New “Special Conditions” Placed on TransCanada Demonstrate Regulatory Negligence During KXL South Construction

pipelinecutoutThis week the AP reported that the Pipeline and Hazardous Materials Safety Administration (PHMSA) slipped two new “special conditions” into Appendix Z of the State Department’s Environmental Impact Statement (EIS) for KXL North. For the past 5 years TransCanada has been bragging –ad nauseum– about 57 special safety conditions that it agreed to, hoping to give the impression that it cares deeply about the safety of KXL South. Well, even though 42 of these “special conditions” are no different than the existing federal minimum safety standards that apply to all pipeline operators (hence not special at all), after seeing TransCanada’s shoddy work in Oklahoma and Texas PHMSA now believes at least two more special conditions are needed. Here they are:

1. Keystone would develop and implement a Quality Management System that would apply to the construction of the entire Keystone XL project in the U.S. to ensure that this pipeline is –from the beginning– built to the highest standards by both Keystone personnel and its many contractors; and

2. Keystone would hire an independent Third Party Inspection Company (TPIC) to monitor the construction of the Keystone XL project. PHMSA must approve the TPIC from among companies Keystone proposes. Keystone and PHMSA would work together to develop a scope of work to help ensure that all regulatory and technical EIS conditions are satisfied during the construction and commissioning of the pipeline project. The TPIC would oversee the execution and implementation of the DOS-specified conditions and the applicable pipeline safety regulations and would provide monitoring summaries to PHMSA and Keystone concurrently. Keystone would address deficiencies or risks identified in the TPIC’s assessments.

The AP points to KXL South’s “horrible” weld rejection rates and the shocking number of excavations/repairs needed to fix the many dents, sags and damaged pipe coating as the rationale for why regulators have added these two new special conditions. An analyst sums it up in saying that PHMSA “was uncomfortable with the construction of Keystone south and that was part of their reasoning for imposing additional conditions on the northern leg.”

Of course Tar Sands Blockade is also uncomfortable with the construction of KXL South, for reasons well documented here and here (and pretty much everywhere on this website); however, we believe that the way this story is being talked about in the media completely sidesteps the important discussion of accountability for TransCanada’s shoddy work on the southern leg. So now that the south is screwed with this inadequate and dangerous pipeline, is tightening regulations to make the northern segment safer the only thing we should be talking about?

It is entirely unreasonable that PHMSA allows KXL South to stay online when it openly acknowledges systemic procedural flaws during the construction process. These two new special conditions should absolutely be viewed as PHMSA’s response to what it learned during the construction of KXL South. PHMSA is acknowledging that it has identified major procedural flaws that require immediate reform.

So let’s unpack the ‘lessons learned’ implicit in these new regulations. Firstly, if PHMSA is only now requiring that TransCanada “develop and implement a Quality Management System that would apply to the construction of the entire Keystone XL project,” the implication is that such a system was either entirely ineffective or did not exist at all when KXL South was built. Second, if a “Third Party Inspection Company” is necessary for sufficient oversight, but no such contractor existed when the southern leg was built, then this new condition is nothing less than PHMSA recognizing that it does not have the capacity to do the inspection/oversight work with which it was tasked.

Excerpt from PHMSA inspection of Keystone South Taken together, these two new special conditions indicate that during KXL South’s construction both TransCanada’s internal quality management and PHMSA’s external inspection program were inadequate, if not fatally flawed. Moreover, the failures implied by these new conditions beg the question: If TransCanada wasn’t adequately inspecting its own work, and PHMSA didn’t have the third party inspection company it needed for effective oversight, was anyone actually watching TransCanada?

Tar Sands Blockade was! And on January 9th, along with a coalition of impacted KXL landowners and other Texas organizers, we presented our findings/documentation of shoddy construction practices to a room full of PHMSA officials including both the Regional Director and the Operations Supervisor. PHMSA assured us that all the problems we referenced had been fixed, even though that assertion was based almost entirely on taking TransCanada’s word for it, not from field inspections conducted by PHMSA itself (which only occurred an average of 2-3 times per month).

Given the outrageous rate of weld failures and anomaly excavations, many people living along the pipeline route were demanding that the entire line be retested before it went into service. TransCanada installed the pipeline, conducted inline testing, found hundreds of problems, “fixed” them (without any verification process), and never conducted another inline test to prove those fixes were done adequately.

“Why is TransCanada, the company that constructed this pipeline across my farm held to a different quality control standard than the company that manufactured my car, or my laptop, or my breakfast cereal for that matter?” Asks Texas farmer Julia Trigg Crawford, who has fought TransCanada’s eminent domain claims all the way to the Texas Supreme Court. “Recalls and re-inspections are absolutely required when faults are found, and this troubled pipeline is no exception.  Keystone’s Southern leg should be shut down and fully retested before allowed to continue.”

Furthermore, TSB witnessed many safety code violations that occurred in the initial construction process, which are the direct cause of many of the failures caught by testing. Specifically, rocks in the ditches caused large dents. Dented pipe was replaced but the rocks remain in the ditches waiting to cause future dents. PHMSA also warned about  additional code violations related to inadequate support of the pipe and under-packed soil. This led to sagging, putting external stresses on the pipe and the welds. This pipeline is still inadequately supported and the soil has yet to be correctly packed.  PHMSA has stated it has no intent to follow up.


Picture of bad welds from inside the Keystone XL pipeline prior to being buried. Dec 2012.

The Regional Director’s response to all this, “We have faith in TransCanada’s program.” HA! Obviously the idea of faith-based regulation is ludicrous to begin with, but even more so, now that it’s clear PHMSA does NOT have faith in TransCanada’s process (implication of first new special condition), it’s left without any explanation as to why it will not consider shutting down KXL South, at least for retesting.

So here we are, months later, after being told by PHMSA that it will not ask TransCanada for additional inline testing because it has faith and trust in TransCanada’s process, only to find out that actually PHMSA believes an entirely new quality management process is necessary before TransCanada is allowed to build the northern leg.

Regulatory inaction has major implications for those living along the route of Keystone south. Do communities have to wait until there’s a major leak, perhaps a few destroyed waterways, before the problems with this pipeline are addressed? It’s time for PHMSA to move up and do the job it’s charged with, making sure pipelines are built safely and according to code, or not at all (preferably). The first step PHMSA should take is to turn KXL off and retest.

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