Hillslope and Fluvial Processes Along the Proposed Pipeline Corridor, to , West Central

James W. Schwab P.Geo., Eng.L.

Prepared by: James W. Schwab P.Geo., Eng.L. Geomorphologist

Prepared for: Bulkley Valley Centre for Natural Resources Research & Management Smithers, B.C.

Prepared: September, 2011

THIS DOCUMENT HAS RECEIVED AN INDEPENDENT PEER REVIEW

Table of Contents

Table of Contents ...... ii List of Figures ...... iii Executive Summary ...... iv 1 Introduction ...... 1 1.1 Regional Setting ...... 1 1.2 Physiographic Regions ...... 2 1.2.1 ...... 3 1.2.2 ...... 3 1.2.3 ...... 3 2 Hillslope and Fluvial Processes ...... 4 2.1 Nechako Plateau ...... 4 2.1.1 Burns Lake to the Morice River ...... 4 2.1.2 Morice River...... 7 2.2 Hazelton Mountains ...... 9 2.2.1 Gosnell Creek ...... 9 2.2.2 Upper Clore ...... 10 2.2.3 Sackungen ...... 10 2.2.3 Clore River to Nimbus Mountain ...... 11 2.3 Kitimat Range ...... 12 2.3.1 Hoult Creek ...... 13 2.3.2 Upper Valley ...... 13 2.4 Kitimat Trough ...... 15 2.4.1 Glaciomarine sediments ...... 15 2.4.2 Landslides in glaciomarine sediments ...... 17 2.4.3 Submarine flow slide ...... 19 3 Regional Landslides ...... 20 4 Landslides and Linear Infrastructure ...... 21 5 Climate and Landslides ...... 21 6 Conclusion ...... 22 7 Acknowledgements ...... 23 8 Literature Cited ...... 23

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List of Figures

Figure 1 Map shows west central British Columbia physiographic regions and a general delineation of the proposed pipeline corridor ...... 2

Figure 2 Tchesinkut Creek washout-flow...... 5

Figure 3 Dungate Creek landslide located southeast of Houston ...... 6

Figure 4 Bedrock spread located east of Parrott Creek...... 6

Figure 5 Bedrock spread along a 2.5 km scarp and a 1.3 km scarp ...... 7

Figure 6 A low gradient flow slide in advance-phase glaciolacustrine ...... 8

Figure 7 A reactivated slump earth flow Morice Road ...... 9

Figure 8 Landslide in the red tuff volcanic bedrock, Kitnayakwa watershed ...... 11

Figure 9 Google Earth image looking east from Nimbus Mountain ...... 12

Figure 10 Google Earth image looking to the southwest over the Clore River Canyon ...... 12

Figure 11 Hunter Creek fan experienced a catastrophic channel avulsion . 14

Figure 12 Surficial geology between Kitimat and Terrace...... 16

Figure 13 Location of the May 1962 Lakelse flow slide ...... 18

Figure 14 The Mink Creek flow slide rapidly retrogressed along a slope of about 3 ...... 18

Figure 15 Foreslope of the Onion Lake Flats (fan-delta) to the east of Cecil Creek ...... 20

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Executive Summary

Hydrocarbon pipelines are currently proposed to cross west central British Columbia (B.C.) to access a deepwater port at Kitimat. The geology and geomorphology of the area is complex and destructive landslides are common. The trending rugged topography poses serious challenges for pipeline development. Only certain valleys and passes are suitable for east–west oriented infrastructure. The terrain across west central B.C., with steep unstable rock masses and weak soils, places considerable constraints on pipeline development.

This paper provides an overview of the landscape, terrain, hillslope processes and fluvial processes found within the general area of the proposed pipeline corridor across west central B.C. The intent of this paper is to help formulate discussion, encourage more in-depth study, direct more detailed on-the-ground investigation, and stimulate investigation into possible safer alternative routes to the unstable terrain found in west central B.C. This paper does not discuss environmental consequences and risk associated with the proposed pipelines although the environmental consequences of an oil pipeline break do differ considerably from a break sustained by a natural gas pipeline.

The proposed corridor crosses three distinct physiographic units: the Nechako Plateau, the Hazelton Mountains, and the Kitimat Ranges. These units are distinct topographically as reflected in present day landforms, erosion, and landslides, and thus present different hazards to a pipeline.

The Nechako Plateau appears relatively benign; however, large landslides have occurred in volcanic rock overlying other older volcanic and sedimentary rock. Active bedrock spread is occurring to the east of Parrott Creek, possibly foreshadowing further movement along the northwest-southeast trending ridges running between Houston and Francois Lake. Along the Morice River, advance-phase glaciolacustrine sediments have historically experienced landslides. Road construction and wildfires have reactivated these landslides. The proposed pipeline corridor crosses an historic earth flow west of Owen Creek, glaciolacustrine sediment along Owen Creek, and probably buried advance-phase glaciolacustrine sediments near Owen Creek, Fenton Creek and Lamprey Creek.

