Pipeline Companies Have Their Own Pipeline Integrity and Regulatory Bodies That Govern Them Across Canada & USA. Learn Why This Is Important:
Supporting Pipeline Operators with their ESG Considerations and Programs
Driven by a growing global energy demand, the rise in expectations placed on the energy sector from industry regulators, the investment community and public has created an increased awareness and sharper focus on corporate responsibility and environmental stewardship. Stakeholders across the pipeline asset value chain have embraced this shift and aligned their business models to prioritize the development and refinement of their current sustainability programs in support of Environmental, Social and Governance (ESG) considerations.
Dynamic Risk supports pipeline operators to operate responsibly in a complex environment that demands greater agility, regulatory adherence, and digital competence. Our solutions enable our clients to better manage their pipeline asset infrastructure for increased safety, reliability, and the resiliency of our industry.
ESG considerations provide a broad framework with complex and interrelated components that Pipeline Integrity Management plays a key role within. The following focus areas within Pipeline Integrity Management provide direct value and improvements for our clients within Corporate ESG programs.
- Environmental Safety
- Reduced Environmental Impact
- Energy Transition
- Public Safety
- Stakeholder Communication
- Financial Performance
- Management Systems and Documentation
- Best-in-Class Asset Integrity and Reliability
- Pipeline Regulatory Compliance
- Consequence Analysis
- Enterprise Risk Management
US Regulations – PHMSA’s Gas Mega Rule
It is important that US Gas Transmission pipeline operators review the changes to PHMSA’s 49 CFR Parts 191 and 192 and adjust their integrity programs as necessary to achieve continued regulatory compliance. The final rule, which came into effect on July 1, 2020, mandates that Gas Transmission operators should assess their readiness and align their current in-place integrity management programs and operating practices to meet new regulations, the deadline for process and procedures due July 1st, 2021. At a minimum, an operator should develop a “PHMSA Mega Rule Response Plan” that includes four key focus areas outlined as follows:
1. Ensures that systems are in place to calculate and identify both HCAs and MCAs on an on-going basis, along with the supporting processes to capture and align pipeline right-of-way adjacent structures along with other pipeline attribute information.
2. Determines those pipeline asset segments that meet the applicability requirements of (§192.624) and develop processes and procedures to perform MAOP reconfirmation by July 1, 2021. In addition, operators should develop a MAOP reconfirmation plan, including a. Evaluation of optimum pipeline segment MAOP reconfirmation methods, and; b. The data management practices that will be used to capture and integrate MAOP reconfirmation information.
3. Determines pipeline segments that require material verification according to §192.607 and develop procedures for material verification in conjunction with analysis of predicted failure pressure during pipeline assessments §192.712. In addition, an operator should review the data management practices that will be used to capture and integrate material property information.
4. Ensures reporting and data management systems are in place to integrate data and perform analysis as a basis to confirm reliability, define and mitigate potential risks, and demonstrate compliance to the regulations.
Canada Regulations – CSA Z662 Regulations
The regulations in Canada are developed through technical committees within the Canadian Standards Association (CSA) where the regulators are significantly involved in the process. As such, the CSA standards are incorporated within both Provincial and Federal regulations and form the basis for the requirements.
Similar to pipeline operators in the United States, Canadian Transmission companies must ensure their pipelines are operating with accordance to the CSA standards to remain regulatory compliant. More recently, The Canadian National Energy Board (NEB) has also mandated that a company shall establish, implement, and maintain a management system that addresses all aspects of inter-provincial pipeline operation including risk and integrity management.
The CSA released the 8th edition of Standard Z662: Oil and Gas Pipeline Systems, in 2019. This most recent edition included a wide range of impacts on the energy industry with a combination of new and updated requirements. The 2019 standard itself identified 18 significant changes from the 2015 edition. These changes included, but not limited to, updated requirements for reuse of materials, trenchless installations, and revised wording that ensures alignment between various clauses and annexes within the standard, as well as alignment with other standards such as CSA Z245: Steel Pipe.
The key changes made that impact pipeline systems include the following:
- Class Location
- Designated Geographical Areas (DGA)
- Records Retention
- Engineering Assessments
- Dent Assessment Criteria
- Annex N (Guidelines for Pipeline System Integrity Management Programs)
Critical Role of Engineering Assessments for Pipeline Safety and Regulatory Compliance
The application of Engineering Assessments (EAs) has increasingly become a requirement in the pipeline industry to demonstrate fitness-for-service and appropriate safety margins to stakeholders, including regulators.
