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TransCanada Whistleblower Warns Of Shoddy Pipeline Practices

TransCanada Whistleblower Warns Of Shoddy Pipeline Practices

Former TransCanada Corp. employee Evan Vokes’ impassioned testimony before a Canadian Senate committee last week painted “a very, very bleak picture of the pipeline industry in Canada, and probably by extension, the States,” according to Sen. Betty Unger.

Vokes’ allegations on Thursday against TransCanada, the Canadian company leading the controversial proposal to send tar sands oil from Alberta to the Gulf Coast via the Keystone XL pipeline, were sobering: a “culture of noncompliance” and “coercion,” with “deeply entrenched business practices that ignored legally required regulations and codes” and carries “significant public safety risks.”

“It’s organized crime, in my opinion,” Vokes, an expert in pipeline welding and now whistleblower against his ex-employer, told The Huffington Post after the hearing. “The source of revenue is legal, but how they go about it isn’t legal.”

TransCanada quickly came to its own defense after learning of the attack.

“We take great exception to the claims by Mr. Vokes that we do not take safety and compliance issues seriously,” company spokesman Shawn Howard told HuffPost. “Our track record and the safety of our energy infrastructure network shows that we do.”

Vokes worked for TransCanada for five years until May 2012, when he said he was fired without cause. From his first days at the company, Vokes recalled raising concerns, or as he put it, “pointing out the obvious.” He provided the Canada Senate with evidence supporting complaints of what he said were shoddy safety practices, including management pressure to retract a welding code violation on a natural gas line feeding a tar sands project in Alberta, and the use of “substandard materials” in the original Keystone pipeline that carried the heavy, molasses-like oil into U.S. Midwest markets.

“What I have documented is a mix of politics and commercial interests that has resulted in the false public claims of exceptional industry practice,” Vokes told the Senate committee.

Today, Vokes said, he sees the same “breaches of construction quality” in portions of TransCanada’s Keystone XL already laid in Texas. The advocacy group Public Citizen Texas posted a video highlighting what it says are dents, faulty welds and other anomalies that have been unearthed in recent weeks.

“What else are they cutting corners on? No one knows,” said Vokes.

Damon Hill, spokesman for the U.S. Department of Transportation Pipeline and Hazardous Safety Administration, said the agency is “in contact with TransCanada to discuss the results of recent inspections, the excavations of certain portions of the newly constructed pipeline, and to monitor the operator’s activities to make any necessary repairs.”

The anomalies that have been uncovered don’t raise immediate concern for Richard Kuprewicz, president of the Redmond, Wash.-based pipeline safety firm Accufacts Inc. Still, Kuprewicz suggested that the industry is far from immune to safety issues.

“There is a tendency that the bigger the project, the harder it is to maintain control,” Kuprewicz said. “You’re just trying to do more things and so you’ve got to be sure management team has appropriate quality-control checks and balances.”

One pressure, Kuprewicz added, is the “time value of money.” The $7 billion Keystone XL project has now been stalled for three years as it awaits a permit from the Obama administration for the northern portion that crosses the U.S.-Canada border.

“Cash is only flowing when you’re moving oil,” Kuprewicz said.

Vokes said this industry reality showed itself to him as pressure to “step into unsound practice” and to “stop investigations.” He said TransCanada managers forced him to take “stress leave” before he could finish submitting all of his documentation during an internal audit at the company.

“When he brought issues forward, TransCanada took Mr. Vokes’ concerns seriously and believes it has treated him fairly and appropriately,” said Howard, who would not provide a reason for Vokes’ dismissal. “For legal reasons, we are unable to comment any further.”

Don Wishart, a senior operations and major projects adviser at TransCanada, spoke in front of the same Canadian Standing Senate Committee on Energy, the Environment and Natural Resources on Feb. 12. In response to questions about an unnamed whistleblower, Wishart said the allegations were “administrative.” He went on to suggest that tar sands oil “floats on water,” which some scientists refute.

“What they presented to the Canadian Senate was a lie,” Vokes told HuffPost.

“You don’t know you’re a whistleblower until the retaliation starts,” he said. “The wrong-doers in positions of authority will do everything they can to discredit you.”

Kuprewicz acknowledged the whistleblower label is something people “want to be careful about seeking,” adding that it typically “doesn’t go well in industry.”

The Canadian senators expressed similar sentiments as they questioned Vokes on Thursday.

