMARY
Document review is an integral part of the audit process. SET-PTC provided numerous documents that illustrated its adherence to the requirements for documentation and document control.

Based on documents reviewed and interviews with operations staff, SET-PTC was able to demonstrate that it was in compliance with the requirements of this audit sub-element.

Compliance Status: Compliant

3.6 Operational Control-Normal Operations

Expectations:

The company shall establish and maintain a process to develop, implement and communicate mitigative, preventive and protective measures to address the risks and hazards identified in elements 2.0 and 3.0. The process shall include measures to reduce or eliminate risks and hazards at their source.

References:

OPR-99 Sections 4, 27, 36, 37, 39 and 40
CSA Z662-11 Clauses 3.1.2(f), 3.2 and 10

Assessment:

SET-PTC PIP
For the PTC pipeline, one of the risks to be mitigated and prevented with respect to operational control-normal operations, is over pressure in the pipeline. Section 9.9 of the SET-PTC PIP deals with Over Pressure Protection.

SUMMARY
The audit was able to verify the documents and records indicating that 17 Pressure Safety Valves serving the PTC pipeline and facilities were regularly serviced and inspected on an interval of three years. The service records are being stored in VisionsTM software which is used to manage the servicing, inspection and surplus inventory records.

While the SET-PTC PIP contains a description and the requirements for overpressure protection, there was no SET-PTC PEIM document at the time of the audit. The SET-PTC PIP’s section on overpressure protection applies to the pipeline and associated facilities. The recently submitted IMS PEIM section 2.19 adequately describes the requirements and responsibilities for overpressure protection and protective devices.

Based on documents reviewed and interviews with operations staff, SET-PTC was able to demonstrate that it was in compliance with the requirements of this audit sub-element.

Compliance Status: Compliant

3.7 Operational Control-Upset or Abnormal Operating Conditions

Expectations:

The company shall establish and maintain plans and procedures to identify the potential for upset or abnormal operating conditions, accidental releases, incidents and emergency situations. The company shall also define proposed responses to these events and prevent and mitigate the likely consequence and/or impacts of these events. The procedures must be periodically tested and reviewed and revised where appropriate (for example, after emergency events).

References:

OPR-99 Sections 4, 32, 37, 40 and 52
CSA Z662-11 Clauses 3.1, 3.2, 4.18, 10.9.5

Assessment:

The evaluation of this audit element in Appendix II – Safety and Appendix IV Emergency Management has verified that SET-PTC has developed and implemented an emergency preparedness and response plan. The Spectra Energy Standard Operating Practice 13.1 Emergency and Incident Response Procedures refers to the Emergency Management Manual located on the Source and outlines the initial actions that must be taken, the roles and responsibilities of the Emergency Response Team and the documentation that should be completed in response to an incident.

The Integrity Management Program has no additional requirements for this management system sub-element.

Compliance Status: Not-Applicable

4.0 CHECKING AND CORRECTIVE ACTION

4.1 Inspection, Measurement and Monitoring

Expectations:

The company shall develop and implement surveillance and monitoring programs. These programs should address contract work being performed on behalf of the company. These programs should include qualitative and quantitative measures for evaluating the management and protection programs and should, at a minimum, address legal requirements as well as the risks identified as significant in elements 2.0 and 3.0. The company should integrate the surveillance and monitoring results with other data in risk assessments and performance measures, including proactive trend analyses. The company shall have documentation and records of its surveillance and monitoring programs.

References:

OPR-99 Sections 4, 27, 28, 36, 37, 39, 47, 48, 53(1) and 54(1)
CSA Z662-11 Clauses .1.2(h)(i), 3.2, 9 and 10

Assessment:

SET-PTC PIP
Section 9.0 of the SET-PTC PIP, Integrity Elements details SET-PTC’s inspection, measurement and monitoring program for pipeline integrity. These are: Corrosion Protection and Mitigation; Corrosion Coupons and Chemical Inhibitors, Pipeline Inspection by In-Line Inspection; Defect Assessments; Non-In-Line Inspectable Facility Piping; SCC Management; Right of Way Monitoring/Patrols; Above-Ground Pipeline Surveys; River Crossings; Geotechnical Surveys; and Pipeline Depth of Cover Monitoring.

The recently submitted IMS PEIM sections 2.16.7 Inspection Procedures, 2.16.8 Inspection Plans, 2.16.10 Periodic Integrity Assessment, 2.16.10(a) Equivalent On-Stream Inspection and 2.17 Non-Destructive Examinations and Testing outlines SET-PTC’s inspection, measurement and monitoring programs for pressure equipment.

SUMMARY
Based on documents reviewed and interviews with operations staff, SET-PTC was able to demonstrate that it was in compliance with the requirements of this audit sub-element.