From a US regulatory perspective, PHMSA’s “Gas Mega Rule”, along with the migration from prescriptive to performance-based approaches, Operators will be required to apply EAs and Engineering Critical Assessments (ECAs) to maximum allowable operating pressure (MAOP) reconfirmation and remaining flaw assessments. From a Canadian regulatory perspective, Operators will continue to be guided by CSA Z662 requirements to apply Engineering Assessments for demonstrating safe pipeline operations.
However, compliance is only part of the picture as changes in corporate governance and public expectations demand improved safety and reliability. Without advanced engineering assessments, compliance efforts may lead to replacement of pipe that is otherwise-fit for-service, resulting dilution of resources, and missed opportunities to improve reliability and safety.
Dynamic Risk is currently partnering with industry leaders across the Transmission and Midstream industries throughout North America to lead the efforts and facilitate the development of programs and best practices that will provide pipeline operators with tools to implement regulatory requirements effectively and efficiently. Our network of subject matter experts is working collaboratively to develop programs and practices, that when implemented by the pipeline operators, will meet the requirements of the Gas Mega Rule and CSA class change provisions, and will create consistency in approaches.
US Gas Utilities and Distribution Regulatory Requirements
Since 2010, US federal regulations have required distribution pipeline system operators to have a Distribution Integrity Management Program (DIMP) and associated written integrity management plan. These regulations prescribe the elements of a DIMP and require pipeline operators to evaluate their DIMP every 5 years, at a minimum. State and municipal regulators can also mandate additional regulations and requirements for the gas distribution sector at their discretion.
The challenge for operators is having in-house expertise and knowledge of the requirements in developing and actively managing an effective distribution integrity management program (DIMP) and to remain compliant with the regulations. Since a DIMP is mandatory, operators must develop, manage, and periodically evaluate an integrity management program internally, or source and obtain external support. Whether an operator is large or small, each benefit from developing a robust integrity management program to regularly review risk assessments, remain regulatory compliant, mitigate impacts to the environment and ensure public safety and the company’s reputation.
An effective distribution risk program includes a forward looking, predictive approach and related mitigation strategies to increase system safety and reliability. Dynamic Risk assists Distribution operators in the following areas:
- Risk Management
- Integrity Management
- Management Systems and Operating Procedures
- Regulatory Support and Compliance
US Gathering Systems – Midstream Solutions
Safe and reliable operation of production and gathering infrastructure assets is vital to the upstream oil and gas industry. Upstream Asset Integrity teams are recognizing the need to have an improved understanding of their gathering systems and be aware of over-life threats, focus funds on at-risk assets, and better target mitigation and repair activities before a costly failure occurs.
Driven by factors including a changing technology landscape, new regulatory mandates and ever-increasing system data availability and resolution, it is increasingly apparent that effectively managing pipeline integrity data, and ensuring efficient integration and analysis, are key steps in transforming data to information, and to knowledge, to support decision-making.
Over the last several years, many operators have redefined their integrity programs and procedures to adhere to newly imposed industry regulations. For example, in 2018, the State of Colorado introduced specific reporting requirements with imposed audits for managing upstream pipeline assets. In addition, PHMSA is soon to release the third part of the Gas Mega Rule which will be specific to gas gathering systems.
We offer upstream operators unique and industry-leading gathering system integrity management solutions, including threat assessments that link infrastructure integrity to upstream well operations. Whether you are concerned with wells, pipelines, or production facilities we work with you to develop best-in-class integrity management plans, operating manuals and solutions that improve your system reliability and lower your operating costs.
Pipeline Safety – CSA Class Location Change
It is important for pipeline operators to ensure their existing assets adhere to the Canadian Standard Association (CSA) regulatory mandates with dedicated programs in place to support accurate analysis and insightful reporting. Scrutiny on pipelines, both within industry and from the public, continues to grow which underscores the importance for operators to ensure safe, efficient, and responsible operations of their pipelines.
A key area of consideration to support efficient and reliable pipeline integrity programs which meet the requirements of CSA Z662 include Class Location.
Class Location is defined as a geographical area that is classified according to its approximate population density as well as other characteristics that are considered when designing and pressure testing piping in a specific area. Essentially, it is a means of ensuring that the operating and design parameters of a pipeline are appropriate for the population density at every point along the pipeline route.
According to CSA Z662, class locations are divided into four different categories intended to reflect different levels of population density. The latest standards clause update in 2019 has increased safety measures and the parameters, including an increase to population density within specific categories, for operators to be regulatory compliant.
It is critical that pipeline operators have current and accurate class location information, especially where a recent change in the area surrounding the pipeline may trigger a change in class location, to ensure their pipeline assets are in line with CSA Z662 standards.