Compliance Verification Activity Report: CV2021-328 - Husky Oil Operations Limited

Overview

Compliance verification activity type: Field Inspection

Team:

• Inspector 2391

Regulated company: Husky Oil Operations Limited

Operating company: Husky Oil Operations Limited

Province(s) / Territory(s):

• Alberta

Discipline(s):

• Damage Prevention

Rationale and scope:

Verify compliance to the Onshore Pipeline Regulations (OPR) and CER Damage Prevention Regulations - Obligations of Pipeline Companies (DPR-Obligations) with a focus on third party oversight procedures.

Compliance tool(s) used:

• Information Request (IR) (1)
• Notice of Non-compliance (NNC) (2)

Facility details

Facilities:

• Border Pipeline System-Light crude line
• Border Pipeline System-Diluent recycle line
• Border Pipeline System-heavy crude line
• Border Pipeline System-refinery by-product line

Facility Types

• Pipeline
• Pipeline
• Pipeline right of way (ROW)

Life-cycle Phases

• Operations

Regulatory requirements

Regulatory requirements that apply to this activity:

• Canadian Energy Regulator Act (CERA)
• Canadian Energy Regulator Act (CERA)
• Canadian Energy Regulator Pipeline Damage Prevention Regulations – Authorizations
• Canadian Energy Regulator Pipeline Damage Prevention Regulations – Obligations of Pipeline Companies
• National Energy Board Act (NEBA)
• Onshore Pipeline Regulations (OPR)
• Plans And Procedures
• Standard Operating Procedure or Plan (SOP)
• Corporate Ground Disturbance Damage Prevention Procedure
• Standards
• CSA Z662-19 - Oil and Gas Pipeline Systems

Observations (no outstanding follow-up required)

Observation 1 - Part 1 Document Review - General Observations

Date & time of visit: 2021-05-06 12:00

Discipline: Damage Prevention

Categories:

• Monitoring and Reporting
• Patrols, Inspection and Field Observations
• Reporting
• Damage Prevention Program
• Manage and Mitigate
• Vehicle or Mobile Equipment Crossings
• Guidelines
• Authorization and Consent
• Temporary Crossings
• Locates and Information
• Locate Requests
• One-call Centre
• Ground Disturbance
• Authorization and Consent
• Guidelines
• Facility
• Authorization and Consent
• Existing Facilities
• Guidelines
• Pipeline Identification
• Locate Markings

Facility:

• Border Pipeline System-Light crude line (Pipeline)

Observations:

Part 1 of this CVA consisted of documentation to be reviewed by CER Inspection Officers (IOs). Husky submitted various documents as well as additional responses and clarifications in a separate document:

• IOs reviewed the executed crossing agreements for planned ground disturbances within the prescribed area of Husky's pipelines near Lloydminster. 
• Patrol reports dated 25 Jan 2021 and 3 Feb 2021 were reviewed. Not reporting by exceptions.
• Husky indicated that aerial patrols are conducted by a contractor every 2 weeks (weather permitting).
• The Husky Ground Disturbance Damage Prevention Procedure contained information pertaining to backfill inspections as well as the necessary inspections associated with ground disturbance work.
• ​Pipeline identification was covered in the documentation, including the placement of signage.​
• Signage inspection and maintenance were briefly covered in the documentation provided.
• Husky indicated that it does not do any of the line locating work in-house and uses third-party line locating companies for all ground disturbance work on the CER-regulated pipelines.
• References to the NEB or National Energy Board were found in the Husky Ground Disturbance Damage Prevention Document. IOs recommended that these references be updated.