“I have enormous respect for you and the courage it’s taken to come forward,” said Sen. Judith Seidman. “I’m worried about Canadian safety as we look at building an increasingly larger infrastructure across the country.”

At the same time, senators also demonstrated the Canadian government’s push to get more tar sands oil flowing. “It’s important for this country to get bitumen to the U.S.,” said Sen. Michael MacDonald. “I also think it’s important to do it safely.”

On this point, Vokes doesn’t disagree. He called oil and gas the “lifeblood” and said he believes it is possible to pipe it all safely. “I don’t have a problem with what’s in pipeline,” said Vokes. “I have a problem if it comes outside the pipeline.”

In an interview in April, Joe Oliver, Canada’s minister of natural resources, told HuffPost that 99.9996% of oil going through U.S. pipelines is delivered safely.

Unger underscored this safety record, and asked Vokes to “rationalize” his seemingly incongruous allegations.

“I’ve been on several projects that were very nearly disasters. I’m surprised there aren’t more accidents,” Vokes responded, noting that pipeline problems may not result in accidents until decades later — often “long after designers and those that constructed them have retired.”

“There’s thousands of cracks in the system — it’s just which ones will become the problem? It’s low probability, high consequence,” Vokes said.

“Regardless of my poor experiences with some individuals, there are still a lot of people that would like to do it right,” added Vokes. “That’s the only thing that is saving us.”

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LINK: http://www.huffingtonpost.com/2013/06/11/transcanada-whistleblower-pipeline_n_3415701.html?utm_hp_ref=tw

Evan Vokes stands on the site of the Guadalajara Pipeline in Mexico, a project for a TransCanada subsidiary, in 2010.

Evan Vokes stands on the site of the Guadalajara Pipeline in Mexico, a project for a TransCanada subsidiary, in 2010.

2 Responses to “TransCanada Whistleblower Warns Of Shoddy Pipeline Practices”

  1. Tom Pendergast says:

    The following is a letter on the subject of the Keystone XL pipeline from John Hofmeister, former president of Shell Oil:

    I was asked recently by a skeptic of the Keystone XL pipeline to explain it. This note is to share this explanation with you.

    Best wishes,

    John

    — Forwarded Message —
    Date:
    [Sun, 16 Mar 2014 08:33:53 -0500]
    From: John Hofmeister
    To: John Hofmeister
    Subject: FW: Xl pipeline, where are you on this?
    I’m on record as pro-pipeline and have publicly chastised the Administration for its unwillingness to make a decision in the interests of the nation’s energy security, energy availability and eventually energy affordability. I’ve also been on different panels with Bill McKibben of 350.org, one at Yale University and another at the Commonwealth Club of San Francisco, two liberal and progressive venues, to challenge his mis-truths and false assertions about the project and the companies involved, not that I’ve changed any minds. I’ve also spoken directly with the Energy Minister of Canada, the Premier of Alberta, and the Canadian Ambassador to the U.S. on the topic, along with many American officials on both sides of the aisle. Both Boone Pickens and I, separately, on TV have called the politics of the pipeline just plain “nuts.”

    Before getting to the merits of the pipeline, here are some facts about the oil developments in the oil sands:

    ·

    The Canadian government decided in the early 1990’s that the oil sands would be as fully developed as technically possible as a matter of sovereign security for the nation and it then invited in the oil companies to see what they could do. Every government since then has re-emphasized the importance of this energy resource development in an export-oriented nation. It has the support of parliaments and the First Nation Peoples ever since then. Alberta and Saskatchewan have likewise made similar provincial commitments.

    ·

    The decision by the Canadian Government and its provinces also addresses the environmental impacts of the oil sands development by demanding several legal requirements of the companies developing the oil deposits, including the following: a recovery and remediation plan so that any disturbance to the landscape and natural water systems is recovered and restored over time, like Australia does its surface coal mines; continuous adoption of best technology such that the carbon dioxide and other GHG’s as well as metals and other nasty materials from the earth are diminished, treated, buried, etc., over time in the mining, upgrading, and production processes; companies that are competing for licenses to develop the deposits also have to present environmental offset plans so that the production of the natural resource is as environmentally neutral in the operations of the companies as possible. If the offset plans do not meet the expectations of the government, licenses are not granted. Inspections occur regularly to make sure that companies are meeting their license requirements. Violations result in fines, project work stoppages and loss of license.

