THE STANDING SENATE COMMITTEE ON ENERGY, THE
ENVIRONMENT AND NATURAL RESOURCES
OTTAWA, Thursday, June 6, 2013
The Standing Senate Committee on Energy, the Environment and
Natural Resources met this day at 8 a.m. to study the current state of the
safety elements of the bulk transport of hydrocarbon products in Canada.
Senator Richard Neufeld
(Chair) in the chair.
The Chair: Welcome to this meeting of the Standing Senate
Committee on Energy, the Environment and Natural Resources. My name is Richard
Neufeld, a senator from British Columbia and chair of this committee. I would
like to welcome honourable senators, any members of the public with us in the
room and viewers all across the country who are watching on television.
I would now ask senators around the table to introduce
themselves, beginning with my deputy chair, Grant Mitchell, from Alberta.
Senator MacDonald: Senator MacDonald, Nova Scotia.
Senator Ringuette: Pierrette Ringuette, from New
Senator Massicotte: Paul Massicotte, from Montreal.
Senator Seidman: Judith Seidman, from Montreal, Quebec.
Senator Unger: Betty Unger, Alberta.
Senator Wallace: John Wallace, New Brunswick.
Senator Patterson: Dennis Patterson, Nunavut.
The Chair: Thank you. I would also like to introduce our
staff: the clerk, Lynn Gordon, on my left, and our two Library of Parliament
analysts, Sam Banks and Marc LeBlanc.
On November 28, 2012, our committee was authorized by the Senate
to initiate a study on the safe transportation of hydrocarbons in Canada. The
study will examine and compare domestic and international regulatory regimes,
standards and best practices relating to the safe transportation of hydrocarbons
by transmission pipelines, marine tanker vessels and railcars.
Our committee has held 14 meetings on this study to date. We have
also travelled to Calgary; Sarnia; Hamilton; St. John, New Brunswick; Halifax;
and Point Tupper, Nova Scotia.
Today, I am pleased to welcome, in the first segment of our
meeting, Evan Vokes. Mr. Vokes, we have set aside about 20 minutes for your
presentation, so that gives time for the senators to ask questions. Thank you
for being here. I appreciate you spending your time, when you probably have a
very busy schedule of your own, to come here and speak to us about your
Evan Vokes, as an individual: Thank you very much. I
appreciate the opportunity to testify today on the safety of pipeline
construction and operation in Canada.
I am trained as both a tradesman and a professional engineer,
with a Master of Science in materials engineering. I worked at TransCanada for
five years as an engineering specialist before I was dismissed without cause in
2012. I was one of the few core TransCanada employees directly involved in the
technical acceptance of work on pipeline projects with values from thousands of
dollars to billions of dollars, but all pipelines share the same technical
challenges and quality requirements.
I found that TransCanada had a culture of non-compliance, deeply
entrenched business practices that ignored legally required regulations and
codes. What I have documented is a mix of politics and commercial interests that
has resulted in the false public claims of exceptional industry practice.
As described in their book We Are Here, TransCanada
details the so-called rightsizing of the corporation, which resulted in layoffs
for engineering, audit and inspection staff as the outcome of a new business
plan. This new business plan never reflected the regulations but was enshrined
in the practice of engineering and supply chain operations as how business
should be conducted, with the company desiring to take no accountability.
I had indirectly worked for TransCanada before I became an
employee in 2007, and so I experienced a change in perception, from the accepted
public image to the reality of what the TransCanada business model was. At this
time, the quality problems were known to management, with several quality
failures in the United States and Canada.
My experiences reporting internally as an employee were marked by
exposure to situations that were not in compliance with regulation. On the first
project, with up to a 100 per cent repair rate, I identified a serious code
violation and I was forced to retract that code violation. The second situation
I identified is a commercial requirement for customer data confidentiality that
was not being observed. It is that one there.
Intimidation and coercion were the TransCanada management tools I
experienced in my first months at TransCanada, as the written communications
were very different from the oral instructions. The first compliance changes I
tried to make were for technical compliance as part of a quality improvement
investigation in 2007. In 2008 I was being reassigned into non-destructive
examination. I had identified serious welding problems to my managers. The proof
of unsupported welding procedures was included in an official internal audit to
improve quality at TransCanada. Lack of control of the inspection process was
also identified as a central requirement. As an outcome of the internal report,
I put forward a design basis memorandum to start the control of inspection,
which management did not implement. That would be Exhibit D.
The second compliance phase of my efforts was changing behaviour
from the top down through engineering standards. As I took on more
responsibility for the non-destructive examination role, with the attendant
increase in accountability, my mentor showed me a court order against
TransCanada business practice for violating the regulations. That is the
I started working at changing the engineering documentation by
consensus, which resulted in a small victory but not full compliance. A
significant functional problem was that projects still could not directly hire
non-destructive examination, since the company lawyers had designated the task
as supply chain management accountability. Initially no vendors were in place
for compliance, but with peers at the functional level of supply chain
management we implemented a new database with no official permission.
Incidents related to business strategies were getting more
serious, with major engineering scandals within the Keystone and Bison projects
that resulted in substandard materials being used in the Keystone project and a
brand new pipeline that blew up in the United States.
The third compliance phase was to approach project managers to
achieve voluntary compliance. The overall response from the project managers was
silence as they carried on standard business practices instead of correcting
their actions. Several classic examples of projects refusing to comply occurred
in 2009, and these are Exhibits H and I.
When the National Energy Board finally stepped in on welding and
pressure testing violations, they limited the scope to 12 non-compliant welding
procedures and 7 non-compliant pieces of pipe on the Cutbank project. We found
that there were actually 100 welding procedures that were signed off by a senior
subject matter expert when they did not meet code. Welding is the core
competency of a pipeline company, so these events created a crisis within
engineering as senior management did not step in to stop the practices that were
After the failure of compelling the projects towards voluntary
compliance, the fourth compliance step was approaching middle management. A
direct confrontation with management by a project manager I influenced and
direct action by myself finally seemed to be starting to put this to an end.
That is Exhibit L.
I was astounded when the chief executive officer sent a letter
outlining his disappointment with the Bison and Keystone projects, when I saw
many projects struggle after circumventing quality control measures. Even our
state-of-the-art industry pipeline system that won awards at the International
Pipeline Conference was having serious quality control problems. The more I
looked into the business practice, the more the regulation violations were
exposed as the root cause and the worse the pressure was to stop my
The fifth compliance stage was to reply to the CEO to stop these
practices, but what I got instead was serious pressure to step into unsound
practice. In particular, a witch hunt for a pressure vessel inspection that did
not meet the code and the quality manager of Keystone pipeline circumventing
regulation were both extreme experiences. Those are Exhibits N and O.
Currently, there are some issues related to commercial risk
decisions that will be coming forward out of the United States related to
serious breaches of construction quality that reflect poorly on our export
The sixth compliance stage was the internal audit. I was forced
out of the building before I could finish submitting all the documentation.
Rather, the TransCanada staff who broke the law were retained and contributed to
the audit when I could not defend my points. I had fought a protracted battle
with TransCanada management and lost, with the regulation and code violations
appearing in the internal audit.
As the seventh compliance step, I contacted the regulator about a
formal complaint. I was requested to get the written, formal complaint in as the
message had gone right to the top and that my allegations were being taken
seriously. This is Exhibit P. This complaint submission resulted in a short
discussion on how the National Energy Board got what they wanted after
consultation with TransCanada about the internal audit, even though the
complaint outlined how the internal audit contained code and regulation
This inaction for such a serious matter resulted in the eighth
compliance step — taking my message to the media. Indeed, I believe the only
reason for the enforcement letter on the National Energy Board website was as a
result of media queries investigating my complaints.
The letter to Dan King at TransCanada was not reflective of the
severity or the scope of what was in the complaint. No court orders were issued
nor corrective action suggested on most of the important points in the
complaint. Who is accountable? In a recent CBC pump stations story, the National
Energy Board stated that they were not accountable.
In essence, my complaint suffered the same response that the
National Energy Board provided to the Cutbank project, which document you have,
where serious problems were incorrectly scoped and responded to via emails as
opposed to publicly transparent investigative paths that were expressed to this
committee previously. The National Energy Board Act outlines the expectations of
the court orders and enforcement for offences as outlined under section 128.
The TransCanada testimony that my complaints were administrative
is false, as the complaints were both substantive and the documentation proves
TransCanada took significant public safety risks. This is evidence that the
National Energy Board's voluntary compliance model has moved compliance
backwards in the last 10 years.
Indeed, the complaint had little effect on the quality plan of
the National Energy Board itself, as senior management of the National Energy
Board has appeared in front of this committee telling stories of compliance. The
reality from both my formal complaints and looking at various submissions on the
National Energy Board website shows serious violations occur repeatedly and no
follow-up action is taken.
The Enbridge Southern Lights pipeline, the Enbridge Line 14b and
currently KXL in Texas are demonstrations of the breach of social responsibility
the public can expect in the future. These pipelines are examples of the lack of
enforcement during construction, resulting in brand new pipelines that need
integrity work either before or shortly after being placed in service.
