Province not effectively monitoring pipelines: auditor
Ministry needs to ensure companies comply with safety protocols: Ferguson
Despite Premier Brad Wall’s insistence that pipeline regulation is “very, very important,” Saskatchewan’s auditor is not convinced the provincial government is doing enough to make sure thousands of kilometres of pipelines running through the province are safe.
Five years after being handed seven recommendations aimed at bringing it into compliance with the laws governing pipelines, the Ministry of the Economy has fully implemented just four of them, Judy Ferguson concluded in a new report published Tuesday.
“Right now, we actually don’t think that they’re effectively monitoring oil and gas pipelines,” Ferguson said in an interview. “At the point in time that we did this work, which was just in March, we don’t think they’re doing enough. They’ve got work to do.”
Ferguson’s report comes almost a year after a Husky Energy Inc. pipeline spilled oil near and into the North Saskatchewan River and six months after a Tundra Energy Marketing Ltd. pipeline spilled a smaller amount on a First Nation east of Regina.
Legislation introduced in response to the Husky spill — which continues to concern First Nations and other downstream communities — is better than what was in place, but the ministry needs to continue making improvements, Ferguson said.
Two of the original seven recommendations had been implemented when Ferguson followed up in 2014. As of March 31, 2017, two of the remaining five had been fully implemented and three more were partially implemented, Ferguson’s report concluded.
Four of the five recommendations still to be implemented deal specifically with the administrative aspects of regulation: licensing, establishing guidelines for ministry staff and changing laws to make operators responsible for cleanup efforts.
The government also had not made progress toward monitoring pipeline operators’ compliance with safety protocols and had collected only about half of the “compliance declaration forms” for the province’s 2,200 licensed pipelines, the report stated.
“What we’re seeing ... really frankly, is the need to get on to actually regulating as opposed to the administrative aspect of (regulation),” Ferguson said.
The delays — which the auditor described as unusually long — are concerning to the Opposition Saskatchewan NDP, which has long advocated for an industry-funded pipeline regulator patterned on the Alberta Energy Regulator, which that province’s auditor has praised. If the government is not willing to establish an independent pipeline watchdog, it should at least transfer responsibility for regulation to the Ministry of Environment from the Ministry of Economy, NDP environment critic Cathy Sproule said.
“If we’re going to be a resource economy, we have to manage it properly. I think that was the whole purpose of the 2012 review by the auditor. This is a ministry, I think, that just hasn’t received the attention on the regulatory side that is necessary.”
The government insists it has made “substantial” progress on the recommendations, and that legislation passed after the Husky spill plus $1.4 million for new inspectors and a “regulation enhancement program” in the 201718 budget should help.
Wall told reporters Tuesday that while he had not yet read the auditor’s report, the province is “making … improvements,” especially where pipeline river crossings are concerned. He deferred further comment to Ministry of the Economy officials.
Ministry of the Economy spokesman Doug MacKnight said flagging confidence in the government’s ability to effectively regulate pipelines is “obviously a concern.” He could not say, however, when all seven recommendations will be fully implemented.
“There is no fixed timeline. It’s going to require work, and sustained work, because it’s driven off risk, and … our understanding of risk is going to evolve. The stuff, though, that is critical and foundational, we’re going to put in place.”
Ferguson said she is a “a little bit disappointed” in the government’s response. While it’s impossible to know if stronger regulations would have prevented the Husky spill, its reverberating effects show that the work needs to be done, she said.
“If there isn’t sufficient regulation, that increases the risks of leaks, that increases the risks of events happening in that area. Unfortunately, I think that’s what we’re seeing here.”