The pipeline corridor follows the Crystal forest access road up Gosnell Creek. Shifting channels on active alluvial fans pose road maintenance challenges along a 10 km section of the road. Pipelines will likely present similar challenges crossing these fans. There is considerable lateral bank instability at the proposed Crystal Creek and Gosnell Creek crossing.

The proposed pipeline corridor dissects the floodplain (glaciofluvial and glaciolacustrine terrain) located immediately upstream from the Clore Canyon. No development of any sort has occurred to date upstream of the Clore Canyon so it is unclear how this terrain will respond to pipeline development.

The volcanic bedrock of the Hazelton Mountains is inherently unstable as evident in many prehistoric landslides. Three documented large landslides within the Bulkley Range of the Hazelton Mountains have severed the natural gas pipeline since its construction in the early 1970s; large landslides have also impacted forest roads and highways.

Deep-seated gravitational slope deformation is prevalent in the volcanic bedrock found in the Kitnayakwa, Clore and Bernie watersheds. Sackungen or slope sagging, indicative of slope deformation, indicates active slope movement that commonly foreshadows a pending landslide. A thorough geotechnical investigation is required to determine the stability of the bedrock and hillslope in areas of slope deformation. Avoidance of these unstable hillslopes is generally the preferred engineering development option.

The proposed corridor crosses through a mountainside to the southeast of the Clore Canyon. The highly fractured bedrock in the canyon is undergoing active mass erosion. This visibly

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unstable rock reaches up to about 1200 m above sea level (asl) and extends around the mountain into an adjacent tributary valley. This bedrock along the north and west side of the mountain is extensively gullied and contains many landslide scarps and an actively moving landslide. Along the east side of the mountain, sackungen parallel the slope and extend through old landslide scarps. The active instability of the mountain slope places major constraints on development.

Steep narrow valleys characterize the Kitimat Ranges. Colluvial-fluvial fans are at the base of most steep gully channels in the Hoult Creek and Upper Kitimat watershed. These steep gully channels extend from the alpine onto the valley flat or directly into Hoult Creek or the Kitimat River. Many of these high-energy systems experienced debris flows during extreme rainstorms in the fall of 1978 and the fall of 1992. Debris flows commonly occur under seemingly ―normal‖ storm events during summer convective storms and fall frontal rainstorms. Debris flows are powerful landslides that can damage or rupture pipelines.

Hunter Creek, a large active alluvial fan, has historically pushed the Kitimat River across the valley. The most recent catastrophic channel avulsion occurred in 1992. This avulsion was caused by road construction up the fan and the construction of a levée above the bridge crossing on Hunter Creek. Channel changes will likely recur on the fan during major flood events.

The Kitimat Trough, situated between Terrace and Kitimat, is an uplifted fiord. Sensitive glaciomarine sediments occupy much of the valley floor. Deep deposits of glaciofluvial sediments and postglacial materials (floodplain, alluvial fans and bogs) cover the glaciomarine sediments. These glaciomarine sediments have experienced large prehistoric and recent landslides. A high incidence of prehistoric landslides occur around Mink Creek, the Nalbeelah wet land complex, the foreslope of the Onion Lake Flats (fan-delta), Cecil Creek and Deception Creek.

Recent large flow slides occurred at Mink Creek (winter 1992-93) and Lakelse Lake in May and June 1962. A large submarine flow slide occurred in sensitive marine muds at the front of the fiord-head delta at Kitimat Arm in April 1975. These recent landslides serve to show the continuing sensitivity of the glaciomarine sediments in the Kitimat Trough and the marine sediments on the fan-delta at the fiord-head of Kitimat Arm. Natural and human caused factors such as increases in surface load, removal of lateral support by stream bank undercutting or excavation, vibration by heavy equipment, earthquake shock, high water pressures and interruption of intertidal drainage can trigger these landslides. Thus, the potential exists for landslides to occur during pipeline construction and in the future.

Glaciomarine sediments in the vicinity of Cecil Creek, Deception Creek, Wedeene River, Little Wedeene River, along the west side of Kitimat Arm and along Chist Creek will be encountered during pipeline construction. The pipeline corridor crosses features indicative of prehistoric flow slides near Cecil Creek through to the little Wedeene River. The presence of prehistoric flow slides in the glaciomarine sediments suggest a high probability that future landslides will occur. These failures commonly start with a small landslide from bank erosion or loading that exposes a layer of sensitive material. Then, they rapidly retrogress with a flow of material from the displacement basin. Pipelines crossing glaciomarine sediments must therefore avoid areas that lie within potential flow slide depletion zones as landslides will break or disrupt pipeline service.

Landslides travel long distances and damage linear infrastructure such as pipelines. Six large rock slides occurred in west central B.C. since 1978, five of these since 1999, and four since 2002. Three of the six rock slides severed the natural gas pipeline (Howson landslides in 1978 and 1999, and Zymoetz landslide in 2002). Damage to linear infrastructure commonly occurs in runout zones many kilometres from the initial landslide. This has occurred with recent landslides in west central B.C.; the longest traveled in excess of 4 km along a slope of 9°. Therefore, the potential for damage to pipelines extends to unstable terrain and potential landslides that start well outside the construction corridor.