Professionals practising engineering is not mandated under the
National Energy Board Act or regulations, but it is professional engineers who
have the knowledge, the duty of care and the will to drive forward technology
and safe pipelines. Most engineered infrastructure such as pipelines remain in
service long after the designers and those who have constructed them have
retired. The risk to the public and other stakeholders is managed through the
industry standard, the code, which is formally accepted by the regulator as a
I believe that the goal-oriented onshore pipeline regulations
with their yes or no answers are the best possible safety measure for the public
if the laws are enforced and a professional subject matter expert is
In conclusion, TransCanada PipeLines has a culture of
non-compliance and deeply entrenched business practices that ignore the legally
required regulation and codes. What I have documented from the pipeline industry
is that the mix of politics and commercial interests has resulted in false
public claims of exceptional industry practice when the reality is that industry
struggles to comply with code and regulation, rather operating as a risk-based
industry with no enforcement or accountability.
I call upon the committee to ensure inclusion of engineering
accountability into the act. I call upon the National Energy Board to enforce
the laws of Canada, and I will submit to the committee the CD of evidence.
The Chair: Thank you, Mr. Vokes, for that presentation. I
appreciate it. We will begin with questioning. I will go to my deputy chair,
Senator Mitchell: Thank you, Mr. Vokes. I would like to
get more specific. I would like to go through a couple of your points and see if
you can give me a specific example. You mentioned the first situation and the
second situation. The first situation, I think you said early in your
presentation, was serious code violations.
Mr. Vokes: Yes.
Senator Mitchell: Could you give me an example of a code
Mr. Vokes: A regulation violation will do. The Kevin
Widenmaier email — I believe it is Part G — is a classic one, where we talked
about how we went and had fittings that never met code. Actually, not only did
they not meet the code, they never met two regulations: the Onshore Pipeline
Regulations paragraph 14 and the Onshore Pipeline Regulations paragraph 15. They
never actually met the code of construction. There are 1,200 fittings on the
Keystone pump station, some of which do not meet the strength requirement of the
Senator Mitchell: You said 1,200 on the Keystone?
Mr. Vokes: Yes, 1,200 fittings.
Senator Mitchell: How do you know they do not meet that?
Mr. Vokes: When they were doing hydro testing in the
United States, the coding cracked off one of the elbows and it is very obvious.
Another classic example of that is when I was at Fort McMurray at the beginning
of my career at TransCanada. Some days we were having repair rates of up to 100
per cent when I was learning the business. I went and started tracking the
automatic ultrasonic testing, and I could see it was actually one welder in
particular that was causing the problem. We looked at the problem. We pulled
back the cover and the welder was actually welding on one side of the bevel.
That was very serious because there are thousands of welds in the ground and it
is hard to go back and dig them all up. Of course, the natural thing to do is to
make sure a person retracts that sort of statement.
Senator Mitchell: When you talked also in your
presentation about substandard materials, would that also be referencing these —
Mr. Vokes: The fittings from Keystone, yes. That was not
the first time. We had big problems with lack of inspection with DL Flange. That
should have been the wake-up message with TransCanada. Then we went on to having
exactly the same problems on one of the alternative integrity validation
pipelines, with fittings from Ezeflow Inc. That also had exactly the same
metallurgical problems that we would subsequently see with the Canadoil
Senator Lang: I would like to ask a general question, and
it has to do with your having your engineering degree. Obviously there are other
engineers involved in the company and in other companies with respect to having
the duties that you had. Is there a concern by your organization, on behalf of
those who have engineering degrees, that this type of practice is going on
within the pipeline industry? I am asking this question because I noticed in one
of the emails on June 27, 2011, that you state: “I would not stake my PEng on
this regardless of how few welds there are.” In other words, you were talking
about your professional integrity and credentials.
Are there other concerns by other engineers? Do they have to sign
off on these particular projects?
Mr. Vokes: That is very correct. Even though I cannot
prove it, I was told some things very directly about how things would happen if
I carried on the way I would.
Senator Lang: You did not answer my question. My question
had to do with other engineers in the business that you are in. Do they share
the same concern you have? Their professional credibility is in question if this
is true, because they have to sign off, similar to you.
Mr. Vokes: If you look at the email from Chris Penniston
in your package, you will see I went and addressed a responsible engineer that
his approach to welding procedures was technically wrong and he wrote back and
told us that we would do it anyway. My young peer Chris Penniston told him that
we were not doing it that way, that he could do it himself.
Yes, other people are concerned. There are a lot of people. I had
large support within TransCanada. I did not have support at the management
level; I certainly had support at the functional level. The CD will show there
are quite a few people who supported me.
Senator Lang: This has to do with your testimony in April
before the three-member panel of the U.S. State Department regarding the
application for the Keystone XL project. You stated that TransCanada had used
the wrong standard for station welding for years in the U.S. and the company had
a poor safety culture.
First, could you tell me what has taken place since — that is,
has anyone verified your testimony to that panel, from what you said? Second,
what steps on the U.S. side are they taking with respect to seeing whether that
is true or not?
Mr. Vokes: I have not heard back from PHMSA lately, but
the last time I talked to my contact in the United States, the initial complaint
to PHMSA was with a lawyer in the United States trying to figure out what they
will do to have TransCanada do a remediation effort for welds that are accepted
with too long flaw lengths.
Senator MacDonald: Thank you, Mr. Vokes. I want to give
you credit for coming forward. It is not easy to be a whistle-blower. Everyone
wants to marginalize you and cast out your motivations.
You mentioned that over the past five years you have been steeped
in the culture of what is the minimum we must do to meet the regulation and
code. I would suggest that when it comes to private industry, when we are
dealing with safety regulations, private companies are always motivated by
Mr. Vokes: I would concur.
Senator MacDonald: — and finding return to their
investors. I think there is always the danger that companies will try to meet
the minimum requirements. That is why we have to make sure the minimum
requirements are substantial enough to make a difference.
I want to speak to you directly about the pipeline system. As you
know, there is a big discussion going on about reversing the east to west
pipeline and bringing bitumen west to east. It is important for this country to
get bitumen to market. I also think it is important to do it safely. With the
present pipeline that is there, which they are looking at right now, what is the
relative age of that pipeline in terms of different sections? Do you think that
pipeline can be safely converted to carry bitumen to the East Coast of Canada?
Mr. Vokes: The first thing is I do not actually know the
relative age of the pipeline. I do know the relative types of construction
techniques used for that pipeline. In-line inspection without close oversight
can be a risk. We saw that on Enbridge's Norman Wells pipeline. They had run
in-line inspection on that line for many years before the massive slow leak was
discovered. The important thing is that nowhere in the code of regulation does
it talk about what you have to set to the recording threshold at for the in-line
inspection. In the east to west pipeline, every one of those welds was probably
going to be a shielded metal arc weld that has a little piece of the weld
sticking through it called the internal reinforcement. That sticks into the
pipe. Any defects can hide underneath that reinforcement and are difficult to
detect with in-line inspection, as Enbridge demonstrated on the Norman Wells
pipeline. It can be done safely if you pay close attention to the detail. The
question is this: They are in control of it; they really want to get their line
into service. “Trust me” is not much of a strategy for making sure that the
in-line inspection is actually valid.
Senator MacDonald: One more question. Do you think the
argument is there that if we want to take bitumen to market across the country —
a big country, a long run — the safest approach would be to build a brand new
pipeline specifically for bitumen?
Mr. Vokes: I believe that is absolutely the safest way to
do it. Regarding conversion of Line 1 for TransCanada, that pipeline has known
hard spots on it and we cannot find it with in-line inspection. You will notice
that the majority of the ruptures recorded on the National Transportation Safety
Board's website have to do with Line 1 and Line 2 of TransCanada. Those are
about the last pipelines on earth that I think should be converted to carry
bitumen. I do not have a problem with what is in the pipeline. I have a problem
if it comes outside the pipeline.
Senator Unger: Thank you, Mr. Vokes, for your
I just have some general questions.
At the beginning of your presentation, you make the statement
that while you are not faultless, you have led a sustained attempt. Why would
you make that comment?
Mr. Vokes: As I learned about what we were doing, I made
mistakes along the way. It is unfortunate because under the engineering act, —
the code of ethics — an engineer is required to know the codes and regulations
they work under. I was never properly introduced to the codes and regulations.
Part of what I did at the beginning was to follow the lead of others, and, in
the past, I have actually given advice based on the way we did business, rather
than on what the code actually said.
In the end, I was not faultless. I told you about the very first
project, when I retracted my statements on the welding quality. Even though I
was an engineer in training at that point in time, I should never have retracted
those statements because what I saw was real. They were really not following the
welding procedure. We knew they were not following the welding procedure because
they had the 100 per cent repair rate. Those sorts of situations are areas
where, due to pressure, I stopped and did not follow through.
Senator Unger: You are a member of APEGA. Does the
organization agree with you? Where do you stand in regard to your relationship
with your engineering association?
Mr. Vokes: I was talking to a board member recently who
said that, based on what I have done, they have changed their approach.
My complaint to APEGA was suspended because they needed it to be
a clearer approach. It has taken me almost a year. I almost have it ready for
resubmission. This is very difficult — you have to understand — because I am
actually naming people who have done some very nasty things, and it is nothing
to be taken lightly. Unfortunately, APEGA has spent a long time, for lack of a
better description, looking at people building sheds in backyards, when the
reality is that there are some very serious engineering travesties going on in
industry. A classic example is what happened at Deer Creek Energy in Fort
McMurray. Somebody should have stepped in and properly dealt with that problem.
