National Energy Board 2013 Safety Forum Report

Copyright/Permission to Reproduce

Table of Contents

Executive Summary

MountainsThe National Energy Board (NEB or the Board) continually looks for ways to lead by example when it comes to improving the safety of Canada’s energy infrastructure.

In May of this year, the Board clarified requirements of its regulated companies by amending the National Energy Board Onshore Pipeline Regulations. The amendments require management systems be in place for all aspects of a company’s regulated operations and include provisions that focus on a company’s senior leadership for accountability of its management system, the company’s safety culture and the achievement of outcomes related to safety and environmental protection.

The Board’s recent Safety Forum (Forum) in June of 2013 provided an opportunity for the NEB to advance critical topics around safety and environmental protection between regulators, the public and industry. The Board expects the same level of dedication from the companies it regulates and requires them to commit to ongoing improvements around the safety of Canada’s energy infrastructure.

Key topics discussed at the Forum included corporate leadership’s role in building and maintaining a safety culture, effectiveness of management systems and performance measurement’s role in risk management. Other areas explored included how industry can work to earn public trust, the role of energy sector leadership in safety, public expectations around transparency of information, and the evolving role of the regulator.

There was agreement that safety culture plays a significant role in the cause and prevention of catastrophic accidents, and that management systems are an essential complement and driver for a genuine corporate safety culture. Participants heard that safe outcomes are unlikely without the discipline required to measure and adaptively improve safety and safety culture. It was also clear that industry leaders have a fundamental role and responsibility to develop and sustain safety cultures in their organizations. They must continually engage in open dialogue and fight complacency.

The Forum confirmed there is more work to be done to improve safety and environmental protection outcomes. Participants heard the regulator has a role to play in providing the public with the information it needs to trust energy infrastructure is safe and protects the environment. It was suggested the regulator could also be more active in identifying and disseminating best practices. Finally, there was general agreement that the goal of zero incidents is not only expected, but achievable.

In this report, the NEB commits to concrete actions it will take in order to move industry, and itself, forward in achieving the goal of zero incidents. This includes:

  • Undertaking a public consultation on safety culture in order to develop a clear definition, attributes and indicators;
  • Developing guidance intended to improve the prevention of catastrophic events;
  • Improving how Canadians get the regulatory information they want and need;
  • Setting a path for continual improvement through collaboration with other regulators, and reporting on safety and enforcement tools the Board has recently implemented such as Administrative Monetary Penalties.

The Board will deliver on the first commitment from this report in October of this year by releasing its definition of safety culture for public consultation.

Introduction

The National Energy Board (NEB or Board) held its 2013 Safety Forum (Forum) on June 5th and 6th in Calgary, Alberta at the BMO Centre in Stampede Park. The Forum was a key action committed to by the NEB in its Action Plan on Safety and Environmental Protection 2011-2012.

Audience

It was intended to:

  • facilitate dialogue on the emerging issues identified and examined in the Board’s released discussion paper, Emerging Issues in Oil and Gas Safety Management (Discussion Paper);
  • stimulate an investment of effort on these emerging issues as part of continual improvement;
  • identify opportunities that both industry and regulators can take to improve safety outcomes; and
  • generate interest in additional means for advancing discussion and change following the Forum.

National Energy Board 2013 Safety Forum ProgramOver the course of this two day event, 20 high quality speakers ranging from Chief Executive Officers to subject matter experts, presented information through panel discussions and keynote sessions. The Forum was attended by 385 participants representing the public, Aboriginal peoples, industry, consultants, academia, government, National Energy Board representatives and youth.

Three main issues identified in the Discussion Paper, provided the context for the Forum’s presentations and discussions. These included:

  1. Building and Maintaining a Safety Culture
  2. Building Effective Management Systems
  3. Performance Measurement Role in Risk Management

Audience MemberThis report has been prepared by the Board to capture the main themes and key points discussed amongst and made by Forum panelists. The summaries that follow are representative in nature, and acknowledge recognition, agreement, and consensus among panelists as heard at the Forum. Feedback on the Forum from participants was also incorporated. In addition, the report provides information on what lays ahead for the NEB in continually improving how it works to protect Canadians and the environment through enhancing safety in the oil and gas sector.

The individual presentations for the Forum and the Panelists’ detailed responses to questions asked by participants relating to the issues from the individual session can be viewed at Presentations and Questions and Answers.

Caribou
Coastline

Safety Forum Opening Remarks

5 JUNE 2013

Gaétan Caron,
Chair and CEO, National Energy Board

Welcome to the National Energy Board’s 2013 Safety Forum. Thank you to all participants that have made it a priority to participate.

Gaétan Caron, Chair and CEO, National Energy BoardWe were pleased to see such a diverse group of participants and they included regulated companies and their associations, governments, regulators, landowner organizations, the Metis Nation of Alberta, the service industry, consultants, the upstream oil and gas sector and their associations, gas distribution companies, safety regulators from Canadian provinces, and academia. I am also excited to welcome youth to participate and contribute. We have here today representatives from Mount Royal University and the Southern Alberta Institute of Technology. They are the future leaders of our society. We can never begin instilling the critical importance of safety too early. This broad range of participants demonstrates that safety in the energy sector is a top priority for a large number of people, just as it should be.

