LET’S TALKPIPELINES

REAL CONVERSATIONS ABOUT CANADA’S ENERGY INDUSTRY

CEPA I 1

WHAT DOES OUR ENERGY

FUTURE LOOK LIKE?

DISCUSSING THE ROLE OF TRANSMISSION PIPELINES IN CANADA

This symbol lets you know where you can find more information about a specific topic. And you can always visit www.aboutpipelines.com to learn more about the transmission pipeline industry.

Pipelines are part of a complex, emotional issue that stems in large part from our level of comfort with fossil fuels altogether. We’ve seen the damage that can result when things go wrong. And we worry about the impact these resources have on our planet, our communities and our children’s futures.

On one hand, we recognize the need for oil and gas products to sustain the lifestyles we have, and understand that they are a big part of our economy. But on the other hand, we’re deeply concerned about the safety of our communities and our environment.

For many, a move to renewable energy sources can’t come soon enough, yet we’re

firmly entrenched in the energy infrastructure – and consumption habits – of the past.

SO, HOW DO WE MOVE FORWARD?

While there may be many possible solutions out there, each must be carefully considered and take into account all perspectives and voices.

That’s where this book, the pipeline industry, and you come in – we need to know where we stand today and how we are making improvements for the future. We are all an important part of the conversation.

There’s a lot of talk about transmission pipelines, but what’s actually true? And what should we believe?

Most of us have a lot of unanswered questions, as well as some pretty strong opinions.

OUR CHANGING CONSUMPTION HABITS

Canada’s energy consumption has changed over the years but we’re clearly still firmly entrenched in the energy infrastructure – and consumption habits – of the past.

Hydroelectricity 2006/2015:25.3/26.3% Coal 2006/2015: 9.6/6.0% Nuclear 2006/2015: 6.4/7.2%Natural Gas 2006/2015:27.2/27.9%Oil 2006/2015: 30.8/30.4%Renewables 2006/2015: 0.7/2.2%Source: BP Statistical Review of World Energy – June 2016

Valerie Roy is the CEO of the Atlantic Chamber of Commerce and a member of CEPA’s External Advisory Panel (EAP). As an EAP member, she listens to what people in her area think about pipeline projects and shares insights with the pipeline industry.

Q&A WITH VALERIEROY: WHAT ARE YOU HEARING FROM PEOPLE IN YOUR AREA?

The pipeline industry is not trusted; people are concerned about spills and the environment, and particularly in our region – water resources. They don’t know who is responsible and who will pay when things go wrong.

WHAT SHOULD THE INDUSTRY DO ABOUT THESE CONCERNS?It comes down to communication, very early on – ‘what are the facts regarding this industry?’ [Many] people don’t know the facts – they might see a headline in the newspaper, but the general public isn’t in the [pipeline] business, so they really don’t have all the information.

The industry needs to explain what it means when they say they’re going to build a pipeline – where is it going to go, what are the safety factors during construction? And once the pipeline is constructed, what are the ongoing safety factors, monitoring, emergency preparedness, etc?

WHAT HAPPENS WHEN THESE IMPORTANT CONVERSATIONS DON’T HAPPEN?When there isn’t consultation, what we have is we have ‘no.’ We don’t have ‘maybe,’ we don’t have ‘let’s work together and collaborate to address the issue,’ people just say no. And if there’s too much opposition, the government will eventually just say no as well.

Pipelines are important to the Canadian economy as trade-enabling infrastructure; we need them to get our resources to new markets, but we need to ensure all voices are heard in the consultative process.

DO YOU FEEL THE INDUSTRY TRYING TO IMPROVE?The industry wants to be ahead of regulations, and the CEPA Integrity First program will help the industry to raise the bar on their operations, collectively. It’s about focusing on the areas people are concerned about as well as some they might not be thinking about – such as worker safety. A successful Integrity First program will go a long way in helping to gain trust and social license for pipeline operators.

HOW COULD THE INDUSTRY IMPROVE ITS RELATIONSHIP WITH CANADIANS?Relationships are about people, and sometimes there’s a role for information pieces, a role for social media. But at the end of the day you can’t beat face-to-face. I think people need to become more familiar with the faces behind the industry and hopefully that will lead to a greater level of trust.