Compliance Status: Compliant

4.2 Corrective and Preventive Actions

Expectations:

The company shall have a process to investigate incidents or any non-compliance that may occur. The company shall have a process to mitigate any potential or actual issues arising from such incidents or non-compliances. Such mitigation may include appropriate timing and actions for addressing the issues that arise. The company shall demonstrate that it has established a documented procedure to:

set criteria for non-compliance;
identify the occurrence of any non-compliances;
investigate the cause(s) of any non-compliances;
develop corrective and/or preventative actions; and
effectively implement the required corrective and/or preventative actions.

The company shall develop procedures to analyze incident data in order to identify deficiencies and opportunities for improvement in its management and protection programs and procedures.

References:

OPR-99 sections 4, 6 and 52
CSA Z662-11 Clauses 3.1.2(g) and 3.1.2(h)(i), 3.2, 10.3.6, 10.4.4 and 10.5

Assessment:

SET-PTC PIP
The SET-PTC PIP does not contain a specific section on Corrective and Preventive Actions, but does include however, Section 9.8 Incident Investigations, which states “To avoid repeated incidents it is necessary to thoroughly understand what caused the event. In those instances where the cause is not obvious and when materials or components are available, a detailed analysis shall be conducted under the direction of the System Integrity. The results of these analyses shall be shared with all pipeline personnel involved with integrity activities.”. SET-PTC also provided information on its incident investigation and reporting processes and procedures.

SUMMARY
While SET-PTC has demonstrated it has documented procedures to meet many of the Board’s expectations for this sub-element, it did not demonstrate that it has developed or implemented procedures to analyze incident data in order to identify deficiencies and opportunities for improvement in its management and protection programs and procedures.

The audit was able to verify the SET-PTC’s incident data from 2005 to present and determine that there were identifiable trends in the systems (gathering and transmission pipelines), facilities and equipment and management system disciplines. SET-PTC should have analyzed this data to identify trends, systemic issues and opportunities for improvement of its IMP.

Based on documents reviewed and interviews with operations staff, SET-PTC was not able to demonstrate that it was in compliance with the requirements of this audit sub-element.

Compliance Status: Non-Compliant

4.3 Records Management

Expectations:

The company shall establish and implement procedures to ensure that the records supporting the management and protection programs are retained, accessible and maintained. The company shall, as a minimum, retain all records for the minimum lengths of time as required by the applicable legislation, regulation and standards incorporated by reference into the regulation.

References:

OPR-99 Sections 4, 41 and 56
CSA Z662-11 Clauses 3.1.2(e), 3.2, 9.11, 10.4 and 10.5.1.1(c)

Assessment:

SET-PTC PIP
While there was no specific section in the SET-PTC PIP dealing with records management, the audit was able to verify through interviews, document and record requests that SET-PTC has developed and implemented a records management process. The records management process ensures that the appropriate and required records are maintained and were readily available upon request.

The recently submitted IMS PEIM section 2.16.5 speaks to the requirements for records of pressure equipment assets, and the design and implementation of an ABSA (Alberta Boilers Safety Association) qualified Owner’s User Program which meets the requirements for a records management program.

SUMMARY
Based on documents reviewed and interviews with operations staff, SET-PTC was able to demonstrate that it was in compliance with the requirements of this audit sub-element.

Compliance Status: Compliant

4.4 Internal Audit

Expectations:

The company shall develop and implement a documented process to undertake audits of its management and protection programs and procedures. The audit process should identify and manage the training and competency requirements for staff carrying out the audits. These audits shall be conducted on a regular basis.

References:

OPR-99 Sections 4, 53 and 55
CSA Z662-11 Clauses 3.1.2(c) and 3.1.2(h)(iii)

Assessment:

SET-PTC PIP
The SET-PTC PIP Section 11.0 Audits, states “PTC corporate auditors regularly conduct audits of operations and the programs used by operations. The detailed charter of the Spectra Energy Audit Services Department can be found on the Spectra Intranet. Additional targeted audits may be requested by senior management as required.” [...]

The recently submitted IMS PEIM section 2.20 Internal Audits describes the scope, procedure and responsibilities for internal audits, but SET-PTC has not conformed with its own internal procedure which states that the “Integrity Management System administered at Spectra Energy’s facilities are subject to an internal audit once per calendar year with no period greater than 18 months between audits.”

SUMMARY
Contrary to SET-PTC’s internal procedure, there has not been an internal audit of the SET-PTC PIP since 2005. SET-PTC has completed Assurance Reviews; however, they do not examine evidence or documentation. Documents presented by SET-PTC at the audit pre-closeout discussion did not demonstrate:

the methodology to determine appropriate audit frequency;
whether subject matter experts are involved in internal audits; or
that the audit results are incorporated into the IMP.