This year has been one of change for the National Energy Board, further strengthening our regulatory mandate to achieve continual improvements in all areas of safety. The Jobs, Growth and Long-term Prosperity Act brought about key changes for the NEB including:

  • increasing inspections by 50 per cent
  • doubling the number of comprehensive audits; and
  • Administrative Monetary Penalties which will be in place by July of this year to promote safety and environmental compliance.

The year has also seen some challenges for industry:

  • Increased public scrutiny of major projects such as Northern Gateway, and Keystone XL;
  • Increased expectations of environmental accountability from the public; and
  • Growing concern over the safety of energy infrastructure.

“An industry-wide effort to achieve a strong safety culture will increase protection of the public, workers and the environment and at the same time help to build public trust in the energy sector and its regulators, a critical component to its continued success.”

FacilityAn industry-wide effort to achieve a strong safety culture will increase protection of the public, workers and the environment and at the same time help to build public trust in the energy sector and its regulators, a critical component to its continued success.

Key topics of the Forum included: safety performance measurement, effective management systems, and corporate leadership’s role in building and maintaining a safety culture.

Key topics of the Forum included: safety performance measurement, effective management systems, and corporate leadership’s role in building and maintaining a safety culture.

AudienceWe set out four key outcomes at the 2013 Safety Forum:

  • Facilitate a discussion on emerging trends and opportunities;
  • Promote an investment of effort on these issues as part of continual improvement;
  • Identify concrete actions that both industry and regulators can take to improve safety outcomes; and
  • Generate interest in additional means for further discussion and change following the Forum.

Management Systems

The NEB believes that carefully designed and well-implemented management systems are the best way for the energy sector to keep people safe and protect the environment.

Audience

Management systems are critical. The Board has recently amended its National Energy Board Onshore Pipeline Regulations to further clarify requirements for management systems.

Rumu Sen, Assistant Project Manager, Safety ForumManagement systems must now:

  • apply to the key company programs for safety, pipeline integrity, security, environmental protection and emergency management;
  • be in place throughout each phase of the lifecycle of the pipeline - from design, construction, operation and all the way through to abandonment;
  • include provisions that focus on a company’s senior leadership for accountability of its management systems, the company’s safety culture and the achievement of outcomes related to safety of the public and environmental protection; and
  • companies must have an internal reporting policy that will encourage employees to bring forward, without fear of reprisals, the hazards and risks that they may encounter during their work activities.

The management system approach will ensure continual improvement and will promote a lasting safety culture.

“When there is a strong safety culture, leadership focuses on safety as much as the bottom line, and employees have the confidence that they will be backed up from the very top of the organization if they stop or delay a project over safety concerns.”

Safety Culture

An effective safety culture is about more than just avoiding slips, trips and falls. Safety management is made up of several different strategies and activities designed to eliminate or reduce risk to the public, workers, the environment and assets.

Robert Steedman, Chief Environment Officer, National Energy BoardAn effective safety culture includes but is not limited to:

  • leadership commitment and adequate resourcing;
  • effective communication between employees and management about potential hazards in the workplace;
  • employee involvement in safety-related activities; and
  • processes and procedures to ensure continual improvement and learning from previous occurrences.

When there is a strong safety culture, leadership focuses on safety as much as the bottom line, and employees have the confidence that they will be backed up from the very top of the organization if they stop or delay a project over safety concerns.

A leadership commitment to safety will help to focus attention on prevention as the priority, and reduce incidents of all varieties.

The Way Forward

The Board believes a commitment to build and maintain a strong safety culture is key to achieving our target of zero incidents and, in turn, better protecting people and the environment.

This Forum is only the first step towards building a pervasive culture of safety across industry. The Board will keep working on the best means of achieving this as we move forward.

The Board has embarked on a journey to continually improve our requirements around all forms of safety. We expect our regulated companies to demonstrate a similar commitment to continually improving their safety culture in the months and years ahead.

Thank you once more for joining us as we and our esteemed panelists delve deeper into the key areas of performance measures, management systems and how we can build a robust and effective safety culture.

Session 1 - Keynote Speaker: Energy Infrastructure in the 21st Century - Earning Public Trust

Kimberley Turner, CEO
Aerosafe Risk Management

Session Summary

The opening session of the Forum provided insights on how the energy sector can work to earn public trust with a focus on emerging concepts in risk management. Ms. Turner offered participants the view that risk management should be systematic, and the thread that ties an organization, its people and structures to its environment and its objectives.

Kimberley Turner, CEO, Aerosafe Risk ManagementCorporate governance was defined as “systems by which organizations are directed and controlled.” Ms. Turner provided ways to establish a governance framework at the organizational level using compliance, assurance and risk management.

She described the importance of linking risk management into the governance framework, and applauded the trend of moving towards outcome-based or goal-oriented regulations versus regulations that direct companies to carry out a task.

Ms. Turner described risk as being the effect of uncertainty on objectives and provided some key points for the participants:

  • Link risk to organizational objectives - by doing this, risk becomes a business perspective related to governance and the direction of the organization;
  • Risk management is a set of coordinated activities to direct and control an organization’s activities to mitigate risk; and
  • Risk is a process containing key steps: establish the context, identify the risks, analyze the risks, evaluate the risks and treat the risks.