    ·

    In recent years the technology of the production processes have evolved enormously to reduce the environmental impact. The old notion of mining the deposits with huge earth movers, trucks, building huge lakes of the liquid and solid remnants of the upgrading process, the building of natural gas fired upgrading plants, etc. making one of the largest physical defilements of the earth’s surface known to man are largely being replaced by new technically advanced production processes called SAG-D. This process injects steam underground to dislocate the oil molecules from the sands that hold them without disrupting the surface of the earth, other than with a drill bit. There is limited fracking and limited use of water, according the government approved plans. The filthy lakes are being drained, remediated and disappearing. The upgrading facilities become redundant. The efficiency and effectiveness of the production process lowers both the cost of production and the carbon footprint of production, making the oil produced via SAG-D very competitive in terms of carbon impact with other production technologies. (The environmental community refuses to recognize this fact and work very hard to convince people that the old ways are the only ways, which is just not true. They do this because they want people to believe an untruth about the environmental impact of oil sands oil. It was once the case that the inefficiency of production and the impact on the earth was much greater than other oil produced elsewhere. But the old processes are phasing out and will likely be gone by the early 2020’s.)

    ·

    The amount of resource is unbelievably large and the notion that some other nation can interfere in the sovereign decision of Canada to produce its own natural resources is ludicrous on the face of it. There is nothing the U.S. can do to stop the oil sands production as and when Canada chooses to produce it, short of invading Alberta and Saskatchewan and taking the oil fields by force. It is an important and growing part of the Canadian economy, which recognizes as its major industry the exports of natural resources. The production will continue throughout the 21st Century and into the 22nd. Canada will export its oil to whoever wants to buy it. There are now announced plans underway to build pipelines from Alberta to New Brunswick and to increase the amount that pipelines can carry from Alberta to British Columbia. If anyone thinks that those pipelines will not be built because of local resistance and/or U.S. interference, they can think again. Canadians are overwhelmingly well educated on the importance of exports to the nation’s economic and security well being. The laws of the nation are designed to make sure that projects will succeed, not be stopped by striped suit lawyers from the U.S. or the big cities back east. The First Nation Peoples will fight to protect their lands but only until they get the price (support from the government, jobs, engagement with the companies on the designs of the projects, etc.) they want/need, then they support such projects.

    So that’s the preface to any discussion of the pipeline. Forgive me for this “tutorial.”

    Here are not very well known aspects of the pipeline project that I present in my remarks to the public and press:

    ·

    There are already over 200,000 miles of oil pipelines crisscrossing the U.S., not including natural gas and other pipelines. The northern extension of the pipeline from the U.S./Canadian border to Cushing, Oklahoma adds about another 1200 miles to this base of pipeline infrastructure, or .006 percent in total, to what’s already in existence.

    ·

    The President arrived in Cushing Oklahoma in the Spring of 2012 to a campaign appearance to “approve” the southern leg of the pipeline from Cushing to Houston. He stood among the piles of pipes, dressed in work clothes, to proclaim the value of the jobs to be created and the energy security to be derived. In reality his authority was not needed to approve the domestic side of the pipeline. The Dept. of Transportation and states of Oklahoma and Texas had already approved it. But it made him look like he was pro-pipeline in the face of the re-election campaign process.

    ·

    The Ogallala Reservoir already has more than 20,000 miles of oil pipelines on top of it, from Texas to Nebraska. The argument that the Keystone XL pipeline is somehow like a new “invasive species” that could compromise the environmental protection of the reservoir has no merit. There has never been a claim of environmental damage to the reservoir in the many decades that pipelines have covered it.

    ·

    Pipelines are about 40 percent more efficient in cost than transporting by rail, including the original costs of building the pipelines. Once built the cost of transporting the oil is negligible relative to the costs of rail transport. Consumers ultimately pay all the costs of rail and pipelines in the retail price of gasoline.

    ·

    The safety record of pipelines versus rail is well established and non-controversial. The number of rail incidents, deaths, destruction and environmental impact exceeds pipelines and always have. Rail goes through the middle of towns and cities. Pipelines do not.

    ·

    When jobs are discussed pipeline opponents refer to the “temporary” nature of construction jobs. Of course, all construction jobs are temporary by the nature of building things. Once they’re built the construction jobs go away, whether for a house, a factory or a pipeline. The idea for construction companies is every project represents new jobs for a time period. Let’s not run out of work. I’ve talked to union presidents who are livid toward Washington and environmentalists on this idiotic defense that since the jobs are temporary they are unimportant.

