Canada regulator to audit Enbridge safety procedures

Wed Aug 1, 2012 6:17pm EDT

* Control room audits planned in coming months

* NEB studying U.S. report into 2010 Michigan spill

By Jeffrey Jones

CALGARY, Alberta, Aug 1 (Reuters) - Canada's National Energy Board plans to subject Enbridge Inc to a series of safety audits in the coming months to make sure its pipeline control-room procedures, assailed last month by U.S. regulators, are up to acceptable standards, the board's chairman said on Wednesday.

In an open letter on the National Energy Board website, Chairman Gaetan Caron said Canada's main oil and gas regulator has reviewed the synopsis of the U.S. National Transportation Safety Board's report on Enbridge's 2010 oil spill in Michigan, the most damaging of several in recent years.

NTSB chairwoman Deborah Hersman chastised the company, whose pipelines move the bulk of Canadian oil exports to the United States, comparing the actions of employees in the hours following the breach of Line 6B to the "Keystone Kops," leading to oil flowing into the Kalamazoo river system for 17 hours.

"A thorough review of the final report will be conducted in order to identify all lessons that may be applied to pipelines and companies under the board's jurisdiction, however even prior to the release of the final report, we have been reviewing Enbridge's management practices," Caron wrote in the letter posted on Wednesday.

"In the next weeks and months, we will be conducting safety audits to review and confirm that improvements, particularly to their control room practices in Edmonton, are satisfactory."

Enbridge is under fire again from U.S. regulators following the rupture of another Midwest pipeline, Line 14, on Friday. It leaked about 1,000 barrels of oil in rural Wisconsin.

On Tuesday, the U.S. government's pipeline safety regulator blocked the company from restarting the 318,000 barrel a day line, demanding corrective actions and evidence that it can safely run the pipeline.

U.S. Transportation Secretary Ray LaHood called the incident "absolutely unacceptable."

Highly publicized ruptures and oil spills come as the company seeks approval for plans to vastly expand its system, with the contentious C$6 billion ($6 billion) Northern Gateway pipeline to Canada's West Coast from Alberta and new routes to Eastern Canada, which would require increased capacity in the U.S. Midwest.

Caron said, given recent pipeline incidents, Canadians must know that the NEB holds companies accountable for public safety and environmental protection. It takes "swift and appropriate action" when pipeline operators fail to meet standards.

The board conducts inspections, compliance meetings, emergency exercises, audits and investigations on all the companies it regulates, he said.

"In the specific case of Enbridge, in recent years the NEB has conducted approximately 25 compliance verification activities per year, focusing on every aspect of their management system," Caron said. "In addition, the NEB imposed two precautionary pressure restrictions on Enbridge pipelines, one in 2010 and another in 2011, which remain in effect."

He also pointed out that recently enacted federal legislation gives the NEB the power to impose maximum penalties of C$25,000 a day for each violation on individuals and C$100,000 a day on companies.

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