She described the importance of making risk management meaningful by establishing a hierarchy of integrated risk management processes. These included enterprise risk management, venture risk management, and operational risk management. Participants were given insight into how to set a framework of hierarchal risk management processes including governance, change management, and safety management systems.

To operationalize the governance framework, a model was provided of how to align philosophies, process and practice. This provided participants with an illustration of how to bring the concepts of governance, corporate services, corporate programs and operations together. Participants were told to look beyond the enterprise to industry and the broader business environment - the concept of “moving beyond compliance”.

A safety management system can be both reactive and proactive but needs to be encased in an accountability framework and plugged into decision-making and budgeting. The importance of integration with key organizational processes was stressed.

Ms. Turner laid out five steps to success:

  1. Adopt a risk-based approach.
  2. Connect with change management.
  3. Inject expectations of risk practices at different levels of the organization concurrently.
  4. Be clear around the underpinning philosophy - what is driving the practice?
  5. Motivate and educate.

Over the course of her session, Ms. Turner provided a number of frameworks and models to help participants conceptualize how risk management fits within an organization at the governance level, and how these models can help operationalize risk management.

Audience

Session 2 - Panel Discussion: The Role of Leadership

Moderators:

Bob Vergette, Board Member,
National Energy Board

Georgette Habib, Board Member,
National Energy Board

Panelists:

Ian Anderson, President,
Kinder Morgan Canada

Greg Ebel, President and CEO,
Spectra Energy

Russ Girling, President and CEO,
TransCanada Pipelines

Terrance Kutryk, President and CEO,
Alliance Pipeline

Al Monaco, President and CEO,
Enbridge Inc.

Session Summary

Terrance Kutryk, President and CEO, Alliance PipelineThis session was geared towards exploring key challenges and opportunities facing the oil and gas industry in the area of safety management. Safety management includes building and maintaining a safety culture, establishing effective management systems, and measuring safety performance.

Panelists recognized that organizational commitment is critical to the effectiveness of safety management systems and overall performance. Accordingly, participants heard the following points to be important:

  • Achieving strong safety performance begins with a commitment from senior executives and management;
  • Even the best commitments, policies, principles, and plans are nothing without follow-through;
  • Failure to live up to these expectations can diminish trust internally in the organization and externally with stakeholders;
  • Listening to the organization’s workforce is critical for strong leadership;
  • Organizations must fight the natural human tendency for complacency;
  • There is a need for a strong regulations, government programs and public involvement; and
  • Companies must empower employees and hold them accountable to ensure systems are processes are designed and implemented as planned.
Role of Leadership Panel: Ian Anderson, Greg Ebel, Russ Girling and Terrance Kutryk

The panelists discussed the importance of safety performance, and meeting the minimum expectation of the public in order to obtain, the public’s “social license” to operate in communities. Panelists discussed increasing societal expectations as a critical factor in achieving this. To obtain and maintain this license, panelists recognized that leadership is a key driver to ensure effective management systems and a strong safety culture.

Participants heard that safety must be a mindset and not simply an activity, and it was noted that companies cannot continue to produce energy or expand into new markets without being safe. Increasingly, the energy industry is being expected to clearly demonstrate that operations can be run safely, and there was acknowledgement that improvement in this area is needed.

The role of communication emerged as a key discussion point, along with its importance in effective safety systems. Comment was made that in order to be effective, priorities around safety need to be well-articulated. Leadership must build trust in a company through simple, consistent and relevant communications presented in a way the public can understand. The importance of both internal and external communication and how it can significantly influence the effective implementation of safety management systems and, by extension, performance was highlighted as key.

PowerlineAnother topic of discussion in this session was the role of assurance in safety. There was agreement that leaders need assurance the organization is performing to stated expectations. Collection of the right information to correct deviations from expected results, and ensuring there is appropriate follow-up and closure of action items is critical. The continual improvement of an organization depends on this confirmation.

A recurring theme throughout this panel discussion was the role of leadership and governance, and there was recognition among the panelists that leadership drives how the organization is governed. Governance impacts safety performance and effectiveness. Leadership must play a key role in establishing and maintaining good governance processes. This includes establishing clear roles and responsibilities for management on how good governance will be achieved. It was suggested that an incentive system can be an important driver for the right behaviours.

Participants heard the panelists reach consensus on the view that an organization’s target must be zero incidents. They indicated a stated goal of zero incidents allows employees to believe it is possible and this can positively influence corporate culture. Many organizations go relatively long periods without significant incidents, and so a leader’s role is to combat complacency and ensure the organization is looking at the right performance measures to better inform decision-making.

Having a goal of zero incidents was widely agreed as important for an organization to drive performance and effectiveness across its systems. Although agreed to as challenging, participants heard that a goal of zero incidents is critical and the oil and gas sector must be unwilling to accept anything less.

Looking to the future, the panelists agreed there were also several technical areas that could be improved.