    ·

    When jobs are discussed pipeline opponents completely ignore the jobs of the workers either on the pipeline, or more importantly, the jobs of people who work in refineries that process the oil and make oil and chemical products. This pipeline represents another 800,000 barrels per day of crude product which they will process along the Gulf coast. Such products will then be sold wherever there is demand for the products. So the jobs needed to process an additional amount of crude oil should be added to the total of jobs created. For example, when I was Shell President I signed a $7 billion contract to double the size of Motiva’s (Shell’s 50/50 joint venture with Saudi Aramco) Port Arthur, Texas refinery in order to accommodate Canadian crude from the oil sands. There were over 5,000 construction jobs for four years. The plant workforce is now 50 percent larger. The contract specifically calls for diminishing imports of Saudi Crude to take on the Canadian oil over time so that the Saudi crude could then be purchased by Shell’s refinery in Japan.

    ·

    The environmentalists and some politicians argue that the Canadian crude will be exported from Texas to other ports around the world. I do not know anyone in their right mind that would do that, adding enormous costs to the crude oil, on top of the costs of already transporting it to Texas, when there is capacity to turn the crude into finished products that are far more valuable to sell than crude oil. It’s a blustering statement that has no basis in fact, other than speculation.

    ·

    The U.S. Dept of State has verified through numerous studies that the GHG impact of the Keystone XL pipeline will not suddenly add to the global problem of GHG environmental challenge on the basis that the oil will be produced regardless of this pipeline, for example oil shipped by rail to the U.S. that does not need a Presidential permit, and that there is no way that the U.S. can prevent the production of such resource and that the U.S. can reject the oil but it will be produced, sold and burned by other buyers.

    ·

    The Canadian officials have each said to me directly the same things: if the U.S. doesn’t want our oil, just tell us. We offer it to you first because we’re neighbors and it is better for all concerned to utilize the energy in North America. There is too much of it for us to use it all in Canada. But if you don’t want it, let us know so that we can begin providing it to other markets. Leaving us in suspense is simply not neighborly and in no one’s interests.

    ·

    If we don’t build the pipeline, the oil will be produced regardless. If we do build the pipeline, it will be transported, processed and used by Americans in lieu of imports from other parts of the world. Meanwhile the nation is short of pipeline infrastructure for oil, natural gas, water, and other commodities. The economic value creation and jobs that could come from looking out for our 21st Century needs to me are important investments for the security and quality of life of Americans. We owe ourselves the willingness to make decisions in our own interests, even if some people will oppose or resist. What is good for the greater number, in my book, is what is good for us all.

    Opposition to the pipeline to me comes down to essentially ideological opposition to hydrocarbons. I understand such opposition. The pipeline itself is a neutral bit of infrastructure that will either be built or not. The unwillingness to make a decision is but mindless and spineless political positioning, either way. The ideological opposition to hydrocarbons however will not prevent the oil sands oil from being developed because the Canadians are in control of that. What no one denies, including Bill McKibben, is that hydrocarbons will be a part of our economies, life styles and energy sources for a long, long time to come. He has said to me directly that he knows and understands that. His mission is however to make it as difficult and as expensive as possible for oil companies to do their business, despite that all such costs are passed along to the consuming public. He has said to me that it is not his responsibility what consumers pay for energy and if hydrocarbons are ever more costly than that is a good thing because then maybe people will use less. What
    nonsense
    , when they have no other alternative.

    Personally I can’t stand such intellectual arrogance and socially destructive beliefs. Who is he to determine what average citizens pay for a gallon of fuel? He gets one vote like the rest of us. If we were willing to develop a plan to move away from hydrocarbons while increasing the availability of public transport, like the Europeans, Asians, etc., then that’s another matter. But we’re not. And he knows it. So instead we choose to screw our fellow citizens at the gas pump because he doesn’t have capacity or interest in a wider plan? As you may recall my own book lays out such a plan to eliminate the internal combustion engine. He’s unwilling to work that hard. So I refer to him as a nonsensical “Dr. No” kind of character who can only say what we should not do. He has no plan for what we could do.

    Way too much I realize. But it’s been a lot of work over the past five years to talk pragmatism and common sense about energy going up against the likes of McKibben, Brune, Markey, Boxer, etc. who enjoy their hydrocarbon transportation, paid for by others, but who commit their followers to nonsensical and unnecessary higher costs in the name of their own power games, without having a clue, or care, how to solve the larger challenges. While they enjoy their subsidized hydrocarbon transportation, everyone else pays more. Sounds like hypocrisy to me.

    I’m ok if you disagree.
    That’s inherent in our freedoms of choice and speech as citizens.