Compliance tool used: No compliance tool used

Observation 2 - Part 2 Virtual Meeting and Presentation - General Observations

Date & time of visit: 2021-07-06 13:00

Discipline: Damage Prevention

Categories:

• Damage Prevention Program
• Monitoring
• Processes and Standards
• Public Awareness Program
• Manage and Mitigate
• Monitoring and Reporting
• Records
• Patrols, Inspection and Field Observations
• Reporting
• Pipeline Identification
• Signs
• Watercourses
• Railway and Road RoW
• Locate Markings
• Vehicle or Mobile Equipment Crossings
• Guidelines
• Agricultural Activity
• Authorization and Consent
• Locates and Information
• Locate Requests
• Duty to Inform
• One-call Centre
• Obligation to Provide Information
• Ground Disturbance
• Authorization and Consent
• Guidelines
• Facility
• Authorization and Consent
• Existing Facilities
• Guidelines

Facility:

• Border Pipeline System-Light crude line (Pipeline)

Observations:

A meeting (virtual) was held with Husky/Cenovus representatives on 6 July 2021 as Part 2 of the CVA in lieu of the planned field component given that there were no third party activities to observe near Husky’s pipelines during the past fiscal year. 

The following Damage Prevention Program requirements were discussed in order to inform Husky of the CER expectations, provide guidance and identify possible areas for improvements (presentation attached):

• CER OPR section 47.2 (Damage Prevention Program);
• CER DPR - Obligations section 6 (Obligations Following Request to Locate);
• CER DPR - Obligations section 7 (Obligations Respecting Certain Locations);
• CER DPR - Obligations section 11 (Obligations to Report);
• CER DPR - Obligations section 12 (Records); and
• CER DPR - Obligations section 16 (Damage Prevention Program - Minimum Content). 

• Linkages or interconnections between the company’s activities and its Damage Prevention Program (DPP) could be improved: The DPP as required pursuant to section 47.2 of the OPR must be documented and meet the definition of "program" as available in the OPR guidance notes (see definition below). The CER has applied the following interpretation of the OPR for evaluating compliance of programs required by the regulations.
  • Program: A documented set of processes and procedures designed to regularly accomplish a result as well as information outlining how plans, processes and procedures are linked; in other words, how each one contributes to the result. A company regularly plans and evaluates its program to check that the program is achieving the intended results. The program must include details on the activities to be completed including what, where, by whom, when, and how. The program must also include the resources required to complete the activities.
• The monitoring of the pipeline RoW could be improved: To comply with section 7 of the DPR-Obligations, Husky is required to monitor areas along its RoW where the operation of vehicles and mobile equipment for agricultural activities (e.g., cultivation) could impair the pipeline’s safety or security. This may require depth of cover surveys to be conducted in areas subject to agricultural activities.

Compliance tool used: No compliance tool used

Observation 3 - IR#1 - Technical Guidelines - Section 15 of the DPR-Obligations

Discipline: Damage Prevention

Categories:

• Vehicle or Mobile Equipment Crossings
• Guidelines
• Ground Disturbance
• Guidelines
• Facility
• Guidelines

Facility:

• Border Pipeline System-Light crude line (Pipeline)

Observations:

In response to the initial Information Request, Husky briefly detailed its guidelines that third parties (e.g., contractors) must follow when sending requests for written consent referred to in paragraph 7(1)(a) or 10(1)(a) of the CER DPR-Authorizations. However, a documented copy was not provided and it was not indicated how Husky makes those guidelines public.

Additional information is required at this time.

Compliance tool used: Information Request (IR)

Regulatory requirement:

• Canadian Energy Regulator Pipeline Damage Prevention Regulations – Obligations of Pipeline Companies

Relevant section(s):

• Section 15 Guidelines - Requests for consent 15 Every pipeline company must develop and maintain detailed guidelines setting out the technical and other information to be included in the requests for the written consent referred to in paragraph 7(1)(a) or 10(1)(a) of the Canadian Energy Regulator Pipeline Damage Prevention Regulations – Authorizations and must make those guidelines public.

Company action required:

The following is requested:

• a copy of Husky's technical guidelines developed and maintained in accordance with section 15 of the DPR-Obligations; and
• briefly explain how Husky makes those guidelines public.

Due date: 2021-06-28

Date closed: 2021-07-05
Note: the date closed is the date that the inspector completed their review of the company corrective actions for adequacy and determined that no further actions are required.