Audience Member Asking a Question
Audience Member

Session 3 - Keynote Speaker: Pipeline Safety - A Shared Responsibility

Carl Weimer, Executive Director Pipeline Safety Trust

Session Summary

This session focused on the operation of the Pipeline Safety Trust (Trust), the United States’ only national, non-profit organization focusing on pipeline safety issues from a public perspective. The Trust promotes fuel transportation safety, and has achieved movement on several issues that have improved the safety of the industry including key regulatory changes in the United States.

Carl Weimer, Executive Director Pipeline Safety TrustMr. Weimer described in simple terms why the Trust is needed, and explained that industry needs strong regulatory oversight. His presentation provided information on the Trust, and its role in protecting people and the environment.

Pipeline safety was described as a shared responsibility, a three-legged stool where each leg supports the overall goal. He identified the public, local government, pipeline operators, and regulators as all having a role in improving pipeline safety and performance. He stressed the importance of these parties working together to share and be responsible through collaboration and transparency.

The speaker then delved into his views on the public’s expectation of industry, and what information the public expects to be readily shared. Participants heard that industry is not only responsible for interfacing with affected landowners, but is also responsible to the public at large, who are either directly or indirectly affected by the companies’ operations.

Specifically, Mr. Weimer identified public expectations for information on:

  • A company’s expertise and ability to keep pipelines safe;
  • Engagement with the public when they have questions;
  • Verifiable information so trust can be built;
  • How the cost of products for consumers is calculated; and
  • Fair restitution for any impacts as a result of products being transported.

Mr. Weimer noted that companies must also take into consideration that the public is comprised of various unique stakeholders who may have similar expectations, but who may also have significantly different approaches to perceived and real problems. Participants heard that these unique approaches may shape the nature of how the information is delivered.

In addition to what the public expects from companies, Mr. Weimer also explored what the public expects regulators to share. The expectations of regulators were almost identical to that of companies. Participants were offered the view that the public expects information on:

  • The regulator’s expertise and commitment to ensure pipelines are safe;
  • Engagement with the public when they have questions;
  • Verifiable information so trust can be built; and
  • Fairness in regulatory development and implementation.

Carl Weimer, Executive Director Pipeline Safety TrustMr. Weimer provided a detailed description of the Trust’s monitoring of regulatory transparency, based on the information available online from websites, and presented an assessment of the results. It was noted that the NEB and Energy Resources Conservation Board (now known as the Alberta Energy Regulator) could improve their relative standing in comparison to other regulators for degree of regulatory transparency. Specific areas for improvement include providing improved contact information for NEB personnel, enhanced maps, inspection records, incident data, enforcement data and increasing the navigability of its website.

In summary, the speaker reiterated the need for trust and collaboration, which is necessary to achieve improved safety and environmental protection. Participants heard that collaboration with stakeholders builds trust, but superficial efforts to sweep concerns aside or only offer “political spin” will undermine trust. He encouraged both regulators and industry to strive for a collaborative approach with the public through increased transparency and responsibility.

Participants heard that collaboration with stakeholders builds trust, but superficial efforts to sweep concerns aside or only offer “political spin” will undermine trust.

Pipelines
Woman and Child

Session 4 - Panel Discussion: Building and Maintaining a Safety Culture

Moderator:

Claudine Bradley, Technical Leader Safety,
National Energy Board

Panelists:

Bob Masterson, Vice President, Responsible Care,
Chemistry Industry Association of Canada

Mark Fleming, CN Professor of Safety Culture,
St. Mary’s University, Canada

Deborah L. Grubbe, Principal Consultant,
DuPont Sustainable Solutions

The NEB expects its regulated companies to promote a positive safety culture in order to effectively manage threats to safety. Overall, safety management is made up of several different strategies and activities designed to eliminate or reduce risk to the public, workers, the environment and assets. Safety culture initiatives identify and manage cultural influences that have the ability to either support or detract from this outcome.

The Board expects companies’ safety culture to apply to both worker health and safety, and process safety. Process safety focusses on preventing catastrophic incidents associated with the use of chemicals and petroleum products.

Session Summary

Bob Masterson, Vice President, Responsible Care, Chemistry Industry Association of CanadaThis session discussed the meaning of safety culture and the role corporate leaders play in building and maintaining a healthy one. Safety culture can be a challenging concept to define and differing perspectives were offered by the panelists. The session included numerous discussions, comments and questions about what is, and is not, included in the concept of safety culture.

Notwithstanding the various perspectives offered, participants heard the panelists agree on the view that safety culture is critical, and that, at a very minimum, a safety culture is comprised of identifiable behaviours, beliefs and attitudes that must constantly evolve, no matter the industry, or type of organization.

Deborah L. Grubbe, Principal Consultant, DuPont Sustainable SolutionsPanelists described safety culture in various ways. One panelist suggested safety should not be proclaimed as a “priority” as many organizations do, but rather it should be an intrinsic value that is a part of who we are, both as individuals and as organizations. Others described it as “what happens when no one is looking”. Panelists recognized that having a strong safety strategy in place is not enough. Even the best plan will fail if there is a poor safety culture. One panelist described this in plain terms: “bad culture eats good strategy for breakfast”.

Given that the tone for an organization around safety culture is set at the top, the panelists also explored the characteristics of effective leadership in this area. They discussed the specific traits that should be present in a strong safety culture. They noted that a continual effort to reduce risk is critical and recommended the adoption of a total system approach. Even with a system that addresses all the elements of safety culture in place, they noted chronic unease as an important cultural trait that can help drive safety performance.

Building and Maintaining a Safety Culture Panel: Bob Masterson, Deborah L. Grubbe and Mark Fleming

Panelists discussed the importance of findings from recent catastrophic incidents. In almost all of these case studies, participants heard that the organizations in question focused on the wrong signals and indicators, often using low worker injury rates as evidence of overall safety performance. This may have led the organizations in the case studies to miss the critical safety indicators that can actually predict organizational failures and incidents.

Measuring lost time injury rates and high frequency, low consequence events is important and provides valuable information to prevent future occupational health and safety incidents. In spite of this, research indicates these incidents do not accurately predict overall safety performance. An organization can go long periods of time without a major incident of high consequence, but that does not mean it is safe; it may simply mean it is lucky.

Bob Vergette, Board Member, National Energy BoardRecent catastrophic events have led to new insight on the need for improved oil and gas industry safety strategies. The Chemistry Industry Association of Canada (CIAC) faced similar challenges in past years. Today’s oil and gas sector may be able to draw on those experiences, particularly concerning how CIAC established and sustained an industry-wide safety culture initiative called Responsible Care®.

As with pipelines, the chemistry industry experienced some catastrophic events. It was offered that in the minds of both the public and regulators, these events served as an indictment of the industry as a whole. The lowest performer became the weakest link, so all companies were required to change - and be seen to change - their entire industry’s culture.

This cultural change involves every element of culture including: way of life, belief system, set of values, and public commitment.

Participants heard that there are several key elements of Responsible Care® which may be of use to the energy sector including:

  • Clear, written articulation of beliefs and attitudes;
  • Industry collaboration and sharing of best practices;
  • Established structures to ensure these best practices - and lessons learned - are shared on an ongoing basis;
  • Rigid process for internal and external auditing that goes beyond a traditional audit and becomes a judgment;
  • Providing the public with detailed performance data on a company-by-company and site-by-site basis; and
  • Both industry and the regulator promoting best practices.
Audience Member Asking a Question
Claudine Bradley, Technical Leader, Safety, National Energy Board

Session 5 - Panel Discussion: Building Effective Management Systems

Moderator:

Dana Cornea, Technical Specialist - Regulatory Development,
National Energy Board

Panelists:

Bonnie Andriachuk, Senior Director, Risk,
Compliance & Integrated Management, Enbridge Pipelines

Dr. Donald C. Winter, Professor of Engineering Practice,
University of Michigan

Ian S. Sutton, Chemical Engineer,
Sutton Technical Services

Joseph Hincke, Board Member,
Transportation Safety Board of Canada

Management systems set out policies, processes and procedures for the planning and execution of an organization’s core business to manage the safety of people and protection of the environment throughout the lifecycle of a pipeline system.

The Board expects a pipeline company’s approach to operations to be systematic, comprehensive and proactive in managing risks. This approach should be integrated into a company’s overall management system. The safety component of the management system should articulate the organization’s commitment and approach to safe operations throughout all aspects of its business.

Session Summary

Ian S. Sutton, Chemical Engineer, Sutton Technical ServicesRecent amendments to the National Energy Board Onshore Pipeline Regulations (OPR) in May 2013, increased emphasis on management systems that must apply to the key protection programs for which companies are responsible - safety, pipeline integrity, security, emergency management and environmental protection. Each of these programs are subject to the management system process requirements identified in the OPR, and must be fully integrated in order to anticipate, prevent, manage and mitigate conditions that have the potential to harm people, property or the environment throughout the lifecycle of a pipeline. The OPR also requires an organizational structure with clear roles and responsibilities to implement management systems, and a new requirement for an Accountable Officer.

This session set out to discuss how management systems have evolved alongside regulation, and a dynamic business environment that has increased in complexity over the last 15 years. Panelists were also asked to address the question of how management systems should continue to evolve in the future.

Building Effective Management Systems Panel: Dr. Donald C. Winter, Joseph Hincke and Bonnie Andriachuk

Gaétan Caron Asking a QuestionThe key learning for the session was that organizations must “institutionalize” their approach to safety management so that goals, policies, processes, practices, communications, and culture are consistent and integrated. Management systems must be explicit and comprehensive with standard operating procedures describing how work should get done as a critical component. They must recognize and accommodate organizational dynamics such as multi-contractor activities and regulatory requirements. Management systems also need to support both occupational and process safety objectives with consistent and ongoing backing from management.

In a successful management system, accountability is critical. Roles and responsibilities should be clearly identified and communicated. Once people understand what they must do, they must be held to account. Organizations, alongside specific professions, must take full responsibility to correct identified problems.

As the science of safety management systems evolves, it has moved from focusing solely on preventing slips, trips and falls to encouraging a culture of safety as the ultimate goal. Panelists noted that safety culture requires parameters for definition, a framework and measurement. Management systems were discussed as being designed around evolving concepts about risk management and safety culture. These two fields are believed to offer great potential for more effective safety management in the future.