To have a company operating outside of its permitted procedures and blowing a
hole that large in the ground and then to have my professional organization not
step up to the plate on something that severe is a little hard to watch.
Senator Unger: You are basically taking on your
Mr. Vokes: I do not know if it is that. It is just that
they have never actually dealt with anything quite this large before, and that
is what the problem is. There certainly have been challenges with the
professional organization. It is not that anybody there thinks what I am doing
is wrong. It is just that it is difficult to deal with.
Senator Unger: We have been told that the pipelines have a
safety record of 99.9 per cent. You paint a very bleak picture of the pipeline
industry in Canada and probably, by extension, into the United States.
How do you rationalize these two very diverse points of view?
Mr. Vokes: It is amazing. It is like a large act of
providence. I have been on several projects that were very nearly disastrous.
Under the category of things that are very nearly disasters, I am surprised that
there actually are not more accidents. At the end of my career at TransCanada,
with the self-inspected welders, when I was told what they were doing, the exact
same practices that we were doing in 2011, we were doing in the 1970s, and it
resulted in a pipeline rupture in 1992. The problem is that, with pipelines, it
waits a long time. Many times with the pipelines, it has to be disturbed before
anything will happen. There has to be ground movement or something like that.
There are thousands of cracks in the system; it is just which ones will become
the problem. It is low probability and high consequence.
Senator Unger: You used the term “very nearly disastrous.”
How would you know that?
Mr. Vokes: If you had an 80 per cent through-wall crack in
a very large pressure vessel and you only found it because the inspector went
out and had a look, that is very nearly disastrous for a plant that does not
have a fire suppression system.
Senator Massicotte: Thank you, Mr. Vokes, for being with
us. I also compliment you for coming and speaking out on your concerns.
Senator Unger was basically on the same track. We hear you. I
have to admit it is very detailed, probably beyond our scope to follow your
reasoning, but we know you are sincere. Yet, we look at the history of incidents
and accidents for TransCanada, and there is nothing alarming there.
How can we respond to you? How about NEB? Have they done
something about your comments? They are probably better positioned to analyze,
in detail, your argument. What is happening there?
Mr. Vokes: I believe the NEB can answer for themselves
what they have done. I really cannot say what they have done because I have not
seen much that they have done. I can respond to what you were saying about the
There was a rupture at Beardmore, Ontario, in January 2011. Since
all of you live in Ontario, it is good to know that you just about ran out of
gas. The reason we ran out of gas is that, years previously, we had taken money
out of the integrity budget. My peers in integrity could not get money back into
the budget until we had a rupture at Englehart, Ontario, that burned the siding
off of a house. We started putting money back into the integrity program. Then
we had the rupture at Beardmore, Ontario, and did not have anything in place to
put the lines back into service, and you were running out of gas. We were
importing gas from the United States at that point in time. People have no idea
how close they come. It does not have to be reported.
Senator Massicotte: How do you explain your superiors'
behaviour? No one purposely makes mistakes. No one purposely becomes
irresponsible. You allege that, since the merger of TransCanada, the culture of
safety is not there. How do you explain that? Are they just a bunch of
Mr. Vokes: In the emails that you possess in front of you
right now, I probably would not call what Mr. Lazor did incompetent. I would
probably find another definition. What he was doing, in that particular
condition, was certainly not following anything to do with the code and —
Senator Massicotte: That is one individual. You are
talking about corporate culture and about a dominant problem at TransCanada. How
come no one is responding to your comments?
Mr. Vokes: I cannot comment on what TransCanada's actions
are. I know there was one executive who did seem to take what I said seriously,
but other than that, there are many other executives who behaved differently, in
particular, when I brought up section 54. Even though I was right, the personal
attacks were uncalled for.
How did they respond? I do not know, personally, how people
respond. I just wanted to have code compliance because, at the end of the day, I
was the accountable person. They were not the accountable people.
Senator Massicotte: When you look at TransCanada and
compare them to the other pipeline companies, from what we see, the history of
incidents or consequences compares quite well. Is that to suggest that this lack
of corporate security or safety within the culture of TransCanada is the same
Mr. Vokes: A very classic example is the Enbridge Southern
Lights Pipeline. That pipeline suffered material problems during the
manufacture, and then it suffered construction quality problems during
They built a twin to this line, called 14B, in Wisconsin, and it
had construction problems.
Senator Massicotte: You are saying that this is an endemic
problem, not only at TransCanada. The whole industry is not following code and
being unprofessional. All of them.
Mr. Vokes: They are taking risks.
Senator Massicotte: All of them?
Mr. Vokes: They are taking risks because they know that
the probability is low. When the probability is low, you keep hoping that you
can extend it farther.
Senator Massicotte: To summarize, do you think all
pipeline companies are being reckless with safety and are all the same?
Mr. Vokes: On the National Energy Board site, with its
unresolved issues and summarizing offences by the various energy pipeline
companies, I think it is very clear.
Senator Wallace: Thank you, Mr. Vokes.
When I listened to what you have had to say, you obviously have
great passion and I have no doubt whatsoever your motivation in bringing this
forward is for the good of all. When I do listen to you, and some of my
colleagues have touched upon this, you seem to have very serious concerns with
the competency of TransCanada, other pipeline companies, the National Energy
Board, the engineering professional association, and I am wondering in that list
if you have similar concerns about provincial regulatory bodies that are also
involved in these matters. Do you have concerns about their competency as well?
Mr. Vokes: I will not address that at this meeting because
I never dealt that much with provincial regulation.
Senator Wallace: To put it mildly, that is a very broad,
sweeping indictment from top to bottom of all regulatory and industry
participants in pipeline transportation. However, that is your opinion.
Whether it is engineers, lawyers, accountants, there are varying
opinions on just about everything out there. Did you encounter any other
professional engineers who would have opinions contrary to yours on these issues
you have raised? We understand you believe very strongly in what you have to
say, but have contrary opinions been put forward by other qualified professional
Mr. Vokes: The TransCanada internal audit contained
Senator Wallace: I am asking whether independent
engineering firms have voiced opinion on what your conclusions have been.
Mr. Vokes: Part of the reason for going down this path was
some of the comments that came back from external engineering companies where
they knew that some of what we are doing was not right and they were the ones
who pointed it out; for example, section 17, not inspecting all the wells. One
of the points came from an engineer from Cimarron Engineering who said what we
were doing in our specifications did not meet the regulations.
Senator Wallace: I understand the NEB found some of the
allegations you made were verified by TransCanada's internal audit process. I
Mr. Vokes: That is correct, some of them were.
Senator Wallace: I have listened to the serious
allegations you make, but are we to accept that at face value? I am asking if
any other contrary opinions have been expressed by other professional
engineering associations. I am not going to get into weighing who is right and
who is wrong, but have you encountered that as you have brought forward these
issues? Have other professional engineers voiced opinions that would differ from
your own on these very serious matters?
Mr. Vokes: Yes, certainly; the responsible engineer I
worked with at TransCanada was very adamant about voicing a different opinion.
Senator Wallace: Was he on employee of TransCanada?
Mr. Vokes: Yes, he was an employee of TransCanada.
Senator Wallace: What about engineering firms that would
not be employees of TransCanada but would be independent engineering firms? Have
any of those voiced opinions contrary to your own on these matters?
Mr. Vokes: I have never contacted any of them.
Senator Wallace: Has no other engineering firm voiced an
opinion that you have heard?
Mr. Vokes: I have never engaged in a conversation on that.
Senator Wallace: Did you hear of any comment they might
Mr. Vokes: I talked to Group 10 Engineering before they
did their assessment of the ERCB and I showed them the GC113 TransCanada audit.
We went through that and I showed him where that audit did not meet the
regulations, but we did not have a discussion on whether it was legitimate or
not. I know that is not exactly what you asked. That is a conversation I did
Senator Wallace: The internal audit process that
TransCanada conducted in July of 2012 did confirm some of the allegations that
you made. Did TransCanada have a regular internal audit process dealing with
these matters of safety? Would it be done annually, periodically or was the
July 2012 internal audit by TransCanada an anomaly?
Mr. Vokes: That is interesting because the last time I
actually heard where they did an in-depth investigation within TransCanada was
in 2007 where they brought a man by the name of Stan Gaillard to look at quality
improvement after a series of failures. I and several of my peers contributed to
that audit and identified that there were some areas of serious shortcomings.
That is the last real technical audit we had.
We had external audits, such as the GC113 audit performed by
PricewaterhouseCoopers. When you go through the GC113 audit, it is short of
technical substance certainly in the areas that I would have expected. For
instance, it never directly addressed section 53, which says you shall audit,
and we had no real audit program in place at all in TransCanada, and it never
addressed section 54 on independence of inspection.
There were many shortcomings, yet we have this audit report.
Everyone says we have been audited, but when you read the audit report, where is
the conformity to the code? The reality was different from the audit.
Senator Ringuette: Mr. Vokes, I commend your courage. You
must feel like David against Goliath. I have to admit, I am very disturbed by
your testimony this morning. I am very familiar with the code of ethics within
the engineering profession and it is commendable.
My big concern right now is the National Energy Board. Canadians
put their trust in the National Energy Board being the body that will make
certain that the system is optimal and secure. I am assuming that your complaint
has been sent to the National Energy Board.
Are we in a bubble in which, for the sake of the oil industry,
our eyes are closed, our ears are closed and we — I say “we” as a country — just
want to push ahead and never mind the future result?