Reason closed: Requirement met

Compliance achieved: Yes

Observation 4 - Obligations Following a Request to Locate - Section 6 of DPR-Obligations

Date & time of visit: 2021-07-06 15:00

Discipline: Damage Prevention

Categories:

• Locates and Information
• Locate Requests
• Pipeline Identification
• Locate Markings

Facility:

• Border Pipeline System-Light crude line (Pipeline)

Observations:

IOs reviewed the Husky Energy Line Locator Scope of Work and Husky Ground Disturbance Damage Prevention Procedure (GDDP). Husky indicated that it uses third party contractor for all ground disturbance work on the CER-regulated pipelines. The documentation reviewed addressed the requirements for marking the pipes' location as per DPR-Obligations s.6(1)(b) and to provide line locating information as per DPR-Obligations s.6(1)(c).

The documentation submitted for review did not provide information pertaining to the written "safety practices to be followed" and that are to be provided following a locate request to the person that intends to undertake facility construction or ground disturbance in order to inform them on how to safely carry out the work in the vicinity of the pipe (pursuant to paragraph 6(1)(a) of the DPR-Obligations).

Information Requests were sent to Husky/Cenovus and responses were reviewed by IOs. This regulatory requirement was also discussed during a meeting on 6 July 2021. IOs explained that for written safety practices to meet the intent of the regulations, it is expected that they be provided following a locate request and be associated with the locate information provided on the field. Such practices are to be applied on the field by the person(s) performing the work to ensure their safety and prevent damage, and as such should be site-specific and appropriate for the audience (e.g., contractor, landowner). 

The IOs noted the following deficiency:

• Communication of written safety practices by way of conditions and general requirements in the crossing agreement as described by Husky/Cenovus did not meet the requirement of paragraph 6(1)(a) of the DPR-Obligations. Husky/Cenovus was also not able to produce supporting documentation (e.g., safe work permit) to demonstrate compliance in the course of this CVA.

Compliance tool used: Notice of Non-compliance (NNC)

Regulatory requirement:

• Canadian Energy Regulator Pipeline Damage Prevention Regulations – Obligations of Pipeline Companies

Relevant section(s):

• Section 6 - Obligations Following a Request to Locate Timeline 6 (1) Subject to subsection (2), if a pipeline company receives a request to locate its pipes from a person that intends to construct a facility across, on, along or under a pipeline or engage in an activity that would cause a ground disturbance within the prescribed area, the pipeline company must, within three working days after the day on which the request is made, or any longer period agreed to by the pipeline company and that person, (a) inform the person, in writing, of safety practices to be followed while working in the vicinity of its pipes and, in case of a ground disturbance, within the prescribed area;

Company action required:

IR#2a

The following is requested:

• Briefly explained how Husky complies with s. 6(1)(a) of the DPR-Obligations. 
• Provide information about the Responsible role for this task (e.g., ground disturbance supervisor) and their responsibilities.
• If a record of written safety practices used for a previous activity is available, provide a copy. 
• If a template is used, provide a copy.
• If relevant information was available in the documentation already provided, please provide the document title and page number that applies.

• A description of the steps taken by the Husky after the pipeline company receives a locate request from a person (e.g., third party contractor or landowner) to inform them in writing of the safety practices to be followed when working in the vicinity of Husky's pipeline.
• If a record of written safety practices used for a previous construction or ground disturbance activity is available (e.g., work permit), provide a copy. 
• If a template is used, provide a copy.

• Husky/Cenovus to provide the results of its engagement with its current third party vendor in improving the current documents provided subsequent to a line locate request on all CER-regulated pipelines to ensure compliance with paragraph 6(1)(a) if the DPR-Obligations. 

Due date: 2021-09-15

Date closed: 2021-10-04
Note: the date closed is the date that the inspector completed their review of the company corrective actions for adequacy and determined that no further actions are required.

Reason closed: Requirement met

Compliance achieved: Yes

Observation 5 - Obligation to Report - Section 11 of the DPR-Obligations

Date & time of visit: 2021-07-06 15:00

Discipline: Damage Prevention

Categories:

• Monitoring and Reporting
• Reporting

Facility:

• Border Pipeline System-Light crude line (Pipeline)

Observations:

Husky submitted its Ground Disturbance Damage Prevention Procedure for review by the IOs. This document contained information pertaining to the reporting requirements specified in section 11 of the DPR-Obligations by referencing the requirements as per the excerpt below:

Non-immediate notifications to the NEB using the OERS specific to ground disturbance events are:
  • unauthorized activities under the NEB Act and Pipeline Damage Prevention Regulations – Authorizations (DPR-A);
  • pipeline damage and consent suspensions under the Pipeline Damage Prevention Regulations – Obligations of Pipeline Companies (DPR-O). 