“We’re in a transition period where we need all types of energy to be working for us to make the economy go and to provide the energy we need as a population.”

VALERIE ROY CEO of the Atlantic Chamber of Commerce, located in Moncton, New Brunswick, and a member of CEPA’s External Advisory Panel.

2 I Speaking to Canadians About Pipelines CEPA I 3

IT’S THE NEW

MILLENNIUM. DO WE

ACTUALLY NEED PIPELINES

ANYMORE?GETTING THE ENERGY TO MEET

OUR DAILY NEEDS

We live in a huge, northern country with lots of remote places, and the typical Canadian lifestyle

uses up a lot of energy.

Even as our thinking and habits become more focused on reducing our energy demands by becoming more efficient, making the transition to cleaner energy sources takes time. More than half of our homes are heated with natural gas, and nearly all of our transportation energy comes from refined petroleum products.

Many of the products we use daily – plastics, pharmaceuticals, chemicals and lubricants – also come from petroleum.

While we may still rely on fossil fuels for some time, what we can control now is how we safely transport them from place to place.

Did you know that pipelines are the safest, most efficient method of transporting energy products?

2/3+More than two-thirds of Canada’s energy demand is met by natural gas or products made from crude oil.

Pipelines are regulated throughout their entire life to ensure that people, communities and the environment are protected.

1

PLANNING IT TAKES A MULTI-DISCIPLINARY TEAM

Engineers, environmental consultants and other experts collaborate on a comprehensive project plan, evaluating a variety of safety, environmental and technical factors. Planning can take years.

2

APPLICATION IT’S A RIGOROUS PROCESS

Operators must go through a rigorous regulatory approval process, including approval of the pipeline route. They also get input from landowners and other stakeholders.

3

CONSTRUCTION THERE’S MORE TO IT THAN WELDING

If the pipeline receives regulatory approval and land agreements and other permits are put in place, construction begins. Operators take care to preserve vegetation, protect waterways, and construct the pipeline to be strong and safe, while ensuring all codes and regulations are adhered to. After construction, operators return the land to a condition as close to pre-construction as possible.

4

OPERATION AND MAINTENANCE MONITORING 24/7 IS VITAL

Once the pipeline is operational, it’s monitored via 24/7 remote monitoring and control systems, drones and inline inspection tools. Pipelines are regularly inspected and maintained – both inside and outside. Operators have specific emergency response plans in place to ensure they are ready to respond to an incident. They also have public awareness programs to prevent third-party damage to pipelines from construction or agricultural activities.

5

RETIREMENT PIPELINE SAFETY NEVER STOPS

Pipeline companies must ensure their operations remain safe for the public and the environment, even if a pipeline isn’t being used anymore. Operators follow procedures from the applicable regulator to remove a pipeline from service. The regulator will assess whether it is best to leave the pipeline in place or remove it from the ground. Even when retired, the pipeline will be continually monitored by the pipeline operator.

BUT HOW SAFE

ARE PIPELINES, REALLY?

TAKING A CLOSER LOOK AT SAFETY MEASURES

For CEPA members, a 99.999% incident-free record is not good enough.

Safety is the focus at every stage of the pipeline lifecycle - pipelines are designed, built and operated

to be safe, reliable and sustainable.

While its safety record is excellent, the transmission pipeline industry recognizes it can always make improvements to its operations.

That’s why members of the Canadian Energy Pipeline Association (CEPA) are focused on improving industry performance and meeting stringent regulations. With a 99.999% incident-free record, pipelines are Canada’s safest means of transporting energy.

But even 99.999% isn’t good enough. The industry is constantly working to improve pipeline safety, with advancements in science and technology translating into better pipeline design, construction and durability.

This includes special pipeline coatings for preventing corrosion (a key cause of spills), monitoring technology that detects weakening metal within pipes and remote monitoring and control systems that alert technicians to issues, 24/7/365.

Even with all of these safety improvements, incidents do happen. And while they’re rare and have little impact – on average only five litres of oil and gas were spilled per 1,000,000 litres transported since 2002 – they’re all responded to and taken seriously, as the industry works toward a record of zero incidents.

