TransCanada Corp. (TRP), facing opposition
from campaigners including actress Daryl Hannah to its planned
Keystone XL oil pipeline, will be audited by Canadian regulators
to check whether it meets safety and management standards.
The review involves all units of Canada’s largest pipeline
company, based in Calgary, that are regulated in the country,
including the subsidiary overseeing the portion of the 1,661-
mile (2,763-kilometer) Keystone XL line between Canada and the
U.S., according to a letter sent by the National Energy Board to
TransCanada Chief Executive Officer Russ Girling. The regulator
published the letter dated Oct. 30 on its website.
“The Board expects TransCanada to demonstrate, and provide
adequate supporting documentation of, the adequacy and
effectiveness of its integrity management program as well as its
compliance with” Canadian rules, Secretary Sheri Young wrote.
The NEB will study management, company internal audits,
training, inspections and corrective actions, the letter said.
Texas landowners raised objections to the Keystone XL
project in a court hearing last month, citing property rights.
Actress Hannah echoed concerns the pipeline may contaminate
water in Nebraska’s Ogallala Aquifer in an opinion piece
published in the Guardian newspaper on Oct. 17, saying she was
arrested while trying to block excavators building the line.
TransCanada started building the southern leg of Keystone
XL in August after the U.S. withheld a cross-border permit for
the line earlier this year, following ecological concerns raised
in Nebraska. A hearing for a new route TransCanada proposed in
the state to avoid the aquifer will take place on Dec. 4.
TransCanada said it expects a U.S. decision on the entire line
in the first quarter of 2013.
“The audit will focus on TransCanada’s ongoing and
completed remediation measures referenced in the Board’s
compliance letter to verify that they adequately address
regulatory non-compliances and mitigate any safety threats to
people or the environment,” the regulator said.
TransCanada welcomes the regulator’s audit, Shawn Howard, a
spokesman for the company, said in an e-mail today. “These
Integrity Management Program audits are routine and normal and
as we have always done, we will cooperate fully and provide them
with the information they require to complete their work,”
The company, which has undergone four “normal and
routine” audits from the regulator since 2002, was expecting
the most recent one, Howard said.
The regulator had said it would better communicate its work
online to ensure greater transparency and in publicizing this
audit and another launched in August of Enbridge Inc. (ENB), is being
“proactive,” Steven Paget, an analyst at FirstEnergy Capital
Corp. in Calgary, said in a phone interview.
“The only acceptable thing right now is for the NEB to be
proactive, given the current public concern about pipelines,”
Paget said. Taken together, the audits appear to examine a
“large majority” of cross-border lines in Canada, he said.
The regulator’s audit comes as TransCanada takes on
projects to boost earnings following Keystone XL. The company
said today it received a contract to build, own and operate a
530-kilometer pipeline in Mexico to transport natural gas.
Mexico’s federal power company has agreed to a 25-year
contract to ship gas on the Topolobampo pipeline, which will
cost TransCanada $1 billion and be operational in the third
quarter of 2016, according to a statement from the company.
The project demonstrates TransCanada’s “efforts to secure
earnings growth following Keystone XL for the latter half of
this decade,” Pierre Lacroix, an analyst at Desjardins
Securities Inc. in Montreal, said in a note today.
TransCanada on Oct. 30 said third-quarter profit fell 4.4
percent as it transported less gas and carried out maintenance
at some power plants.
To contact the reporters on this story:
Brian Swint in London at
Rebecca Penty in Calgary at
To contact the editors responsible for this story:
Susan Warren at
Will Kennedy at
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