Could you explain the relationship of your complaint with the
National Energy Board's response and the industry? We need to be concerned if
the system to protect Canadians is not right.
Mr. Vokes: The most important thing the National Energy
Board did is put the inclusion of whistle-blower protection in the regulations
recently. That is a very important thing.
The second thing that is missing is this: What is the point of
putting in a complaint if there is no change? That is the really important
point. The regulations are brilliant as far as I am concerned. The lineup
between the onshore pipeline regulations and the code is incredible if you
understand it. I operated in a condition where we were following the corporate
practice and that is what we did. In the emails that you have, you have people
talking about the corporate practice, and the corporate practice was not what
was in the code.
The question is even if it is low risk, should I embrace my
corporate practice when the regulations say not to do that? That is clearly an
ethical breach. They say it is low risk. I do not care if it is low risk. The
point is that it is not in the code; it is not in the regulation. How much of a
danger is it? A lot of it does not pose much of a danger at all, but a couple of
things were pointed out in the National Energy Board complaints that were very
high risk. I mentioned the self-inspected company welders. What they were doing
was high risk, especially from the stories I got back from them. On that
subject, there is definitely cause for public concern there.
There is the TransCanada pig launchers’ story. We could not see
the welds for the scraper bars when our contractor was hiring his own
inspection, and no one said a word about that for 10 years. I might have a
problem standing by a TransCanada pig launcher nowadays, but I think that there
are many people who intend to do the process correctly, and that is the only
thing that saves us. Regardless of my poor experiences with some individuals,
there are still a lot of people who would like to do it right.
The Chair: Senator Ringuette, I still have others. The
question lasted quite long, as did the answer.
Senator Seidman: Most of my questions have been asked
already. I must say that I am sitting here with enormous respect for you and for
the courage that it has taken to come forward.
I am thinking about all the testimony that we have had here from
pipeline companies saying that safety is their number one priority. They have
described to us many aspects of this — their plans, their responses, their
oversight, their quality control and all these things. I suppose there are many
adjectives to describe my feelings about your testimony here, such as confused,
disappointed and worried about Canadians' safety as we look at building an
increasingly larger infrastructure across the country.
Being futuristic, and thinking about what we can do — this is not
a good story; there is no question about that — however, we do have the NEB and
we do have a regulatory framework, and they do have oversight capabilities. What
I would like to know from you is, based on your experiences, what would you
recommend in terms of further regulatory steps that the NEB can take to ensure
some kind of better oversight?
Mr. Vokes: The first and most important thing is the key
to making sure that the regulations and codes are carried out, which is
inspectors. The United States is good with the concept of the OQ qualified
operators. I do like that concept, where people are formally trained and
accountable and allowed to stop the work regardless of how much of a schedule
disaster it is.
If I have a safety violation where a person may become hurt, the
National Energy Board regulations allow me to stop the work. If I have code
violations, everyone says, “Don't worry. Get it done. Deal with it later.” That
is the wrong attitude. We see a lot of that.
If you go back through the cases on the National Energy Board
website and how they are dealt with, and if you ask questions like did they
follow the regulation, did they follow the code, the answer is overwhelmingly
no. That is why they have problems. Did they get it done? Yes. Can they keep it
in service? Yes.
The projects are broken down into three parts: cost, schedule and
quality. If you do not take care of the quality you will get either cost or
schedule. That is pretty much the way it is. I have seen some well-done projects
and project managers who go through the effort to ensure they follow the
regulations as best they can, and I have seen others who are trying to do the
minimum code and underachieve.
The second thing is the concept of engineering. That concept is
important because in the front of every code is a forward that says following
the code might not necessarily be the best thing to do because you can still
make mistakes. We have a lot of people who make decisions based on commercial
points that are not necessarily in the best interests of the long-term viability
of the pipeline. For instance, all of our in-service welding was qualified on
low-strength materials, but the pipeline materials are high-strength low alloys.
Welding on high-strength alloys is more risky than welding on carbon steel. For
years we have all these in-service welding procedures that were qualified on
this group over here and we are using them over there. It is legal under the
code, but it makes no engineering sense at all, if it was a risk. You can fix it
with money; you can fix it with time; but you have to have the desire to go
forward and actually implement some of these things.
One of the things I was doing at TransCanada that was good for
pipeline safety — and, in the end I was getting good project managers who were
allowing me to use it — is using automated ultrasonic testing on pipelines where
we normally would use radiography. Radiography has poor detection of the most
serious pipeline defect cracks, whereas automated ultrasonic testing allows us
to find all the cracks. Even though it did not seem economical at the beginning,
we moved over to this technology and we did well. We did not do well
financially, but we did well on actually improving the quality and the safety of
Senator Patterson: Many of my questions have been
answered. I would like to thank you for your evidence.
Could you outline your educational background leading to your
qualifications as a professional engineer, please?
Mr. Vokes: Sure. I was terrible at high school. I am
serious; 63 in math, 33. I loved working with metal, so I worked in machine
shops and pulled lots of wrenches. I am a very practical sort of guy. I was a
very good welder when I was young but did not want to do welding for a living,
so I became a machinist. I was part way through my machining career and I
decided to take up the trades of millwright and journeyman. Unfortunately, a
shoulder injury precluded me from carrying on. Back in the days when I could
hardly pick up a cup of coffee, they challenged me and said they wanted to buy
some technology but I would have to be an engineer. So I signed up for
engineering school and in one year I did all my high school upgrading and went
to engineering school. I did a research project while I was there on the same
pipeline. I was coming out of Red Deer one day while I was going to school and I
saw a big hammerhead in the sky. It was a pipeline that blew up out by Nordegg,
Ram River. I did the research work on that on the stress and cracking because I
knew a lot about machining. We did a novel paper at that point in time. He then
made me an offer I should have refused, and I did a master's degree with him. I
did a lot. I worked in a lot of labs. I do not have children so I have been
passionate about my work.
Senator Patterson: Thank you very much for your candour. I
would not want to talk about my high school math marks in public.
To elaborate further, you were a welder and a machinist. Did you
get a journeyman licence?
Mr. Vokes: Yes. I am a journeyman machinist. I did not get
my journeyman as a millwright. Because I did welding in a machine shop, we were
not allowed to have defects in our welds.
Senator Patterson: Which province was that in?
Mr. Vokes: That was in Alberta. I am interprovincial: I am
a red seal.
Senator Patterson: Which school of engineering did you go
Mr. Vokes: I did both my degrees at the University of
Senator Patterson: I am a U of A graduate as well.
Senator McCoy: Thank you for the integrity of your spirit
and your courage going forward.
As a point of clarification, I thought I heard you say Cimarron
Engineering. You made a comment earlier about them. They are a third-party,
independent engineering firm?
Mr. Vokes: That is correct.
Senator McCoy: Could you repeat what you said about them?
Mr. Vokes: There was an error in our specifications, and a
young engineer at Cimarron Engineering had enough fortitude to stand up and tell
the project manager there was an error. We looked at the specification and
indeed we had an error. I did the research on it, and we had an error.
Senator McCoy: What I am hearing, then, is there are
third-party, independent engineers who share your opinion.
Mr. Vokes: There certainly are. There was actually another
one. There was the problem with the engineering specification in the United
States, which actually was caught by a non-destructive examination contractor,
because he read the specification and said there is a problem with it. He
brought it back to us, and indeed we had that same problem for three years and
used that same specification for those three years.
The Chair: We have run out of time. There were some
second-round questions that we will have to bypass. I just want to take the
opportunity to ask a couple of questions, if I could, Mr. Vokes.
You spoke earlier about fittings and valves that were
substandard, I believe — I am saying this in my words, not yours — that were
used in the U.S.
Mr. Vokes: That is correct.
The Chair: Would you please explain to me, is the U.S.
also very lax in how they do pipelines? We kind of get that drift — at least I
do — from your presentation, that Canada is. What you are saying is that the
U.S. is just as bad. Have any engineering firms or associations in the U.S.,
similar to Senator Wallace's question, stood up and said, “Yes, we agree with
you, Mr. Vokes; it is terrible in the U.S. also”? Can you verify that? Can you
tell me whether that happened or not?
Mr. Vokes: Surprisingly, if you say it is terrible you do
not work in the industry anymore. I think they have made that fairly clear.
Certainly fighting back does not work very well.
I will tell you how terrible it was. We hired UniversalPegasus to
oversee inspection of the Bison Pipeline. I was not involved in this but just
saw the outcome of it. They fired UniversalPegasus partway through building a
pipeline from the inspection tasks. Currently, in the United States, TransCanada
is building the KXL and everyone has heard about the 57 special conditions.
However, what we have is a brand new pipeline that has dents and is being cut
out. Dents are hard to put in a pipeline. You have to leave something in the
ditch. The code is clear about not leaving things in the ditch. The 57 special
conditions require that you run a quality control program so you would take the
rocks out of the ditch, yet we have dents in a brand new pipeline.
The Chair: I am asking you if an engineering association
in the U.S. has agreed with your submission that the U.S. is not doing it
properly, nor is Canada. Is there an association? I understand about dents in
pipelines. I have been around the oil and gas industry for a good part of my
Mr. Vokes: Absolutely. PHMSA has a record of Kenneth Lee's
public presentation about how not to build a pipeline. He has a serious
collection of pictures and events, including one of TransCanada's pictures, in
his presentation about things that should not be done to build a pipeline.