THE PIPELINE

LIFECYCLE

END

RETIREMENT5

OPERATION AND MAINTENANCE

4

CONSTRUCTION3

APPLICATION2

PLANNING 1

START

CEPA I 5

CAN WE USE ROAD AND RAIL

TRANSPORTATION INSTEAD?

CONSIDERING THE ALTERNATIVES

>> A train would have to be 4,200 rail cars long to transport the 3 million barrels of crude oil transported by pipeline in Canada every day.

>> Did you know there are 119,000 kilometres of transmission pipelines in Canada? Laid end to end these pipelines could circle the earth three times.

Valerie Roy, a member of CEPA’s External Advisory Panel, says Canadians are concerned about pipelines crossing bodies of water. That’s why CEPA members closely monitor their watercourse crossings 24/7.

Canada is vast, and we must ship energy across long distances to reach the people who need it.

Above-ground alternatives to transmission pipelines like trains and tanker trucks are used in the oil and gas sector, but they’re not as cost-effective or reliable as pipelines over long distances. It would take 15,000 tanker trucks a day to move the same amount of oil Canadian pipelines deliver daily, creating a lot more congestion on our highways.

Underground pipelines require significantly less energy to operate and have a much smaller carbon footprint than road and rail transportation. That’s why pipelines are a preferred choice for reducing the impact transporting oil and gas has on our environment.

97% of Canadian natural gas and crude oil production is transported by transmission pipelines.

>> The volume released from CEPA members’ liquids pipelines in 2015 was 16 barrels, which is equivalent to 2.5 cubic metres.

Canada’s transmission pipelines companies operate 119,000 kilometres of pipelines in Canada.

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6 I Speaking to Canadians About Pipelines CEPA I 7

DO PIPELINE OPERATORS

PROTECT THE ENVIRONMENT?

UNDERSTANDING THE IMPACT ON ANIMALS, PLANTS AND WATER

Our country is not just beautiful, it is also home to a diverse array of animals, vegetation and aquatic

life that need to be protected.

We know that building a pipeline has some kind of effect on the surrounding environment, so the aim is to significantly reduce that impact through stringent environmental regulations and best practices that govern pipeline construction.

Every pipeline has its own environmental protection plan that’s unique to the animals, waterways and vegetation in the area.

For animals, this includes identifying sensitive species, adjusting the timing of construction to avoid nesting and breeding seasons, doing follow-up studies to see how animal behaviour is affected and taking action to correct any changes.

With waterways, studies are done to determine the safest location for the pipeline. Pipelines especially designed for operation in water are used, banks and slopes at crossings are monitored to make sure they remain stable, and the flow of product in the pipe is carefully observed, 24/7.

Vegetation is also assessed, biosecurity practices are used to avoid introducing

invasive species and construction schedules may be adjusted to avoid growing seasons. After construction, the original soil is replaced, vegetation is replanted and the right-of-way re-seeded.

And in all cases, pipeline operators must restore the land to as close as possible to its original condition.

By following these guidelines and constantly improving how things are done, pipeline operators have vastly improved their processes and significantly reduced the impact of their operations.

WILDLIFE MANAGEMENT

Where pipelines could impact sensitive species, such as caribou or migratory birds, specific mitigation and monitoring plans are developed to further minimize the direct and indirect effects on their populations.

IMPACT ON VEGETATION

During the construction phase of a pipeline, plant life will be temporarily disturbed, but operators work hard to

limit any disturbance – generally the area is fully recovered within five years.

WATER CROSSINGS

CEPA members combine safety, engineering and environmental expertise to operate pipelines through waterways and near aquifers. They protect the waterway and surrounding habitats and environment at each stage of the pipeline lifecycle.

Learn more about the work CEPA members are doing to protect the environment at www.aboutpipelines.com/en/environmental-protection/

BENEFICIAL AND CRITICAL RELATIONSHIPS

CEPA members develop long-term, mutually beneficial relationships within communities by focusing on job creation, using local businesses when possible, and providing tax revenues. For example, in 2015, CEPA members spent $4.8 billion purchasing goods and services in local communities along our pipeline routes. Members are specifically working with Aboriginal communities

and governments to improve their participation in the consultation process and increase the economic benefits they receive from pipeline construction and operation.

