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Administrative Monetary Penalty – Plains Midstream Canada ULC (PMC) – AMP-001-2019

Administrative Monetary Penalty – Plains Midstream Canada ULC (PMC) – AMP-001-2019 [PDF 3519 KB]

NOTICE OF VIOLATION

REFERENCE NUMBER: AMP-001-2019

Information for Pipeline Company / Third Party / Individual:

Information for Pipeline Company / Third Party / Individual
Name: Plains Midstream Canada ULC (PMC)
Contact: Jason Balasch
Title: President
Address: Suite 1400, 607 Eighth Avenue S.W.
City: Calgary
Province / State: Alberta,  T2P 0A7
Telephone: Information not available
Fax: Information not available
E-mail: Information not available

TOTAL PENALTY AMOUNT:

$88,000

Date of Notice:

30 January, 2019

Regulatory Instrument #:

AO-006-GC-19

On 2017-05-05 Plains Midstream Canada ULC (PMC) was observed to be in violation of a NEB regulatory requirement. This violation is subject to an administrative monetary penalty, as outlined below.

1. VIOLATION DETAILS

Date of Violation:
(from): May 5, 2017 (to): May 5, 2017
Total Number of Days: 1

Has compliance been achieved?

 X Yes

     No

If no, a subsequent NoV may be issued.

Location of Violation:

e.g. Facility/plant/head office or nearest geographical point
PTC Mainline at SW-28-16-20-W2M ("Section 28")

Short Form Description of Violation (Refer to Schedule 1 of the AMP Regulations)

Provision and Short-form Description

NEB Pipeline Damage Prevention Regulations – Obligations of Pipeline Companies

6(l)(b) Failure to mark location of a pipe as prescribed (Type B)
     

Contravention of an Order or Decision made under the Act (ss. 2(2) of the AMP Regulations)

     

Failure to comply with a term or condition of any certificate, licence, permit, leave or exemption granted under the Act (ss. 2(3) of the AMP Regulations)

2. RELEVANT FACTS

Briefly describe reasonable grounds to believe a violation has occurred

The following is a summary. For complete details, please see attached Investigator's Report dated December 12, 2018.

Plains Midstream Canada ULC (PMC) owns and operates the PTC Mainline pursuant to Certificate of Public Convenience and Necessity GC-19 and Order AO-006-GC-19 (Tab A). The PTC Mainline is a 168 mm OD by 4.8 mm WT pipeline that originates at PMC's Empress 6 facility in Alberta and terminates at their Fort Whyte facility in Manitoba. The PTC Mainline was put into service in 1964.

On April 7, 2017, April 13, 2017, and April 25, 2017, Forbes Brothers Ltd. (Forbes), a contractor working for SaskPower, placed identically worded requests to Sask 1ST Call to have the “entire SaskPower [right of way] locate for the first 3 transmission line structures east and west of the road... including any road crossings... crossing X-9.” The Sask 1st Call system maintains records of underground utilities and assigns tickets to utility companies based on its knowledge of the location of utilities. Based on this information, Sask 1st Call assigned these tickets to the companies who had underground utilities in this area, including PMC. The requested area covered Sections 28 (SW-28-16-20-W2M) and 29 (SE-29-16-20-W2) near Pinkie Road in the City of Regina.

Section 6 of the National Energy Board Pipeline Damage Prevention Regulations-Obligations of Pipeline Companies, SOR/2016-133(DPR–O) sets out the obligations of pipeline companies following requests to locate:

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,

  1. (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;
  2. (b) mark the location of its pipes in the vicinity of the proposed facility or the prescribed area at maximum intervals of 10 m along each pipe using markings that are clearly visible and distinct from any other markings that may be in the vicinity of the proposed facility or the prescribed area; and
  3. (c) provide information to the person that clearly explains the significance of the markings.

(2) The markings must be consistent with the standards for locating a pipeline that are set out in the pipeline company’s damage prevention program.

On or around April 25, 2017, April 26, 2017, and May 4, 2017, PMC failed to mark the location of its pipeline in the vicinity of the proposed facility, contrary to sub-section 6(1)(b) of the DPR–O, by providing Forbes with final markings that were incorrect and that lead Forbes to believe that it was safe and clear to complete its proposed excavation work. Specifically, PMC’s locator Information not available cleared PMC’s request in his email to Information not available of Forbes on April 25, 2017, entered notes into Utilisphere (PMC’s tracking system for one-call tickets) stating that the work area was staked and marked, and in person verbally to Forbes staff on May 4, 2017.

On May 5, 2017, relying on PMC’s incorrect markings, Forbes struck the PTC Mainline in section 28, resulting in a loss of primary containment (i.e. punctured the line) and release of product (propane). This incident was reported by PMC on May 6, 2017 via the NEB's Event Reporting System under file INC2017-060.

Upon review of all the evidence provided in the investigation of this incident, I agree with the conclusions drawn by the NEB Investigator and share the view that the version of events provided by Forbes Brothers Ltd. is more likely. On that basis I have reasonable grounds to believe that the violation of section 6 of the DPR–O has occurred.

3. PENALTY CALCULATION

(a) BASELINE PENALTY (Gravity Value = 0)

(a) BASELINE PENALTY (Gravity Value = 0)
Category Individual Any Other Person
(Type A)       $1,365       $5,025
(Type B)       $10,000  X  $40,000

[Refer to AMP Regulations, Subsection 4(1)]

(b) APPLICABLE GRAVITY VALUE

[Refer to AMP Regulations, Subsection 4(2)]

(b) APPLICABLE GRAVITY VALUE
Mitigating Aggravating
-2 -1 0 +1 +2 +3
 X  Other violations in previous seven (7) years -- --        X        --
PMC received a Notice of Violation in February 2015, AMP-003-2015, for failure to conduct inspections and audits as prescribed by ss. 53(1) of the Onshore Pipeline Regulations (OPR)
 X  Any competitive or economic benefit from violation -- --  X              --
N/A
 X  Reasonable efforts to mitigate / reverse violation’s effect              X              --
N/A
 X  Negligence on part of person who committed violation -- --        X        --
-The PMC locator relied on assumptions for the location of the pipeline without verifying the information with PMC maps or the map shown to him by Forbes.
-The PMC locator did not complete the locate using mechanical means by tying onto the pipelines from both ends of the section. As per PMC’s report, this practice is recommended by PMC’s line locator training.
 X  Reasonable assistance to Board with respect to violation                    X        --
-When the NEB Investigator met with PMC staff on May  15, 2017 in Regina SK, PMC staff were not cooperating with the NEB investigation by leaving out pertinent facts and providing false information. This is despite the fact that the NEB had provided advanced warning to PMC that NEB staff would be attending their offices to conduct compliance verification activities in order to determine the cause of the May 5, 2017 line strike.
1) PMC advised the investigator that the Forbes employees involved in the incident were from Manitoba and had gone home, and therefore would be unavailable for interviews during the investigator's time in Regina. In fact the Forbes staff were all from Saskatchewan and reported to work as per usual the Monday following the Friday line strike.
2) PMC management did not offer the name, role, or level of involvement of their locator, Information not available. Upon investigating this incident it is clear that Information not available played a vital role in the factors that led to this incident.
3) PMC management advised the investigator that Forbes had not made any locate requests for Section 28, which was not the case. Forbes had made three requests to locate Section 28, and PMC's Utilisphere system confirmed this.
 X  Promptly reported violation to Board              X              --
The incident was required to be reported under the OPR.
 X  Steps taken to prevent reoccurrence of violation        X                    --
PMC investigated the incident and issued a report on August 31, 2017 containing recommendations to improve their practices vis-a-vis locating pipelines.
 X  Violation was primarily reporting / record-keeping failure              X  -- -- --
N/A
 X  Any aggravating factors in relation to risk of harm to people or environment -- --              X       
-Given that the excavation occurred directly in the path of an operational pipeline, there was a high probability of harm to people or the environment and high severity of harm.
-The probability of harm was high due to the negligent locating practices undertaken by the PMC line locator. He relied upon incorrect assumptions, did not take any steps to verify available drawings that contradicted his assumptions, and, according to PMC’s report, did not locate the pipeline using mechanical means as recommended by the line locator training previously undertaken by the locator.
-The severity of harm was high as the line strike led to the release of propane immediately adjacent to a motorized running vehicle (auger) and four persons were in the immediate vicinity of the incident. They had to run to safety. This event could have led to fatalities and/or serious injuries.

(c) TOTAL GRAVITY VALUE

+4

(d) DAILY PENALTY
(The baseline penalty, adjusted for the final gravity level)

$88,000.00

(e) NUMBER OF DAYS OF VIOLATION
(If more than one day, then the justification must be provided.)

1

Notes to explain decision to apply multiple daily penalties, or "Not Applicable"
Not applicable

4. TOTAL PENALTY AMOUNT

$88,000

Note: The total penalty amount shown is based on the period described in Step 1 above. If compliance has not been achieved, a subsequent Notice of Violation may be issued.

5. DUE DATE

(30 days from receipt of Notice of Violation)

04 March, 2019

Notes

You have the right to make a request for a review of the amount of the penalty or the facts of the violation, or both, within 30 days after the Notice of Violation was received.

If you do not pay the penalty nor request a review within the prescribed period, you are considered to have committed the violation and you are liable for the penalty set out in the Notice of Violation. The penalty is due on the date indicated above.

The unpaid penalty amount is a debt due to the Crown and may be recovered by collection procedures stipulated in the Financial Administration Act.

The information regarding the violation may be posted on the NEB website:

  1. 30 days from the date this Notice of Violation was received or;
  2. upon issuing a decision following a Request for Review.

To Make Payment:

You may remit your fee payment by Electronic Funds Transfer (EFT) or by cheque payable to the order of Receiver General for Canada.

EFT payments can be arranged by contacting the Director of Financial Services, Monday to Friday, from 09:00 to 16:00 Mountain Time:

  • Telephone: 403-919-4743 / 800-899-1265
  • Fax: 403-292-5503 / 877-288-8803

Cheques should be made out to the "Receiver General for Canada" and mailed to:

  • National Energy Board
    Attention: Finance
    Centre 10, 517 – 10th Avenue SW
    Calgary, Alberta
    T2R 0A8

Your completed Payment form should be enclosed with your payment.

To Request a Review

Pursuant to the NEB Act, Section 144, you may file a request for a review of this Notice of Violation by the Board.

The date of filing is the date on which the document is received, as indicated by the date on an e-mail submission or the stamped on the document by a NEB employee.

If you elect to make a request for a review, complete and submit the attached Request for Review form to:

  • Administrative Monetary Penalty – Reviews
    National Energy Board
    Centre 10, 517 – 10th Avenue SW
    Calgary, Alberta
    T2R 0A8

For more information on reviews, please see the Administrative Monetary Penalties Process Guide available on the NEB's website.

Sincerely,

Information not available
Robert Steedman

Designated Officer
Administrative Monetary Penalties

Information not available

Date modified: