One Phone Call Wins Kinder Morgan a Six-Month Extension on Emergency Safety Order
It just took one phone call for Kinder Morgan to get a six-month extension on an emergency safety order from the National Energy Board, instructing the Texas-based company to track potentially defective parts on operating pipelines.
The extension “allowed Kinder Morgan to avoid negative publicity about its safety record in the sensitive period leading up to the NEB’s May 2016 announcement recommending the federal government approve the company’s plan to expand [its] Trans Mountain [pipeline], which runs from Alberta to the west coast,” the National Observer reports.
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The NEB “had issued the order in February because its engineers believed there was a risk of failures on a number of pipelines,” the National Observer notes. The Board’s in-house engineers had flagged the problem in an internal memo on December 17, 2015.
“Over a number of years, there have been multiple instances of pipe and components found to have substandard material properties on pipeline systems in Canada and the U.S.,” they wrote. “In some cases, these pipeline systems have had failures at the pressure test stage or while operating…The failures and expansions of pipe and fittings is a concerning development.”
The NEB didn’t take action until February 5. Then, as the late March compliance deadline loomed, a Kinder Morgan official called an NEB contact who’d previously asked him for a favour and obtained a six-month “walk around” on the order.
“I received a call from Kinder Canada,” technical specialist Doug Ochitwa wrote in a March 30 email to five colleagues. “They will be seeking a 6 month variance.”
In a detailed exposé, the Observer documents a series of gaps in the NEB’s handling of the Kinder Morgan order and other pipeline files, based on “a large trove of the NEB’s internal emails, memos, and text messages” obtained by investigative reporter and managing editor Mike De Souza. The collection included a possible conflict of interest concern with Ochitwa, who had previously asked Kinder to “help me possibly help Kinder Morgan” by hiring a former TransCanada Pipeline employee and whistleblower who had approached the NEB for a job as a pipeline inspector.
Another series of emails traces back to the investigation into Canadoil Asia, the now-bankrupt manufacturer whose pipeline fittings had triggered the emergency safety order. The missives came from a representative of Canadoil Group, a restructured company that is still producing pipeline components.
“We have been approached by a number of distributors and pipeline companies regarding the NEB order,” a Canadoil representative wrote to NEB engineer Susan Bouzane. “Everyone is racing to meet the NEB deadline, but folks are indicating that the task is being greatly complicated by the request to identify ‘any fitting’ manufactured by Canadoil Asia.”
The Canadoil rep “asked the NEB to eliminate an entire category of fittings from its safety order,” De Souza reports. “Bouzane rejected that request, but invited the manufacturer to encourage its customers to ask for extensions on the deadline.”