WHAT ABOUT

COMMUNITIES THAT ARE

AFFECTED?ENGAGING STAKEHOLDERS

IN THE PROCESS

It’s about respectful two-way, constructive engagement with Canadians.

Pipelines are in communities all across our country and have been for over 60 years, so operators have a huge responsibility to ensure they are safe and secure. And people within these communities are understandably concerned about how pipelines will affect their quality of life.

So before any pipeline projects are built or expanded, operators must first learn about the potential impact it could have on the community. They meet with a variety of different stakeholders to gather information about the needs, issues and opportunities a project may create.

But this is just the beginning of the conversation – pipeline operators engage with stakeholders at each stage of the pipeline’s lifecycle, to ensure all concerns and perspectives are considered.

By being transparent, minimizing any negative impacts and maximizing positives like job creation and tax revenues, pipeline operators maintain an open dialogue with, and seek positive results for, communities.

You can read more about these initiatives at www.aboutpipelines.com/en/in-your-community/

Before a pipeline project is built or expanded, operators must first learn about the potential impact it could have on the community.

IMPACT ON THE COMMUNITY

TECHNICAL ENGINEERING INFORMATION

ECONOMIC BENEFITS

SAFETY & ENVIRONMENT

8 I Speaking to Canadians About Pipelines CEPA I 9

Get the details on the work CEPA members are doing to address climate change at www.aboutpipelines.com/en/environmental-protection/climate-change/

Canada’s transmission pipelines are responsible for one per cent of the

country’s total emissions.

Climate change is a huge concern for everyone. To address this issue, CEPA members have climate change and environmental sustainability programs in place, and continuously adopt new best practices, programs and technology that limit or reduce greenhouse gas (GHG) emissions.

Natural gas pipeline operators are also working to reduce GHG emissions from their pipelines in three critical ways – by reducing the use of fossil fuels on compressor stations, limiting methane releases during pipeline maintenance and finding and repairing small leaks.

THREE WAYS CEPA MEMBERS ARE ADDRESSING CLIMATE CHANGE

ONE

Cause: Compressor Stations Solution: Replacing old compressor-station equipment with energy-efficient technologies to reduce their use of fossil fuels

TWO

Cause: Venting Solution: Using technologies that divert or capture methane during maintenance

THREE

Cause: Fugitive Emissions Solution: Employing portable gas or ultrasonic detectors to find small leaks in pipes so they can be pinpointed and repaired more quickly

HOW ARE PIPELINE COMPANIES

ADDRESSING CLIMATE

CHANGE?REDUCING GREENHOUSE

GAS EMISSIONS

HOW ARE PIPELINES REGULATED?

WHO ENFORCES

THEM? FOLLOWING REGULATION,

STANDARDS AND BEST PRACTICES

Canada has one of the most highly-regulated pipeline industries in the world.

Pipelines are governed by regulations that cover their entire lifetime – from design and construction, through operation and maintenance, and eventually to retirement.

These regulations are created by provincial or national regulators (depending on where the pipeline operates), based on standards by the CSA Group (Canadian Standards Association) and other government organizations. Regulators ensure pipelines are inspected and audited regularly, and operators are held accountable for their safe operation.

Regulators can also severely penalize pipeline companies that don’t comply with their standards. These penalties can include revoking authorization for projects, fines, halting or restricting operations, and even criminal charges.

Learn more about pipeline regulations at www.aboutpipelines.com/en/safety/regulations-and-approvals/

GROUND RULES

The safety mandate for federal and provincial pipeline regulatory bodies encompasses three main areas:

1. PUBLIC INTERESTDetermining if the pipeline project is in the public’s best interest

2. REGULATION

Ensuring pipeline operators are accountable for safe operation

3. COMPLIANCE

Inspecting and auditing pipelines over their lifecycle

CEPA members have trained crews standing by to respond quickly with oil spill containment and recovery equipment (called OSCAR units) to contain the leak.

During an emergency exercise, command centres are set up to practice enacting proper response procedures.

Emergency response exercises cover a variety of emergency situations, including spills in water.

When it comes to safety, CEPA member companies cooperate. They realize any incident – large or small – hurts the credibility of the entire industry.