The Chair: There is an engineering association in the U.S.
that backs up what you are saying?
Mr. Vokes: There certainly is a regulatory association.
The Chair: Regulatory, but not an engineering association?
Mr. Vokes: Engineering has very little.
Senator Massicotte: I would like to qualify your question.
The Chair: Yes, quickly.
Senator Massicotte: How about the pigs? They do this a
couple of times a year. Would they not come up with the same conclusion?
Mr. Vokes: As I was saying earlier when asked about the
east-to-west pipeline, the pigs are amazingly accurate sometimes. The owner
company actually gets to determine what the recording threshold is.
Understanding that you cannot see under the weld reinforcement very well, at
every girth weld there is weld reinforcement that comes through. We do not have
perfect probability of detection. We are very good at detecting external
corrosion on the outside of the pipeline. That is the highlight of what the
in-line inspection is good at. I am not the expert on in-line inspection, but I
do know some of the things it does. It can find some long-seam defects. It is
good at finding external corrosion. It is not very good at finding defects in
girth welds. Those need to be found when you construct a pipe.
Senator Massicotte: In your opening statement you said
that the person operating that determines the degree of measurement they want.
Are you suggesting that they purposely put those criteria reasonably high so
they do not detect serious deficiencies?
Mr. Vokes: I would suggest that people should ask how the
same pipeline is pigged multiple times without finding the defect that later
leads to a long-term leak that was occurring all along.
The Chair: Thank you, Mr. Vokes, for taking time out of
your busy schedule. We appreciate your testimony.
Welcome to the second half of our meeting of the Standing Senate
Committee on Energy, the Environment and Natural Resources. We are continuing
our study on the safe transportation of hydrocarbons in Canada. I am pleased to
welcome, from Wave Point Consulting Limited, Darryl Anderson, Managing Director.
Mr. Anderson, welcome. Thank you for taking time out of your busy
schedule to come and present your remarks. I look forward to them. We will have
a brief period for you to make remarks and then we will go to questions.
Darryl Anderson, Managing Director, Wave Point Consulting
Limited: To the chair and members of the Standing Senate Committee on
Energy, the Environment and Natural Resources, I consider it a privilege and a
pleasure to be here to discuss with you the maritime transportation of
hydrocarbons. I speak to you this morning as an individual who came of age,
academically and professionally, during perhaps the last great influential
period where Canadian parliamentarians examined some of the issues that are
before us today. I am referring to what is known as the Brander-Smith report. I
think most people in the room have read it.
I had the privilege of graduating from university in 1989, and I
truly say that I am a child of my times. I have also been fortunate enough to
have watched the changes in energy development, technology and transportation
that have occurred since that point.
In the slides and the presentation I have given you, I have tried
to just highlight some of the many international regulations that are currently
in place to govern tankers. This material draws on the insights of my
colleagues, K. Joseph Spears, a maritime lawyer, and a former mentor of mine
from Australian Maritime College and a tanker captain, Dr. Devinder Grewal. Some
of you may have read some of the information that my colleagues and I have
In completing my opening remarks, I wish to stress that I will be
responding to your questions based on my personal experience of living on
Canada's West Coast for the last 49 years, and including a variety of
occupations along the way. I did spend some years in Alberta Energy, working on
international trade and energy issues, so I know something of the complexity of
the task ahead of you. Perhaps most important regarding answering your
questions, I will do so as an individual who is blessed with the opportunity to
study maritime transportation policy issues from a Canadian and international
Suffice it to say that the ideas in the presentation may help
establish Canada as an undisputed leader in the safe transportation of
hydrocarbons. Thus, I have already revealed my bias by telling you that I
believe we can be leaders in the world in terms of ocean governance and safe and
sustainable shipping, and this must be the cornerstone of a robust Canadian
energy and environmental strategy.
I would also like to preface our dialogue by saying that Canada's
changing energy trade prospects present a great opportunity and tremendous
Before coming here this morning, I had an opportunity to review
many of the speakers' remarks. I must say how we respond to environmental issues
in the transport of hydrocarbons will take a combination of applying the best
practices from both the domestic and the international realms, and I dare say it
will require a collaborative approach, which I believe is a Canadian trait when
it comes to problem solving.
I look forward to receiving your questions. I would just like to
guide you through some basic structure of the presentation, and then we can
immediately go into question and answer.
You have seen my introduction. We provided a framework. “We” is
my colleague Joe Spears and I, and we have been working on maritime policy
issues for many years. I am a graduate of Australian Maritime College, so I have
gotten to know Dr. Devinder Grewal quite well over the years. Missing from a
good portion of the debate and literature is the question of whether there is a
framework for analyzing these complex problems. We hear no shortage of advocacy
groups wanting A, B, C, D — and the list probably goes longer than the alphabet
that I am familiar with — but we wanted to step back and ask, “Is there a
I must confess that in our framework we talk about prevention,
response, mitigation and restoration. However, most of the work I do is in the
first three stages; I am not an expert on oil spills in the environment and
restoring that. We recognize that it is an important issue. The work we have
presented today is really focused on the front three stages.
In that, we must also recognize that we have heard the expression
“world-class standards” and other frames to describe a target people are aiming
for, but I think it is important to note there is not one universal approach.
When you review the literature — and I compiled on the plane yesterday around a
hundred different research sources that are legitimate on this topic, minimum —
what we find is that there is very little written in cross-jurisdictional
However, I have included some papers at the back that I think are
some of the outstanding pieces of work. Marlene Calderón Veiga from Portugal is
probably the world's leading researcher. I will tell you the reason she became
such an expert. She is from Portugal, and you might remember that, a few years
ago, there were a couple of incidents off Portugal where they had oil spills.
She was doing her master's degree in maritime transportation. I think it is
funny how someone in Portugal was also a child of her times in doing an oil
spill — and I look back on the West Coast, and we often find that our
professional interests are rooted in that personal experience.
There are some characteristics that emerge from both her research
and our research, and I would like to summarize them here for you today.
When it comes to oil spill preparedness and response, there have
to be cascading and complementary layers of federal and state policy regulation
and operational response. There is no one country in the world that tries to do
it all. Second, the way they play out in the kind of resources you need — and we
can get into it in more detail — but when I talk about a complementary approach,
those regimes that are more robust have those cascading and clearly defined
roles. You also need active roles and networks of expertise, and that includes
both at the federal level and scientific information.
The key thing to remember is that we need regular reviews to
recognize and update capability. While all of us have read the Brander-Smith
report, do I dare ask whether anyone in the room had read the Brander-Smith
report five years before this time, when we were talking about energy exports,
or was I one of the few nerdy kids in high school who actually read it at the
time? It is good work because it inspires, but that is a bit of a gap between
readings. I have to share my copy now because they are hard to find; it is
getting more popular.
It is also clear that for the more robust regimes, prevention is
better than responding. Everyone agrees. However, when you do need to respond,
it has to be quick, practised, measured and effective.
Finally, do not underestimate the need for a robust and
well-informed regulatory system. It is crucial for enforcement.
You will notice that I used the term “robust.” Quite often people
ask me what standard is better. We could go to the American standard — and I
immediately joined our pipeline date here. We are talking about minimum
standards. The European approach is for prescribed outcomes. I think we have to
bring clarity to what we want in Canada. However, regardless of that, you need a
well-informed regulatory system.
Finally, I would like to make brief comments on the use of tanker
exclusion zones. When we look at regulatory regimes around the world, the use of
large areas to exclude tankers over large areas is generally not found. There
are provisions for specific areas to exclude tankers and enhance their
Those are some high-level summary data. The rest of the
presentation is essentially information to say, “Darryl and company, how did you
get there?” I turn it over to you and your colleagues for questions.
Senator Mitchell: I hope this is within your area of
expertise; from listening to you, it probably is. Given the West Coast, which is
certainly in the spotlight right now for marine transportation, is a huge
expanse, if you had a spill in some isolated area along the coast, how would you
ever anticipate centres close enough to get there quickly enough?
Mr. Anderson: That is the real challenge. I think on slide
14 I talk about how much tanker traffic there is and what it might mean. That is
the real challenge in the West Coast. I have a background in transportation
logistics. When we did the literature search, I thought I could find a logistic
model on how to deploy resources, and there is not one. I will tell you how
countries address it. There is no question that if you go on the south coast —
and I live in Victoria and I can watch the ships — we are well covered there.
Twenty minutes outside of Victoria, you are in the middle of nowhere. I know,
because there is no cellphone coverage.
When I started my career I had the pleasure of working with the
Fisheries and Oceans Small Craft Harbours, so I have been to almost every
small-craft harbour on the coast. However, there used to be a coastal
tug-and-barge and logging industry, and the whole works. I remember one year,
when the forest industry collapsed, and they did not bring those tugs and
barges. That was the winter we talked about regular garbage in remote
communities: The winter of my discontent.
It is clear one of the things we identified is that you will need
different resources on the north coast.
One thing that is fundamental to understand is that we have had
tankers in Canadian waters for a long time. The tankers from Valdez, Alaska,
regularly travelled through Canadian waters. What is fundamentally different
about the proposals for oil tankers in LNG is that we are now shifting that
activity away from what is essentially our territorial scene — our exclusive
economic zone — and shifting it into our coastal waters, our internal seas.
One of the things that few people do not recognize is that the
Oceans Act has an obligation for the precautionary principle. We can argue
whether you can, and how far you should, extend that precautionary principle
right through to our exclusive economic zone. My colleague and I have looked at
that with some legal scholars. In our exclusive economic zone is the thin edge
of the wedge of how aggressively you can apply the principle. Where our ports
are located — Kitimat, Prince Rupert, Vancouver — is the heart of internal seas.
We have not really come up with how to address that precautionary principle.
There has been no real systematic study of the resources you need. You clearly
need aircraft, and you clearly need the other kind of resources for quick
The silent recommendation from the Brander-Smith inquiry is
whether there is enough shipping traffic on the north coast of British Columbia
to warrant an emergency tug assistance standby that is dedicated. If we go to
Washington State, there is one in Neah Bay, Washington State, that is now funded
by industry but started by government. In Australia — the Great Barrier Reef —
they have a cascading system and put a higher level of protection on the Great
Barrier Reef, and they have standby emergency tug assistance, not only for
tankers but also for all vessels. There are standby emergency tugs in European
countries as well. We could go on with quite a list of resources, but, if we
read the newspaper a couple of days ago, the Canadian Coast Guard was in such a
state that their existing inventory was 25 years out of date. I think they read
this report. They have not done a great job of keeping up. I really suggest that
they are not ahead of the curve at this point. I am not saying they are behind,
but it does require some level of effort to get there. I am the kind of guy who
worries that you could actually physically build a pipeline in a shorter time
than it would take our institutions to be ready.
Senator Mitchell: How could you characterize the risks of
tanker traffic in and out of Vancouver's harbour? Let us say Kinder Morgan
Mr. Anderson: We have not had an incident in Canada for a
very long time, so it is very low. On page 10, I have a chart of the types of
incidents. These are worldwide. One of the things that have happened, due to all
of the international rules, is that the number of tanker incidents worldwide has
gone down really low. We do know from worldwide experience that, at a place like
Kinder Morgan, in Vancouver Harbour, if you were to have a tanker incident, it
would be more likely to occur during loading, unloading and discharging — small,
spill-related issues. That is kind of what our current regulatory environment
contemplates. Very small spills, which are fuel, occur when tankers get
bunkered. There are other operations. You will notice that, in the column here,
we have “unknown.” Unknown is not really unknown. Let us do the math on the
supply chain. I am either at the port, at the terminal or bunking. I am either
in confined waters or on the seas. The category of “other” is really responding
to seas. What I see missing from the risk assessments, whether it is Kinder
Morgan or anyone else — and I have done a little bit of work with Fairplay and
it can be done with AIS data — you can break out incidences in the data now to
describe exactly where they are and fine-tune your risk models. That has not
been done in Canada.
Senator Lang: I was not going to ask this question, but I
will to follow up on Senator Mitchell's point.
I do find interesting the Port of Vancouver and the oil tanker
traffic going in there. One aspect that you have not touched on is that the
number of tankers going into Vancouver is almost 50 per cent less than it was 10
years ago, in my understanding, because of the size of the tankers.
Mr. Anderson: Yes.
Senator Lang: It would seem to me that, for individuals
such as yourself, with the expertise you have, very important factors with
respect to calculating risk would be the fact that there is less traffic, the
fact that there has been less traffic, the fact that the tankers are larger and
compartmentalized and the fact that there are more technical services with
respect to the total shipping industry. Is that not correct?
Mr. Anderson: Yes. We have not denied any of those points.
Senator Lang: I am not asking you to deny it. I do not
understand why individuals such as yourself are not pointing this out because
those on the other side of the question, who do not want any tanker traffic, are
not bringing this information out so that the public can have a fair debate over
the question of safety.
Mr. Anderson: Yes. I am a researcher, not an advocate. I
am a policy researcher.
On page 12, we have gone broader and looked at the location of
Pacific Northwest, including Vancouver and San Juan. You will see that we say
that, even if Kinder Morgan proceeds, you will not see that much more increase
Specifically into Vancouver, I could list all the kinds of
terminal and operational procedures that I have on this page. It is in my notes,
sorry, not yours. All those things exist, from tug escorts to training,
navigational aids, vessel traffic schemes. They have clear, narrow requirements,
pilotage, transit windows, traffic safety controls and decision-support tools.
All of those things exist in Vancouver that account for the safety record.
I began my remarks by saying that we hardly have any incidents in
Canada. The real issue now becomes whether you can you take that experience from
Port Metro Vancouver and extend it to areas where we do not have port
authorities and that same level of infrastructure and human capacity. You are
right in terms of all of the things that exist in Port Metro Vancouver.
Senator Lang: I want to ask for a general statement from
you. In your opening remarks, you say: “. . . may help establish Canada as an
undisputed leader in the safe transportation of hydrocarbons.” Further on, you
say: “I believe we can be leaders in the world in terms of ocean governance.”
We have had witnesses here, prior to your coming, who basically
said that, if we are not leading, we are definitely one of the leaders in the
world with respect to how we handle our marine traffic and our safety record.
I would like to ask you further, in order to become number one,
as opposed to being in the top five or six countries around the world, what
exactly would you do, if you were in charge, to make us number one?
Mr. Anderson: On page 17, I have a slide there called
“Opportunities for Value Creation.” I think the point that we make in the
subsequent slide is that there are some other very specific recommendations we
could walk through. We are not suggesting in our research that Canada needs to
adopt every single thing on this. In my opening remarks, I said that with great
opportunity comes great responsibility. The more traffic you have, the more
likely it is that you will have to go into the toolbox to apply some of these
tools. The appendix that we have is actually a compendium of stuff at the back.
You will see, at different phases of the risk management, where you can dip down
I will give you an example, let us say Washington State. The
federal government announced in March that they will move to incident command
structure. That was a long request of the Province of British Columbia. When you
talk with the folks in Washington State, they have been at it systematically
since Exxon Valdez. They do not necessarily use a formal risk strategy in
answering the question about how to allocate resources, but they do numerous
scenarios at the state and county levels, including tribes and work with the
U.S. Coast Guard. When you talk to them candidly, they have had growing pains.
Where they are at now and where they started 20 years ago are two different
places. I am saying that incident command structure is a great place to start,
but, unless you fund it with resources, do the training and drill it down into
the community, you are not far. Washington State also has an emergency tug
assist program. That is another example of excellence. We are not, in our
research, saying that Canada is bad. What we are saying is are there
opportunities to do better. For instance, Norway has prescribed standards. In
Norway, we have to distinguish between ship-source oil pollution spills and the
offshore. I am referring to ship-source oil pollution here. They have a national
program where local municipalities have a defined level of responsibility for
handling waste oil. I asked that of a response organization, and they said that
that is the shipowner's responsibility. I used to work with Fisheries and
Oceans, and every year on the Queen Charlotte Islands the fishing fleet would
change their oil. I had no legal place to dispose of that oil. If you go back
through the Department of Justice's and Fisheries and Oceans' records for,
roughly, 1991 — you can ask for the records — you will basically find, “Dear
Mr. Anderson, you are currently breaking the law. I suggest you stop breaking
the law.” I am a servant of the Crown. Every year, the fishing fleet changed,
and that was small amounts of oil.
Getting back to the north coast, we do not have
places where you can dispose of the oil readily. Those are just some examples.
We can walk through the slides and be more specific in other areas.
Senator MacDonald: Thank you for being here.
In regard to spill response, I do not think
there is any doubt that the regulatory system is stronger. The ships are
certainly better constructed, but of course, all ships are liable to experience
catastrophic problems. Any ship can sink. The Titanic was not supposed to
sink, but it went down on its maiden voyage.
When it comes to a catastrophic loss of heavy
oil, should part of the response be that there are certain ports on both the
East and the West Coast that the largest vessels perhaps should not go out of
when alternative ports are available that provide an environment more conducive
to accepting and responding to a catastrophic loss of petroleum?
Mr. Anderson: You
will find in the statistics that catastrophic loss seldom occurs at the location
of where the port is. They tend to be during the at-sea voyage or on the
approach segment. Therefore, I do not worry too much about the location of the
port because by the time you have done the technical standards and all the other
work, you have that one nailed pretty well; you have spent a lot of time and
energy thinking about it.
What I worry about, though, is the opposite
scenario, a catastrophic spill and unintended consequences where we have a
poorly defined port-of-refuge policy and a remote location may have to respond
to an incident from a passing ship. Do we have the right resources for that?
At the loading or discharging location of a
marine terminal, the marine engineers and everyone else do a very good job of
that. Citing a terminal is not an easy task. I hope I have answered your
Senator MacDonald: Somewhat, but I have a quick follow-up. I will give an example. You
are well versed in this stuff; I am sure you are familiar with the loss of the
in Chedabucto Bay in 1970 and the Kurdistan in 1979. The Kurdistan
was lost off the Strait of Canso; it was heading to the refinery in Quebec.
People hardly knew it disappeared; there was almost no residue. If that ship had
gone down in the St. Lawrence River, it would have been a much different
scenario, no question about that.
I am curious, on the West Coast — I know most of
the your work is on the West Coast — if there was a large, catastrophic event,
what would the difference be in a catastrophic event in Kitimat as opposed to
one in Prince Rupert?
That is where we talk about the ship to location. Right now, there are not the
resources to deal with what is being contemplated. That is not to say the
proponents do not have plans, but for a catastrophic loss on the north coast,
currently we have gone through the voluntary tanker exclusion zone to deal with
tankers because they were travelling further out in our territorial seas. We
thought if we put in aerial surveillance and pushed them out further, that would
be adequate. Those tools have worked in that situation.
As soon as you move inland, however, those tools
become much less effective. You need other tools for a quick response, and you
need to look beyond probability and frequency analysis. You need other risk
management tools, which have been identified in the presentation.
Without people on the ground planning these
things in the early stages, it is really difficult to do it. The marine world is
known for doing things as a result of experiences from those types of incidents.
When I talk to my aviation friends, they kind of have a different view of the
Thank you, Mr. Anderson. This is very interesting.
I am from Alberta. On May 31, the Government of
B.C. officially opposed the Northern Gateway because it was concerned with the
pipeline route and spills. Do you share the province's safety concerns and
There are aspects of the province's issues that they have, but I do not speak to
any one party's particular response to those issues.
If you were to ask whether the province's
standards meet any of the issues that we have fully addressed in the research
that my colleagues and I are doing, I would like to compare them the other way
and say there is still room for improvement. I do not want to criticize someone
else's effort. I want to say, “Darryl, you are short of your own efforts here,
and this is the reason why.” I like to do the comparison the other way.
What about concern about shipping dilbit? Does that raise a different set of
Mr. Anderson: I
get emails from people all the time on the environmental side who are concerned
about the properties of dilbit, absolutely, not so much on the shipment and
transport but when it gets into the water. That is one area my colleagues and
I — you need a biology background and not necessarily a shipping background —
are concerned about.
I think it is a legitimate concern. I am aware
that testing has been done. I am also aware that a fair amount of that product
has already been shipped out of Kinder Morgan, and they may be in a better
position in Vancouver to answer that question about the properties of it. When
it gets into the actual marine environmental impact, it is not my area of
Would that particular product be best shipped to the Port of Vancouver or
further up the coast?
Mr. Anderson: I
do not believe it is a question of the location of where it is shipped; it is a
characteristic of the oil in the water and the marine environment that is the
concern. If I were to ship it anywhere, I would want to know a lot about the
marine environment to which I am shipping it rather than actually making it a
terminal location decision. The ships, pipeline and railcars can handle those
products; it is what happens when it gets into the natural environment that is a
Senator Wallace: As you mentioned at the outset, the oil spill response regime we have
in Canada resulted from changes to the Canada Shipping Act in the mid-1990s, and
that was based on the Brander-Smith report. The spill response regime we have in
Canada seems to be very comprehensive. It is clear on where the responsibility
for spill response lies and the need to have response organizations be properly
equipped, with the proper expertise to respond and so on.
Do you have any comment on the effectiveness of
that regime in place today? Obviously, if there will be increased tanker traffic
on the West Coast, it will build on that, but could you comment on the
effectiveness and the capabilities of the regime as it exists today?
Mr. Anderson: I
thought I would acknowledge that with the changes to the recent legislation,
they offer a unified command. As it exists today, one key difference in Canada
compared to the United States, even in Australia, actually, and the U.K., we
have a polluter pay principle. At the beginning of the exercise, when the
decisions have to be made, the polluter takes the lead role. Remember how I said
in my opening remarks that a fast, efficient response is really needed? There is
a tendency in Canada to ask, “Who is in charge here?” If you go to the U.S. and
you point to a port captain and the U.S. Coast Guard commander, make no mistake,
they are in charge.
The polluter still pays. If you have ever dealt
with a U.S. port commander, they are in charge. In Canada, on a large-scale
exercise, it is doubtful sometimes whether we have that same level of authority
in those really tough choices, if it required beaching a vessel or taking a
vessel that was in distress to a remote community, both to save property and
reduce damage, if that was a really hard choice.
The U.K. has a model where they have the state's
representative for salvage and intervention that has that authority in decision
making. The concept is that other jurisdictions do a bit better job and are more
effective, including Australia, at that early-stage response because time is
In Canada, we have been fortunate because we
have not had to test it, but if you ask people deep down if we are really up for
game day on a big one, we would probably have a range of opinions, and I would
rather see a unanimous group of opinions.
Senator Wallace: We heard yesterday from the Western
Canada Marine Response Corporation, which has a spill response capability of
26,000 tonnes. The Canada Shipping Act requires a minimum spill response of
10,000 tonnes. Tankers that might pass on the West Coast could be as large as
300,000 tonnes. Do you have comments on the appropriateness of a 26,000-tonne
Mr. Anderson: That gets back to a philosophy of minimum
standards versus prescribed outcomes. In terms of minimum standards, the Western
Canada Marine Response Corporation does an excellent job. I know their people
and I have had their training as a port person.
The question is, do we want a minimum standard approach, in which
case we continue to do what we are doing? Having had discussions with them, the
question, even if we have that response standard, is this: Have we done a model
or created a scenario for the best places to deploy those resources in Canada?
We have not done that.
Norway uses a risk management model from Sweden. They do not have
a prescribed minimum standard. Rather, they work closer to a prescribed outcome
approach based on spills and what their shipping traffic would be. The response
organizations are capable. What target are we shooting for? I am not one to
believe that the size of the ship represents the biggest risk. You will see that
we also reference coastal barges and tanks. It is an often overlooked segment,
but any remote community in Canada will take fuel in by barge. Ultra-large crude
carriers get everyone's attention because they are so big, but I do not think we
will see all tanks go simultaneously. Statistically, the evidence is not there.
Senator Wallace: In responding to an incident, the
location of the response equipment would be critically important because of the
obvious need for speed. Should it be left to the response organizations to
decide where these resources should be located or should it be is imposed by
regulatory authority or some combination of the two working together?
Mr. Anderson: It should be a combination of the two. I
used the word “collaboration.” This is a perfect example of collaboration. In my
presentation I talked about value creation and opportunities. I would be the
first to admit that if we tried to tackle this alone with a regulatory approach,
we would fail. The reason is that people on the ground doing the technical work
have the best understanding. No amount of second guessing by guys like me will
get oil out of the ground. You need the right regulatory framework in
collaboration with the people that do the work in the best jurisdictions in the
world; and Canada is robust in that category of bringing those parties to bear
and making those kinds decisions. Our record can be proud and strong, and other
countries around the world are looking to us. That is why this work of the
committee is important.
Senator Wallace: Thank you.
Senator Massicotte: On page 6 of your presentation, you
talk about how tankers are governed internationally relative to the context.
Summarize what we should take from that. What should we change relative to the
way we govern ourselves internationally?
Mr. Anderson: Very little. The international approach
fundamentally for the last 20 years has been on prevention, and the statistics
prove it. We see worldwide great uniformity during the prevention stage of oil
spill response and tanker and shipping governance. Canada has had some leaders
in the IMO, so we are very good at that stage. Where countries start to diverge
and differ significantly is during the mitigation, restoration and response
stages — the latter stages — because of the domestic rules and regulations and
the amount of shipping traffic.
From an international perspective, I would be one of the first to
argue that the international community has done a very good job in this regard.
I live in Victoria, where I have quite a few friends in environmental
organizations that do not believe that fact, so I try not to have those
discussions on the school playground. The evidence is clearly before us.
Senator Massicotte: Senator Lang raised the point about
page 15 of your presentation where you say “somewhat” in quotations. The
evidence we have is that there had been a significant decrease in Vancouver even
with the opening of a pipeline should that occur. The result would still be
significantly less than it was even seven or eight years ago.
Mr. Anderson: On page 12, I reference that the location of
tanker traffic in the Strait of Juan de Fuca includes the straits going into it,
and not just Vancouver, because the south coast of British Columbia has U.S.
traffic coming in. I am trying to say generally on this point that one or two
individuals have a condominium above a certain bridge in Vancouver, and they
talk about a 70- or 80-fold increase in tanker traffic into Port Metro
Vancouver. They happened to pick the lowest point in the recession. If you go
back over a times series and look at this, in that whole body of water we would
have to have a response regime. We have ebbed and flowed, but we are not talking
about huge spikes in traffic.
Senator Massicotte: The evidence we have, even 15 years
ago, is that the relative traffic, even with the proposed pipeline, would be
less than it was historically.
Mr. Anderson: I do not think you would find that in terms
of the specific Kinder Morgan. There is a range of increase in traffic at a bit
of a different location.
Senator Massicotte: You can choose a certain location, but
obviously our concern is more macro.
Mr. Anderson: That is why I included the chart on page 12.
Senator Patterson: The federal government announced in
March this year a new initiative to improve tanker safety, World-Class Tanker
Safety System. With that initiative, there was a commitment to additional
research on the impact of diluted bitumen on the marine environment. We have had
some witnesses raise concerns about the impact of that product on the marine
environment. Would you have any comments on whether current spill response
organizations are equipped to respond to a bitumen spill?
Mr. Anderson: I was part of a presentation where the
Western Canada Marine Response Corporation demonstrated to an audience how they
handled the situation, but it did not come from a ship but from a pipeline above
The one area that is not my expertise is when that product hits
Senator Patterson: Our system for tanker liability and
compensation in Canada combines domestic and international funds. We have been
told by Transport Canada that they are reviewing the adequacy of the amount of
the ship-source pollution fund. Do you have any comments on whether the current
tanker liability and compensation system is adequate and whether that
ship-source pollution fund should be increased?