The reporting requirements pursuant to section 11 of the DPR-Obligations were further discussed during a meeting with Husky/Cenovus representatives on 6 July 2021, where they indicated that the company has procedures for the reporting of incidents and referenced other company documents that apply. However, it was unclear how the procedures applied to the reporting of DPR-A contraventions (contravention events) related to facility construction or the operation of vehicle or mobile equipment across the RoW (not only specific to ground disturbances). The linkages between the patrols conducted by the company and the reporting of unauthorized activities or contraventions events discovered was also not evident.

An Information Request was sent to Husky/Cenovus and responses were reviewed by IOs. Husky/Cenovus has specified that page 37 of the Corporate Ground Disturbance Damage Prevention Procedure (GDDP) explains the reporting required under section 11 of the DPR-Obligations. 

Upon review of the documentation and consideration of the information provided, the following deficiencies were noted by the IOs:

• The GDDP only covered contravention events specific to ground disturbance events and Husky/Cenovus did not demonstrate that it has a process or procedure for the reporting of any types of contravention events, not only the reporting of contravention events related to ground disturbances.   
• The excerpt stating "unauthorized activities under the NEB Act and Pipeline Damage Prevention Regulations – Authorizations (DPR-A)" is not sufficient to demonstrate that the procedure applies to contravention events related to vehicle crossings and facility construction that may be discovered during patrols or other operational tasks.
• The linkages between RoW patrols that are conducted as outlined in the Corporate Pipeline Operations Maintenance Manual (POMM) and the reporting of contraventions events was not evident. Husky/Cenovus indicated that it has a corrective action process for issues identified during surveillance activities. However, the IOs were if the view that the reference or linkage was not explicit and done with an overall intent or purpose, and was not is easily identifiable in the company’s documentation.

• construction of a facility in the vicinity of the pipe without consent of the pipeline company or Commission authorization;
• an activity causing a ground disturbance in the prescribed area without consent of the pipeline company or Commission authorization;
• crossing the pipeline with a vehicle or mobile equipment without the consent of the pipeline or without meeting the requirements in section 13 of the DPR – Authorizations;
• work has been done in a manner that does not comply with the measures outlined in the DPR – Authorizations;
• work has been done in a manner that does not comply with the conditions of the pipeline company’s written consent; and
• work has continued when consent has been suspended.

A notice of non-compliance was issued.

Compliance tool used: Notice of Non-compliance (NNC)

Regulatory requirement:

• Canadian Energy Regulator Pipeline Damage Prevention Regulations – Obligations of Pipeline Companies

Relevant section(s):

• Obligation to Report - Report to Regulator 11 (1) The pipeline company must immediately report to the Regulator (a) every contravention of the Canadian Energy Regulator Pipeline Damage Prevention Regulations – Authorizations; (b) 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; and (c) any activity related to the construction of a facility across, on, along or under a pipeline, an activity that caused a ground disturbance within the prescribed area or the operation of vehicles or mobile equipment across a pipeline that the pipeline company considers could impair the safety or security of the pipe.

Company action required:

IR#3

The following is requested:

• A description as to how Husky's current reporting procedures apply to the reporting of contraventions of the DPR-Authorizations (contravention events) related to facility construction and the operation of vehicle or mobile equipment across the RoW; 
• A description as to how patrols conducted by the company are linked with the reporting of any contraventions events following their discovery.

• Husky/Cenovus to provide a corrective action plan to demonstrate how the company will address the deficiencies noted in this observation.

Due date: 2021-09-15

Date closed: 2021-10-04
Note: the date closed is the date that the inspector completed their review of the company corrective actions for adequacy and determined that no further actions are required.

Reason closed: Requirement met

Compliance achieved: Yes

Observations (company follow-up required)

Identified non-compliances to company plans or procedures are non-compliances either to: