NEB Clarifies Financial Filing Requirements
May 24, 2014 § Leave a comment
On May 22, 2014, the National Energy Board (NEB) of Canada issued a letter outlining next steps in developing financial filing requirements for all NEB-authorized activities and regions covered by the Canada Oil and Gas Operations Act (COGOA). Draft guidance was released for public review in May 2013, with a comment period that closed October 31, 2013. The letter outlines NEB’s intent to invite interested persons to provide specific comment on a draft risk matrix in the fall 2014. The draft risk matrix will set out prescribed Financial Resources and Financial Responsibility requirements for operations based on level of risk. The Board does not anticipate releasing a draft of its Financial Filing Requirements for comment, until after Parliament has considered Bill C-22.
In the interim, the Board advised Applicants to demonstrate Financial Responsibility for spills and debris pursuant to section 27 of COGOA for consideration on a case-by-case basis.
BSEE and Coast Guard Safety Alert
May 24, 2014 § Leave a comment
On May 20, 2014, The Bureau of Safety and Environmental Enforcement (BSEE) and U.S. Coast Guard issued a joint Safety Alert strongly recommending that leaseholders/operators consider Coast Guard recommendations for dynamic positioning vessels when evaluating potential hazards and establishing and implementing contractor safe work practices in their SEMS program. 
The Safety Alert was issued in response to an incident where an equipment failure, an operational error and multiple failure modes not identified in a vessel’s Failure Modes and Effects Analysis combined resulting in loss of position. The crew performed an emergency disconnect from the well avoiding injury and environmental impacts.
OIG Report Critical of PHMSA Oversight Signals Change
May 7, 2014 § Leave a comment
The Office of Inspector General (OIG) recently issued an Audit Report criticizing PHMSA’s oversight of state pipeline safety programs and calling for change.
In the aftermath of the 2010 San Bruno incident, the National Transportation Safety Board called for an audit of PHMSA’s policies, procedures and oversight activities applicable to states certified under PHMSA’s Natural Gas Program.
The Report found documentation of inspection intervals lacking, an absence of trending analyses of operator’s annual reports and no defensible formula for state inspector staffing or training.
OIG made recommendations in 7 areas including:
- Revision and periodic validation inspector staffing formulas.
- Improvement of State Program Guidelines minimum training requirements, tracking of distribution of revised inspection forms, and standards for inspection intervals.
- Review of the adequacy of inspection procedures as part of the annual program evaluation.
- New PHMSA guidance drafted to ensure states employ risk analysis methods for scheduling inspections.
- Procedures documented for conducting triennial grant reviews.
- Improvements in training of PHMSA evaluators to effectively determine whether states have complied with all program evaluation requirements, issue notices of non-compliance, and ensure corrective action is taken.
- Audit states’ use of suspension funds.
Intrastate pipeline operators should expect heightened scrutiny, increased inspections and stricter interpretation of regulations in light of this report.
Line of Sight: Pipeline Law Alerts and Analysis 