Mr. Anderson: I will preface it by saying that, I believe
in 2015, the IMO will make changes overall that will increase those limits.
One of the charts shows where tanker spills occur. The liability
limits when dealing with a small spill during terminal loading or bunkering at
that stage of the journey are more likely to be adequate in an area that is not
too heavily populated or where there is not a lot of valuable property because
they are small-scale incidents. Marine terminal operators are certified response
organizations and they have to have equipment. All the resources are right there
to deal with those small-scale incidents.
However, a question remains unanswered, and I have seen some of
the analytical work but am hesitant to draw a firm conclusion. There probably
could be a scenario where those liability limits are not right. What people are
missing in the discussion is not the adequacy of the liability limits but the
key issue in public policy that we have moved to a strict liability regime that
facilitates payment of money versus litigation where you had to prove your claim
going the other way.
Let us focus on the public policy of strict liability for
shipowners, and then if we need to fine-tune it in a specific situation based on
real risk analysis, let us do it. Let us not lose sight of the important
principle of having to litigate and prove a claim like you have to do in other
parts of the world where they have not signed on to that. That would be three
steps backwards. I am not suggesting you do it, but people often focus on the
amounts. In some situations, people truly do not know but there is an important
legal principle that went before determining the amount.
Senator Seidman: Thank you very much for your substantive
presentation. I do agree with what you said very early on in your presentation
that prevention is better than responding.
I was going to hone in on something in particular, but I would
like to focus on your response to another colleague around the table regarding
the chain of command. If I recall correctly, we have heard here that, very
clearly, the Coast Guard is in charge at the top of the chain of command. You
suggested that is not the case. I am referring to a spill response when there is
actually a crisis and emergency that needs responding to and it is critical to
know who is in command.
Mr. Anderson: The Coast Guard is in command, but in our
system of polluter pays, the Coast Guard passes judgment on the adequacy of the
polluter's efforts. If they are deemed inefficient, they can take action.
We have really dedicated people in the Coast Guard. It is not an
easy call in a situation to say that someone's efforts are inadequate. While you
want to give people the benefit of the doubt, time goes by.
I have an article here I will read for the committee. It is the
U.S. Secretary of State's representative for Maritime Salvage and Intervention
in the U.K. Australia has a separate system. In a catastrophic event, people
talk about salvage at the end of the process and not the beginning; there is a
government official that has the power to direct the resources of the polluter
that pays, and their decisions are binding and final.
That is a very different level of accountability than our Coast
Guard basically getting into a legal fight with their lawyer saying, “We are
stepping in,” and the other party saying, “No, we are in command here.” It came
about out of OPA-90 in the United States that the U.S. government did not want
to go down that other road. In Canada, we adopted something between the American
and the European approaches and we thought, “We will give them the benefit of
Senator Seidman: You say here that a robust and
well-informed regulatory system is crucial for enforcement. Is there something
that could be done in the regulatory system to improve enforcement and chain of
Mr. Anderson: The structure we have in Canada is great.
How we have resourced it so our people can practise in different scales in the
North, on the north coast of British Columbia — we do some joint exercises.
Therefore, we have that part of the regulatory structure right, but we have
tended to starve our institutions of the capacity to do what is the right
structure. That is my opinion.
Senator Seidman: You mentioned practice, and that was
going to be my question in terms of prevention. That is a sort of preventative
approach in that you practise, and that you have to practise based on
effectiveness, so there is a certain sort of basis for what you are practising.
It could be a scientific basis or whatever is out there in terms of best
practices from experiences internationally or even nationally.
In your understanding of the way things work, is there sufficient
research and development, and a sufficient basis right now and sharing of best
practices for practice and effective practice?
Mr. Anderson: In Canada, I think the answer is “no.” If I
were to go south of the border into Washington State, the answer would be “yes.”
There is good cooperation with the province.
I think it is known in the part of the application of the
knowledge rather than knowing there is some real secret here that we need to do.
It is like many things in life: We know what to do, but do we get around to
doing it consistently enough? I am also concerned that we will have a
generational change in people. If you do not have experience with this — doing
it and practising — learning on the job is not where you want to do it.
All this literature that we have cited is existing literature. If
I can find it, I am sure the policy people can find it, but it is implementing.
Having been inside the federal system and provincial governments, we in Canada
tend to downplay this type of policy research, which is why my colleagues and I
have tended to pick up our pens.
Senator Seidman: You are saying application of knowledge.
That is interesting. That means sharing of best practices, and then having
people actually implement and practise what these are.
Mr. Anderson: We tend to have a body of knowledge that is
sufficiently robust regarding knowing what to do. Around the world other
countries look to Canada and other jurisdictions for doing it. However, clearly
Australia, Washington State and Norway put into practice much more what they are
doing. One could argue they are more coastal states, and we will save that for
another time as to the reason why.
The Chair: I have a question, and then I will go to the
You said that tankers from Valdez regularly travel through
Canadian waters. Where does that happen?
Mr. Anderson: They are going out from southern Alaska
through our exclusive economic zone. Some will travel to California and some
will go to one of the five refineries in Washington State. They use the Strait
of Juan de Fuca.
The Chair: It is the Strait of Juan de Fuca you are
Mr. Anderson: Yes, but they will also use our exclusive
economic zone, beyond the voluntary tanker exclusion zone. It is somewhere
between the territorial sea and our exclusive economic zone. Outside the
voluntary tanker exclusive zone, they will transit Canadian waters. This is why
aircraft and surveillance are important, because they are out a long way from
The Chair: We just had the response organization answer
that question, and they say that they stay out of the 200-mile limit from Valdez
and would only enter Canadian waters in the Strait of Juan de Fuca. Would that
Mr. Anderson: More or less, yes.
The Chair: You are saying they stay out of the 200-mile —
Mr. Anderson: Until they come into the approach —
The Chair: I want to get that straight; I do not want to
mix it up with the economic zone.
Mr. Anderson: They will stay outside, and then when they
come in, they will pass through our exclusive economic zone and territorial sea,
and into the strait.
The Chair: Okay, good. Thank you.
When you talked about the fishing fleet and your experience on
north coast with no place to deposit your used oil, I guess that goes to the old
saying that a fishing fleet pollutes more than anyone in our waters. It is my
personal experience from before I got into politics, which was quite a while
ago — 25 years ago — that if you sold lubricants, you had to provide a place to
actually bring them to. In fact, I was required to do that. That was 25 years
ago. Can you explain what you meant by that?
Mr. Anderson: I started before the legislation came, and I
had that. The reality is that fishing boats, particularly when they are in
remote fishing areas, will have bought their lubricants. However, you get a
combination of supplies and people down before you go fishing and they want to
change oil. Quite frankly, they get an opening and they will change their oil
and, let us say, it is their best intention to come back to it. Yet, when you
have to catch the fish, sometimes coming back to get your oil you have left in a
five-gallon drum is little bit further down the list.
The Chair: I guess anybody can use that for an excuse. The
reality is that you have to. That regulation is in British Columbia. We can make
all kinds of reasons why they cannot, but the regulation is that you should
deposit it in a safe container. Hopefully, that meets with everyone's mindset to
actually do that. I will leave it there.
Senator Mitchell: Are barges double-hulled?
Mr. Anderson: Some are. There may be a few that are not. I
am trying to think history-wise if that is true.
There is also a large amount of fuel and other refined products
that go back from the refinery — and aviation fuel, et cetera — between Puget
Sound and Washington State. Therefore, if there are any single-hulled barges —
The bigger issue is that I think they moved to double-hulled barges, but it is
not illegal to put an oil tanker truck on top of a barge and transit.
I do not know how many people are familiar with Port McNeil and
Robson Bight, where Leroy Trucking had a little incident and a barge went down
and spilled right in an environmentally sensitive area. They have been creative
in getting around the technical requirements for barging and doing something
that you just shudder.
Senator Wallace: Mr. Anderson, I wanted to clarify your
comment. You seemed to leave the impression that maybe there is confusion in the
Canadian requirements as to who is in charge in the event of a spill occurrence,
who is actually giving the direction. My understanding is that before any tanker
carrying oil can enter Canadian waters, the shipowner would be required to prove
that it has a contract with a response organization, and that that contract
clearly sets out who is responsible, who is in command and the spill response
capabilities that would be provided. That is my understanding.
If the Coast Guard felt at any time the response by the vessel
owner or the response organization was inadequate, then Coast Guard, as you
point out, could step in and take over. However, I just wanted to clarify. My
understanding is that under the Canada Shipping Act, it does establish who is in
command, who is responsible and who calls the shots.
Mr. Anderson: That is indeed how the Canada Shipping Act
works. If it worked exactly like it does on paper, we would have no need for
aerial surveillance to find those mystery spills where it is not clear. The
closer the oil spill occurs to a terminal or the vessels in transit or in port,
the system works really well. What you get is the potential for a large-scale
event where it may not be an oil tanker but an oil spill from another vessel and
you do not know the owner of it. Even though everyone has the paperwork, they
will deny knowledge of it. The Coast Guard then has to decide: Do we step in now
or spend more effort trying to find out who the legal owner is?
The Chair: Thank you, Mr. Anderson, for your presentation.
We appreciate your taking time out of your busy schedule to come here.