Panelists indicated that being compliant to regulation or merely meeting government standards does not necessarily equate to operating safely. Regulatory compliance should be viewed as a starting point.

Building Effective Management Systems Panel: Joseph Hincke, Dana Cornea, Ian S. Sutton, Dr. Donald C. Winter and Bonnie Andriachuk

Hazard identification and risk management were widely discussed as being central to the safety management system concept. So-called near-miss incidents were identified as opportunities for organizational learning. Companies must examine these incidents to understand if there are any underlying, systemic issues that could provide learnings to prevent incidents of a similar nature in the future. Participants heard that it is important to understand that people will only report errors and near-misses if they feel supported by the organization.

NEB Inspector
NEB Inspectors

This session discussed many of the challenges of safety performance in relation to safety management systems in large organizations. Participants heard these challenges to include:

  • Difficulty of regulations to keep pace with advancements in technology;
  • Increasing overlap of prescriptive and non-prescriptive regulatory approaches;
  • Lack of risk analysis on mega-project failures;
  • Balancing competing priorities and managing risks; and
  • New approaches to safety management are required as traditional approaches (baseline regulatory compliance, reactive responses to incidents, and punitive philosophies) have failed to reduce incident rates.

Following the presentations, participants indicated a keen interest in further discussion on the concept of “weak signals” as they relate to safety management systems. Weak signals are data obtained from a system, which based on hindsight (identified typically during accident investigation) reveals obvious and relevant information for prevention of the incident.

Although identified as important information linked to the accident, participants heard that the weak signals were not perceived in advance as an issue or threat to safety. As a result, they were not adequately acted upon. These signals were described as human and organizational failures that weren’t seen coming, but should have been. This could include:

  • cases where the data was there but not appropriately interpreted or understood; '
  • local practices became ingrained;
  • adaptations of documented procedures becoming unapproved procedures; and
  • insufficient guidance in a management system on reporting hazardous situations.

The importance of listening for, and heeding weak signals, was stressed throughout the discussion, particularly since weak signals were identified as playing a key role in major incidents. The oil and gas industry should continue to identify metrics, indicators and other information sources to identify relevant data that can help prevent accidents. Establishing integrated management systems across functional areas of an organization can help assign meaning to the information and data.

Overall, the panelists agreed that a successfully implemented management system takes time. Unrelenting commitment, resources and perseverance are all necessary to get companies to where they need to be. It is about looking forward and then plotting a course to get there.

Session 6 - Panel Discussion: Performance Measurement Role in Risk Management

6 JUNE 2013

Moderator:

Alan Pentney, Technical Leader - Engineering,
National Energy Board

Panelists:

Carl Weimer, Executive Director,
Pipeline Safety Trust

Kimberley Turner, President,
Aerosafe Risk Management

Richard Piette, Manager Process Integrity,
Suncor Energy

Richard Jensen, Executive Vice President Operations,
Plains Midstream Canada

The NEB expects regulated companies to demonstrate a proactive commitment to continual improvement in safety, security and environmental protection, and to promote a positive safety culture as part of their management systems. Performance measures will aid in realizing both of these objectives.

Performance measures are a critical part of evaluating the effectiveness of management systems. Performance measures focus on improving the systems designed to prevent possible incidents, rather than only measuring pipeline defects after incidents have occurred. Companies can use the data from performance measures to trend and compare performance, as well as to facilitate continual improvement and management of risks associated with pipelines.

Session Summary

Richard Jensen, Executive Vice President Operations, Plains Midstream CanadaPerformance measurement is a means to identify deviations from planned approaches and strategies.

This panel was tasked with exploring to what extent personal safety indicators should be relied on as a measure of operational or process safety, as well as best practices relating to operational safety indicators. The session provided comprehensive discussion surrounding metrics and indicators. Leading and lagging indicators including were also described in depth.

Throughout the session, panelists stressed the importance of deciding what performance should be measured and why. This could include metrics for measuring the company itself, the regulator or public perspectives. Participants heard that measures must inform the vision and purpose of the organization including goals and objectives. Effective performance measurement equips an organization to measure, record, document, and communicate risk information to key audiences.

Measures should also provide a picture of the extent of implementation of philosophy, process and practices of risk management. Leading metrics were described as those that are forward-looking. They indicate the performance of the key work processes, operating discipline, and layers of protection that prevent incidents. Conversely, lagging metrics were described as looking at past performance. Both leading and lagging metrics are valuable to an organization particularly when correlated and interconnected through analysis.

Leading and lagging metrics are critical to an organization. Without metrics, an organization is operating in metaphorical blindness. There is also a lessened ability to determine if an organization’s current path requires correction due to evolving factors or incorrect initial assumptions.

Performance Measurement Role in Risk Management Panel: Kimberley Turner, Richard Piette, Richard Jensen and Carl Weimer

The panelists indicated that there are currently no standard leading indicators for industry to follow. A set of standardized indicators would assist companies in knowing where to focus their efforts for improvement. Some indicated they wanted regulators to take the lead on developing these metrics.