HOW DO PIPELINE OPERATORS PLAN FOR

EMERGENCIES?PLANNING FOR THE UNPLANNED

One of the most important safety measures the industry has in place is being prepared for an emergency.

The first step is preventing releases from happening in the first place. Pipeline operators protect the pipeline against corrosion, do regular maintenance and surveillance, conduct thorough inspections, and monitor the entire system from sophisticated control centres.

Pipeline operators also have comprehensive emergency response plans in place, and conduct regular emergency response exercises – in both summer and winter, and for both land and water incidents – to ensure the plans work. These plans are required by law and are specific to each pipeline.

When it comes to safety, CEPA member companies cooperate. They realize any incident – large or small – hurts the credibility of the entire industry. That’s why CEPA and its members have not only

SHARED RESPONSE

CEPA created the Mutual Emergency Assistance Agreement (MEAA) in 2014, to prepare members to share critical resources, such as equipment or personnel, during an emergency.

To evaluate the effectiveness of MEAA, CEPA members conducted a joint emergency management exercise, including testing their ability to request assistance, follow response procedures and distribute resources. The outcomes from the exercise were used to improve processes and procedures for the future.

begun to share best practices with each other, but have also formally agreed to lend each other emergency resources if an incident happens.

10 I Speaking to Canadians About Pipelines CEPA I 11

Most spills are small, pinhole-sized leaks that can be rectified quickly, but occasionally there are larger incidents. When these happen, pipeline operators work together to contain the spill and begin cleanup.

As soon as an incident takes place, operators shut down the pipeline and deploy their incident command system. This system uses standardized terminology, a specified chain of command and procedures that define the specific goals, strategies, and tactics to be used. Pipeline operators work as long as it takes to clean up the spill, and return the area to its previous state.

CEPA members follow the ‘polluter pays’ model, which means they are completely responsible for a pipeline incident. In fact, the Pipeline Safety Act requires all major transmission pipeline operators to have a minimum of one billion dollars reserved to cover the costs of an emergency.

The majority of pipeline spills are caused by metal loss, materials, manufacturing or construction defects, and cracking.

WORKING WITH FIRST RESPONDERS

Not only do CEPA members help each other out in an emergency, they’re also working to improve their first-responder training programs by learning from member companies and other industries in Canada and the United States.

CEPA has an agreement with the Canadian Association of Fire Chiefs (CAFC), to help ensure firefighters are knowledgeable about the equipment and systems of CEPA members that they might encounter during an incident.

For pipelines that cross water, their emergency response plan includes information about the specific waterway – including currents, spring run-off and habitats.

SO, WHAT HAPPENS

WHEN THERE IS A SPILL?

TAKING RESPONSIBILITY FOR AN INCIDENT

Our members hold each other accountable and collaborate through the CEPA Integrity First program where industry experts and communities come together to define, share and implement leading practices for continuous improvement.

HOW IS THE PIPELINE INDUSTRY

IMPROVING ITS OPERATIONS?

GETTING TO ZERO INCIDENTS

WHAT IS SAFETY CULTURE?

Safety culture means operating a business in a way that puts the safety of workers, the environment, and the public first. It places importance on shared values, attitudes, and behaviours related to safety, ensuring this commitment is evident in everything an organization does.

CEPA members extend this mindset beyond their own organizations to their entire industry – working together to share and improve safety practices. Our safety culture includes:

Industry collaboration is key to improving pipeline operators’ performance and earning the trust of Canadians.

CEPA and our members are working together to achieve a goal of zero incidents – it’s our commitment to Canadians.

One of the most important ways of doing this is by fostering a safety culture – a mindset shared by everyone within an organization and supported by business leaders.

We’re also leading initiatives like CEPA Integrity First®. Through this program, our members share best practices, operate transparently and cooperate and share resources. This is allowing CEPA members to rapidly advance their practices and develop innovative methods to transport energy safely.

The External Advisory Panel (EAP) also guides us by representing a wide variety of voices including Aboriginal Peoples, environmental experts, first responders and landowners on issues related to the pipeline industry. The EAP advises CEPA’s board of directors and Integrity First.