Based on documents reviewed and interviews with operations staff, SET-PTC was not able to demonstrate that it was in compliance with the requirements of this audit sub-element.

Compliance Status: Non-Compliant

5.0 MANAGEMENT REVIEW

5.1 Management Review

Expectations:

The company shall formally review the management and protection programs for continuing suitability, adequacy and effectiveness. The review should be based on appropriate documentation and records including the results of the surveillance, monitoring and audit programs. This review should be formal and documented and should occur on a regular basis. The management review should include a review of any decisions, actions and commitments which relate to the improvement of the programs and the company’s overall performance.

References:

OPR-99 Sections 4, 40 and 55
CSA Z662-11 Clauses 3.1.2(h)(iii) and 3.2

Assessment:

SET-PTC PIP
Section 6.0 of the SET-PTC PIP outlines the Responsibilities, Leadership & Accountability for the Empress L.P. – PTC Pipeline Integrity Program. Section 6.1 states “Those who have leadership roles in the PTC that includes pipeline integrity are automatically responsible for specific pipeline integrity management performance targets, which include: sub-section vii Measuring, reviewing and improving our pipeline integrity performance.”

Section 8.2 Integrity Programs, Plans and Practices states that “Each year the PTC Pipeline Manager will initiate a review of the Integrity Program. This review will consider any regulatory changes, audit results, suggested changes, industry practices and events. The results of this review will be provided to the Empress Operations Manager.”

SUMMARY
In response to the Draft Audit Report, SET-PTC provided the SET-West Occupational Steering Committee Short Term Incentive Pay (STIP) Scorecard for December 2012 (Scorecard) and commented that the Scorecard included Key Performance Metrics for Integrity and Measurement Compliance. The one performance metric described in the Scorecard was Cathodic Protection Effectiveness (Transmission). While the Scorecard describes one performance metric reviewed by management to monitor IMP performance, it was not adequate to demonstrate the required link between current management review processes and IMP performance, or that SET-PTC is conducting regular management review of its IMP to assess its continued suitability, adequacy and effectiveness.

There are ad hoc, non-formalized management reviews occurring; however, there are no documented processes for these (e.g., annual review of the PIP and SOPs, monthly IMP meetings, annual IMP workshops, etc.). Senior management review in this instance is not formally undertaken with a view to ensuring the suitability, adequacy and effectiveness of the SET-PTC PIP.

Based on documents reviewed and interviews with operations staff, SET-PTC was not able to demonstrate that it was in compliance with the requirements of this audit sub-element.

Compliance Status: Non-Compliant

Date modified:: 2021-02-04

ARCHIVED - National Energy Board Onshore Pipeline Regulations, 1999 (OPR-99) Final Audit Report for Integrity Management, Safety, Environmental Protection, Emergency Management, Crossings and Public Awareness Programs - Appendix I - Integrity Management Program Audit Evaluation Table

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Table of Contents

Introduction

1.0 POLICY AND COMMITMENT

1.1 Policy and Commitment Statements

Expectations:

References:Footnote 1

Assessment:

Compliance Status: Compliant

2.0 PLANNING

2.1 Hazards Identification, Risk Assessment and ControlFootnote 2

Expectations:

References:

Assessment:

Compliance Status: Non-Compliant

2.2 Legal Requirements

Expectations:

References:

Assessment:

Compliance Status: Non-Compliant

2.3 Goals, Objectives and Targets

Expectations:

References:

Assessment:

Compliance Status: Non-Compliant

3.0 IMPLEMENTATION

3.1 Organizational Structure, Roles and Responsibilities

Expectations:

References:

Assessment:

Compliance Status: Compliant

3.2 Management of Change

Expectations:

References:

Assessment:

Compliance Status: Compliant

3.3 Training, Competence and Evaluation

Expectations:

References:

Assessment:

Compliance Status: Compliant

3.4 Communication

Expectations:

References:

Assessment:

Compliance Status: Non-Compliant

3.5 Documentation and Document Control

Expectations:

References:

Assessment:

Compliance Status: Compliant

3.6 Operational Control-Normal Operations

Expectations:

References:

Assessment:

Compliance Status: Compliant

3.7 Operational Control-Upset or Abnormal Operating Conditions

Expectations:

References:

Assessment:

Compliance Status: Not-Applicable

4.0 CHECKING AND CORRECTIVE ACTION

4.1 Inspection, Measurement and Monitoring

Expectations:

References:

Assessment:

Compliance Status: Compliant

4.2 Corrective and Preventive Actions

Expectations:

References:

Assessment:

Compliance Status: Non-Compliant

4.3 Records Management

Expectations:

References:

Assessment:

Compliance Status: Compliant

4.4 Internal Audit

Expectations:

References:^{Footnote 1}

2.1 Hazards Identification, Risk Assessment and Control^{Footnote 2}