Alberta AG to audit pipeline safety ‘as soon as reasonably possible’

Alberta Energy Minister Ken Hughes
Alberta Energy Minister Ken Hughes announcing the release of a third-party pipeline safety review in August, 2013. Global News

Alberta’s Auditor General has pledged to review the safety of Alberta’s pipelines amid renewed scrutiny of oilsands on both sides of the border, and five months after a Global News investigation revealed gaps in oversight among regulators who can’t keep up with a growing industry.

An audit will take place “as soon as reasonably possible,” Auditor General Merwan Saher wrote in letters to Alberta’s NDP and Wildrose Party, each of whom pressed Saher for closer scrutiny of pipeline regulation late last month.

Crude Awakening: Explore the Global News investigation

The audit will focus on the government’s monitoring, inspection and enforcement systems “to ensure compliance with Alberta’s pipeline regulations,” Saher wrote. None of these was touched upon in a months-long pipeline safety review commissioned by the Energy Minister Ken Hughes in July, 2012, prompted by several major pipeline spills.

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The review was widely criticized for failing to examine compliance with regulations or any specific incidents.

It “did not cover what needs to be covered,” Wildrose energy critic Jason Hale said in an interview.

“We need to ensure that we are enforcing the regulations that are in place.”

NDP MLA Rachel Notley noted it was New Democrats who first called for an audit more than a year ago – an audit put aside until the Energy Ministry finished its review.

“We now know, of course, that review was really quite a waste of time and failed to address many of the issues Albertans were concerned about,” she told reporters Thursday.

“I’m afraid that what we’re going to find is we have become entirely reliant on industry self-reporting, that we don’t have enough inspectors, that we don’t have a good sense of the general quality of the inventory we have right now, in terms of pipelines; that we’re not following up.”

Watch: Alberta Energy Minister Ken Hughes responds to pipeline safety review

The Auditor General has been considering a pipeline safety audit for much of the past year, spokeswoman Kim Nishikaze said in an interview.

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The office hasn’t yet drawn up a plan outlining the audit’s scope or timeline, and it’s still uncertain when there will be resources for it given a pending audit into flood mitigation after the summer’s record-setting deluge. It also isn’t yet clear how the provincial audit will deal with federally regulated pipelines that run through Alberta.

“We will be looking at pipeline safety in the foreseeable future,” Nishikaze said. “We’re prepared to take a look at it, but we can’t say when.”

“Today is a great day that shows the power that comes when land owners, First Nations and environmentalists work together. We are very pleased that the Auditor General has seen the shortcoming of the Alberta government’s review and will undertake a more comprehensive study of Alberta’s pipeline problems,” said Don Bester of the Alberta Surface Rights Group. His group, along with Greenpeace and the Athabasca Chipewyan First Nation had been calling for a review since June 2012.

“We’ve always said that Albertans deserve a real pipeline safety review and we offer our assistance in helping the Auditor General get to the bottom of this mess.”

Minister Hughes said he welcomes the review.

“To help ensure that what w’ere doing and what the regulator is doing is meeting the high expectations that Albertans have,” he said. “In my experience, I have found any reports from the Auditor-General of Alberta to be very helpful … and I would expect the same here.”

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Watch: Joe Oliver on pipeline safety

In May, a Global News investigation revealed that both provincial and federal pipeline regulators rely on industry to self-report. Even as more kilometers of pipe are added annually, government statistics indicate, the number of annual inspections has gone down.

According to data obtained by Global News there have been, on average, two spills a day from the province’s pipelines and two spills of crude oil a day from all sources (including wells) over the past 38 years. These figures exclude all pipelines that cross provincial or state borders: Those are Ottawa’s purview.

In 2011, a federal audit castigated the National Energy Board for failing to enforce its own rules; the Alberta Energy Regulator has been accused of the same. Its newly minted CEO says “the system is working.”

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Alberta’s energy industry has come increasingly under the microscope as companies push to expand.

“We’re trying to export our materials and we’re coming under some some scrutiny internationally,” Hale said.

“We’ve seen some unfortunate incidents with pipelines not too long ago. And it doesn’t look good on our industry, it doesn’t look good on the province as a whole. And this would restore that confidence.”

Updated at 5:20 p.m. Eastern time with comments from advocacy groups.

Updated at 10:50 p.m. ET with comments from Rachel Notley and Ken Hughes

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