Richard Piette, Manager Process Integrity, Suncor EnergyAccording to one panelist, the public has been clear on the kind of information it expects from pipeline companies and regulators. As offered to participants, the public expects companies and regulators both to measure and to freely make available:

  • Specific pipeline locations;
  • Pipeline attributes such as the product(s) being carried, diametre, pressure of contents, wall thickness, depth of cover and age;
  • Health-related data including general risks with more specific information available after a release has occurred;
  • Risk associated with pipelines generally;
  • Local risks where they live and work;
  • Safety performance information on particular companies;
  • Regulator effectiveness; and
  • An assessment of the safety of proposals.

It was recommended that oil and gas companies take particular note of these expectations as increased transparency in these areas will aid in earning back public trust. Transparency efforts would be best focused on actions companies are taking to correct deficiencies, in addition to areas where they are already excelling.

Solar Panels

Session 7 - Panel Discussion: Regulators’ Role, Responsibilities & Opportunities

Moderator:

Patrick Smyth, Business Leader - Operations,
National Energy Board

Panelists:

Jeff Wiese, Associate Administrator for Pipeline Safety,
US Department of Transportation Pipeline and
Hazardous Materials Safety Administration (PHMSA)

Ken Paulson, Chief Operating Officer,
BC Oil and Gas Commission (BC OGC)

Tom Pesta, Senior Advisor - Pipelines,
Alberta Energy Regulator (AER)

Iain Colquhoun, Chief Engineer,
National Energy Board

Session Summary

Patrick Smyth, Business Leader - Operations, National Energy BoardIn this session, panelists representing oil and gas industry regulators from Canada and the United States delved into the role, responsibilities and opportunities to effect continual improvement in pipeline safety. This included:

  • the regulator’s role in stimulating the development and maintenance of safety culture;
  • effective management systems and safety performance measurement; and
  • possible opportunities regulators could pursue in seeking continual improvement.

One of the themes that emerged over the course of this discussion was the need for regulators to balance both prescriptive and performance-based regulatory requirements. Performance-based requirements enable a regulator to set the bar and then allow companies to determine the best way to achieve the requirements. This strategy works well when developing a company-specific system. At the same time, regulators realize that in some areas, such as the construction of pipelines, prescriptive standards are appropriate. One panelist pointed out that the use of standards requires professional judgment. Using judgment will promote shared responsibility and the development of high quality standards over the long run. One way regulators are dealing with this is to utilize consensus-based industry standards such as the Canadians Standards Association (CSA) Z662-11 which outline the minimum safety requirements for oil and gas pipeline systems.

Regulators’ Role, Responsibilities & Opportunities Panel: Iain Colquhoun, Patrick Smyth, Ken Paulson, Tom Pesta and Jeff Wiese

The panel recognized that there was a trend towards increased transparency around the safety performance of regulated companies. Public sharing of regulatory assessments and audits will help to provide confidence that specific requirements are being met and advance baseline information around pipeline safety. Holding companies accountable for the impacts of their actions is also necessary for the industry to advance its performance, and for regulators to earn public confidence and trust.

As regulators move towards clarifying the concept of safety culture, it was noted that process safety and occupational safety should not be competing interests in regulated companies or in regulation. Management systems, culture and leadership should be integrated and act together in an organization to drive safety performance. One panelist suggested regulators should focus on measuring compliance to requirements and encourage better safety culture through the promotion of management systems, requiring self-audits, requiring declaration of leadership commitment and establishing goals. No matter the tactics chosen, safety needs to be the number one priority in order for an organization to ensure it is able to meet its commitments and maintain a strong safety culture.

A challenge all regulators faced was clearly communicating with the public what regulators were responsible for, and what areas fell outside their legal jurisdiction. One of the panelists highlighted that while they oversee the operation of pipelines, they do not operate them directly, something that may not be well understood. Regulators need to continue to work on building a stronger understanding with the public around whom they are and what they do. This includes helping communities to better understand the risks associated with pipelines and also the required capabilities of both companies and regulators including emergency response and environmental protection.

NEB Inspectors

Looking towards the future, the panelists agreed that a more proactive approach is required to usher the pipeline industry to the next level of safety. Many ideas were presented as potential opportunities for regulators to pursue continual improvement including:

  • companies increase use of third party audits to remove the perception of bias and to provide assurance that companies are performing to expectations;
  • striving for zero incidents as the goal of industry and regulators in order to lay the foundation for a strong safety culture;
  • moving beyond simply having strong safety management plans to effective, organization-wide implementation; and
  • national coordination of development and maintenance of petroleum and natural gas industry standards by regulators.
NEB Inspectors at the top of Woody Point

Safety Forum Overview and Summary

Robert Steedman, Chief Environment Officer, National Energy Board

Over the course of Safety Forum 2013, a number of themes were identified:

Pipeline Construction Site1. Power of words and leadership

Participants heard that behaviourial change is essential for the development and maintenance of safety cultures. Leaders must engage in open dialogue, “walk the talk” and fight complacency. We should also keep in mind that safety should be a value not just a priority and that “bad culture eats good strategy for breakfast”.