Learn more at www.aboutpipelines. com/cepa-integrity-first Learn more at www.aboutpipelines.com/en/safety/safety-culture/

>> Leadership

>> Training

>> Site Supervision

>> Safe Work Sites

>> Measurement

>> Continuous Improvement

CHRIS BLOOMERPresident and CEO, Canadian Energy Pipeline Association

Learn more at Learn more at www.aboutpipelines.com/en/emergency-response/

12 I Speaking to Canadians About Pipelines

WHO IS CEPA?

ENABLING DIALOGUE, COLLABORATION AND INDUSTRY ADVANCEMENTS

CEPA’s vision is a safe, socially and environmentally

sustainable energy pipeline industry for Canadians.

FULL MEMBERS>> Access Pipeline Inc.>> Alliance Pipeline Ltd.>> ATCO Pipelines>> Enbridge Pipelines Inc.>> Inter Pipeline Ltd.>> Kinder Morgan Canada>> Pembina Pipeline

Corporation>> Plains Midstream

Canada ULC>> Spectra Energy Transmission>> TransCanada PipeLines Limited>> TransGas Limited>> Trans-Northern Pipelines Inc.

TECHNICAL MEMBERS>> Emera Brunswick Pipeline>> FortisBC Inc.>> Maritimes & Northeast Pipeline>> Sun-Canadian Pipe Line Company Limited

The Canadian Energy Pipeline Association (CEPA) is a non-profit organization representing 12 member companies who operate transmission pipelines to transport virtually all of the natural gas and crude oil produced in Canada to markets across North America.

Since 1993, CEPA and our members have been working together to continuously improve pipeline operations in the areas of safety, environment and innovation. Our members have embraced accountability across the industry, and dedicate themselves to continuous improvement, common metrics and shared best practices.

We believe in the power of transparency among peers – of respectfully challenging one other to improve – and are committed to taking the industry to a higher level of safety and industry performance.

HOW ARE PIPELINE

COMPANIES ADVANCING RESEARCH,

TECHNOLOGY AND INNOVATION?

DEVELOPING PIPELINE ADVANCEMENTS

CEPA members have a duty to move energy with care – now and for the future. That’s why the pipeline industry continuously invests in new innovations to ensure Canadians get the energy products they need, safely and reliably.

CEPA members are focused on improving operations in critical areas like leak detection, right-of-way protection and spill response, and use both Canadian and international research to guide the development of new innovations and practices.

Canada has some of the most active and innovative pipeline researchers in the world. To support their work, CEPA members invest in research initiatives at Canadian universities to find new approaches to ongoing challenges. The results of these research projects are used to recommend best practices, the adoption of new technologies, and provide continuous innovation for the industry.

Canada’s leading experts in pipeline technology are working together to develop

innovations that boost pipeline safety.

In 2015, the pipeline industry invested $1.3 billion into pipeline safety.

WHAT KINDS OF INDUSTRY-SUPPORTED RESEARCH PROJECTS ARE OUT THERE?

UNIVERSITY OF WATERLOO, NATURAL SCIENCES AND ENGINEERING RESEARCH COUNCIL OF CANADA, AND TRANSCANADA INDUSTRIAL RESEARCH CHAIR

Metallurgical science experts are exploring ways to improve welding techniques and make pipeline welds tougher– critical for improving pipeline construction and maintenance.

UNIVERSITY OF CALGARY PIPELINE ENGINEERING CENTRE

Fourteen interdisciplinary researchers are working to advance research in three main areas – prevention of corrosion and cracking in pipelines, sensor technologies for faster leak detection and monitoring, and reliability and risk assessment using geotechnical modeling.

THE UNIVERSITY OF BRITISH COLUMBIA PIPELINE INTEGRITY INSTITUTE

The Institute is helping the transmission pipeline industry reach its goal of zero incidents by researching projects focusing on reducing the risk of damage to pipelines caused by ground movement, the degradation and corrosion of pipeline materials, and monitoring and controlling internal and external pipeline corrosion.

HOW DO I LEARN

MORE?

Join the conversation by visiting aboutpipelines.com,

emailing us at aboutpipelines@cepa.com

or following us on social media.

@aboutpipelinesfacebook.com/aboutpipelineslinkedin.com/company/aboutpipelines