    John

  2. Tom Pendergast says:

    Here in Ohio we’re already processing Canadian oil sands crude at the Husky-BP Toledo refinery and at Husky’s Lima refinery. And, below, you will read how it is getting here:

    A Nearly Identical Keystone XL Pipeline Just Got Built – and No One Noticed
    By DAVID ZEILER, Associate Editor, Money Morning • February 11, 2015 • Print | Email

    We’ve reached Keystone XL pipeline veto day, as the Republican-controlled Congress sends its bill approving the project to President Barack Obama this afternoon (Wednesday).

    The TransCanada Corp. (NYSE: TRP) Keystone pipeline project would bring Canadian tar sands oil from Alberta to refineries on the U.S. Gulf Coast. Cross-border projects require presidential approval following a State Department review. The president has already promised to veto it.

    But this is not the first international pipeline project seeking approval…

    In fact, in the six years since TransCanada first applied for a Keystone XL permit, the State Department has approved permits for several other cross-border pipeline projects. That adds to the dozens of cross-border pipelines that have been approved over the decades.

    According to a 2013 Congressional Research Service study, 46 oil and natural gas pipelines operate across the U.S.-Canada border. If you include Mexico, the United States has 70 cross-border oil and gas pipelines.

    Of course, the Keystone pipeline veto is more to appease critics who are concerned about climate change and damaging spills.

    The Keystone project in question, however, would make up a tiny fraction of the U.S. pipeline miles.

    Just how tiny? Take a look…

    Keystone Pipeline Just a Blip on U.S. Map

    According to the Association of Oil Pipelines, the United States had 60,911 miles of crude oil pipelines as of the end of 2013. The additional portion of the Keystone that needs approval would be just 1,179 miles.

    And crude oil isn’t the only hazardous liquid in our pipelines. Including liquid natural gas (LNG) as well as refined petroleum products such as gasoline and jet fuel, the United States had 192,396 miles of dangerous liquids pipelines as of 2013. And that doesn’t count more than 300,000 miles of natural gas pipelines.

    That’s not all. If you include transmission pipelines – the ones that go through neighborhoods and supply individual homes – the U.S. has 2.5 million miles of hazardous liquid pipelines.

    The Keystone pipeline would add 1,179 more miles. That would be:

    A 1.94% increase in crude oil pipelines
    A 0.61% increase in hazardous liquid pipelines
    A 0.047% increase in energy pipelines of all kinds

    But what’s most absurd about this controversy is that an almost identical project just went operational last month.

    And virtually no one noticed…

    A Project Just Like the Keystone Pipeline That You Never Heard About

    Just weeks ago, on Jan. 16, Canadian dignitaries joined the CEOs of Enbridge Energy (NYSE: EEP) and Enterprise Product Partners (NYSE: EPD) in Freeport, Texas. The occasion was the opening of the last leg of a pipeline carrying Canadian crude from the oil sands of Alberta to refineries on the Gulf Coast.

    Just like the Keystone pipeline.

    Freeport is the southern terminus of the newly expanded Seaway pipeline. It can carry up to 850,000 barrels of crude oil a day from a hub in Cushing, Okla. (Keystone would carry 830,000 barrels.) There it connects to another Enbridge pipeline, Flanagan South, which started operating in December.

    Flanagan South runs north to Flanagan, Ill., where it connects to Enbridge’s “Line 61” pipeline. And Line 61 connects to the “Alberta Clipper” pipeline that crosses into Canada on its way to the Alberta oil sands.

    When Enbridge ran into trouble getting a permit to expand the capacity of the Alberta Clipper, it simply re-routed the oil to an adjacent pipeline at the border. None of the other projects required presidential approval.

    State and local news media covered the Seaway event. But the national media ignored it. They were too busy obsessing over the Keystone XL mania in Congress.

    And nary a peep was heard from the politicians.

    No impassioned speeches from the likes of Sen. Barbara Boxer, D-Calif.: “What does XL stand for? To me it stands for extra lethal.”

    No bloviating from House Speaker John Boehner, R-Ohio: “President Obama is now out of excuses for blocking the Keystone pipeline and the thousands of American jobs it would create.”

    It just goes to show how totally political the Keystone pipeline is.

    Even oil industry experts are over the drama.

    “Keystone is kind of old news,” Sandy Fielden, director of energy analytics at consulting company RBN Energy, told Bloomberg last November. “Producers have moved on and are looking for new capacity from other pipelines.”

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