2. Safety culture

Participants heard that public trust in the pipeline industry has eroded and that industry must endeavor to build it back up. We discussed the meaning of safety culture and its importance in building public trust. We heard that safety culture plays a significant role in the cause and prevention of catastrophic accidents and companies must evolve to become High Reliability Organizations.

3. Power of management systems

Participants heard general agreement that safety management systems are a proven way to anticipate, manage and mitigate risk. They are also an essential complement and driver for a genuine corporate safety culture. Participants learned that undetected safety threats may reveal themselves through weak signals, known as leading indicators, if you know how to look for them. Self-audits are essential and also required by the NEB.

4. Safety and safety culture can and must be measured

Participants heard that safe outcomes are unlikely without the discipline required to measure and adaptively improve safety and safety culture. While most speakers indicated that the goal of zero incidents is achievable and should be the target, participants heard some confusion over how to get there.

5. Role of regulator

According to the various regulators, participants heard that technical expertise is essential and must be maintained in order to be effective. Further, the regulator has a role to play in providing the public with the information it needs to trust energy infrastructure is safe and protects the environment. Finally, the regulator could be more active in identifying and disseminating best practice.

Closing Remarks

Gaétan Caron, Chair and CEO, National Energy Board

Gaétan Caron, Chair and CEO, National Energy BoardWhen we prepare for something, we visualize. We imagine what could happen. Sometimes people include worst-case scenarios. I am one of those people. We also visualize what the ultimate image of success will look like.

This is the image I see at this moment in time. About a year ago, we announced a Safety Forum. We published a discussion paper. We spoke with carefully selected panelists several months before the Forum. Many NEB staff members organized the logistics related to a major event such as this one. All of this has brought us to where we are today.

I am still processing what happened in the last day and a half. I think we will all need some time to fully realize what happened - its meaning, its impact. But already I am certain that we achieved a quantum leap here. For instance:

  • broad consensus from both industry and regulators that our target is zero incidents;
  • broad consensus that management systems, safety culture, and measuring pipeline safety performance are three very valid lenses through which to address the fundamentals of pipeline safety; and
  • continual improvement is essential.

In the end, actions will speak louder than words. This is why we included section three in the feedback form asking people what actions they will personally take as a result of the Forum.

I encourage you to take action, even if it is not a major action. If every one of us takes one action, and encourage someone in our workplace to also take an action, soon there will be thousands of actions being taken to continually improve pipeline safety.

What action will the National Energy Board take as a result of the Forum? First, we will keep going in our journey. We will implement the new tools we have been given recently, for instance, use wisely the financial resources we have been given to increase the number of audits and inspections, begin to implement our administrative monetary penalties, and promote our recently updated National Energy Board Onshore Pipeline Regulations, in particular, the more specific requirements related to management systems.

Equally critical, we will continue the important conversation started over these two days on how we can improve safety in Canada’s energy sector. I see scope for a continual dialogue, in a form, at a frequency, and on topics that will allow you to improve safety outcomes. In that respect, please provide us with your thoughts on how the National Energy Board can best support you in the future, in your own journey towards continually improving safety outcomes. Please use the feedback form for that. The Board members, our staff and I will read and provide responses to all of your comments. Your comments will inform our decisions on what concrete actions need to be taken.

Thank you to all the many NEB staff members who have made this Forum a success. Also know, the success of this Forum is your success, as speakers and participants. The National Energy Board thanks you once again for your participation.

Safety Dialogue - Next Steps

The National Energy Board Action Plan on Safety and the Environment (Action Plan) was launched in 2011. Key components of the Action Plan involved the National Energy Board taking a leadership role on safety and environmental protection issues. All components of the Action Plan have now been completed including the 2013 Safety Forum, as captured in this report.

It is now time, in the Board’s view to capitalize on the momentum generated by the Forum and identify next steps on emerging issues in safety and environmental protection.

Getting to Zero Incidents

NEB Inspector on SiteThe NEB confirmed at the Forum that a goal of zero incidents is not only the right goal but also an achievable goal. With strong, well-implemented management systems and a safety culture that permeates every aspect of the organization, incidents are preventable. Accordingly, the NEB will take the following actions to move industry, and itself, forward in achieving that goal.

  1. Building and maintaining safety culture
    1. Release a draft safety culture definition, attributes and indicators for public consultation
    2. Publicly report on outcomes and trends identified from management systems compliance verification including safety culture indicators
    3. Develop an action plan to improve safety culture development and sustainability
  2. Preventing catastrophic events
    1. Develop guidance on the identification and management of human and organizational factors, including those related to team performance that contribute to major incidents
    2. Develop guidance on related safety performance indicators
  3. Building knowledge and public awareness
    1. Improve regulatory information available to Canadians
      1. Public consultation on regulatory information needs
      2. Develop a plan to revise regulatory information available to the public
    2. Develop guidance for industry transparency with its stakeholders
  4. A path for continual improvement
    1. Monitor and publicly report on implementation of the Administrative Monetary Penalties Regulations (National Energy Board)
    2. Collaborate with other regulators with the objective of aligning requirements for management systems and performance measurement

The Board will release a draft safety culture definition, attributes and indicators for public consultation in October 2013.

Hearing
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