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Long periods of increasing precipitation and temperature are associated with most dated, large landslides across northern B.C. The climate of northern B.C. appears to have become warmer and wetter since the beginning of instrumental observations. There is evidence to suggest that landslide rates have increased in west central B.C. Climate change scenarios suggest a warmer and wetter climate for west central B.C. Therefore, the rate of landslide occurrence will likely increase and thus the likelihood of landslide impact to a pipeline will increase.

Recognition and avoidance of unstable terrain is the most efficient and cost effective method for management in landslide prone terrain. This requires detailed terrain stability mapping and geotechnical investigation to identify unstable slopes, runout zones, and depletion zones. Avoidance of unstable terrain is a difficult management strategy to adopt over many sections of the proposed pipeline corridor given the topographic constraints. Therefore, the unstable mountainous terrain across west central B.C. is not a safe location for pipelines. Eventually a landslide will sever a pipeline. An alternative safer route through B.C. needs investigation.

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1 Introduction

Hydrocarbon pipelines are currently proposed to cross west central British Columbia (B.C.) to access the deepwater port at Kitimat (Figure 1). In west central B.C., these pipelines will cross to the north of the community of Burns Lake, extend west to the Morice River, continue west along the south side of the Morice River, up the Gosnell Creek drainage and across the Clore River valley. Then, the route follows the north side of the Kitimat River crossing the Kitimat Valley on the Onion Lake Flats, traveling south down the west side of the valley to a proposed terminal at tide water near the city of Kitimat. Two tunnels are proposed to connect the upper Clore valley through to Nimbus Mountain and through Nimbus Mountain to Hoult Creek. The corridor in west central B.C. crosses three physiographic units: Nechako Plateau, Hazelton Mountains, and Kitimat Ranges (Figure 1). The geology and geomorphology of the region is complex and destructive landslides are common. Geertsema et al. (2009) make this statement… “The northwest trending rugged topography poses serious challenges for linear development. Only certain valleys and passes are suitable for east–west oriented infrastructure. Together with steep, unstable rock masses and weak soils, the terrain in west central B.C. places constraints on development.”

This paper provides a general overview of the landscape, terrain, hillslope processes and fluvial processes found within the general area of the proposed pipeline corridor across west central B.C. Published literature referenced in the paper pertains to the geographic area. Technical terminology is kept to a minimum. The paper contains information and interpretations based on my observations and experience gained over 30 years conducting field investigations, helicopter reconnaissance work, and aerial photograph interpretation while working in northwest B.C. as a Research Geomorphologist for the B.C. Forest Service.

The intent of the paper is to help formulate discussion, encourage more in-depth study, direct more detailed on-the-ground investigation, and stimulate investigation into possible safer alternative routes to the unstable terrain found in west central B.C. This paper is by no means a complete discussion of bedrock geology and surficial geology in the region nor does it answer geotechnical engineering concerns at specific site locations. There also is no attempt to discuss environmental consequences and risk, although the environmental consequences of an oil pipeline break do differ considerably from a break sustained by a natural gas pipeline.

1.1 Regional Setting

The topography of the , Hazelton Mountains, and Nechako Plateau strongly influences precipitation and air temperature across the region. The predominant flow of moisture-laden air travels easterly from the Pacific Ocean. Mean annual precipitation values for coastal mountains generally exceed 2500 mm and many areas do experience >3500 mm. Precipitation decreases toward the east with a mean annual precipitation of 1322, 513, and 460 mm for Terrace, Smithers and Burns Lake, respectively, with 25 to 40% of this as snow (Canadian Climate Normals 1971-2000). Mean annual April snow pack at higher elevation is about 1400 mm snow water equivalent at Tsai Creek ( Watershed, 1369 masl, coastal- interior transition) and about 350 mm snow water equivalent at Lu Lake (Equity Silver Mine, 1308 masl, interior climate). Mean temperature in January is -4.3ºC, -8.9ºC, and -10.5ºC, and mean July temperature is 16.4ºC, 15ºC, and 14.3ºC respectively, for Terrace, Smithers and Burns Lake. Summer temperatures decrease by several degrees at higher elevations. The Coastal Western Hemlock Biogeoclimatic Zone occupies the main valleys in the Coast Mountains and the Sub-Boreal Spruce Zone occupies the main valleys in the interior. At higher elevations, Mountain-Hemlock, Engelmann Spruce-Subalpine Fir, and Alpine Tundra Zones occur (Meidinger and Pojar 1991).

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Figure 1: Map modified from Holland (1976) shows west central British Columbia physiographic regions and an approximate delineation of the proposed pipeline corridor, marked in blue, west from the community of Burns Lake to Kitimat.

1.2 Physiographic Regions

Physiographic regions and subdivisions of Holland (1976) and Mathews (1986) reflect present day topography and landforms; a result of similar geologic histories of mountain building, similar bedrock response to erosion, and similar contemporary erosional and depositional processes. Readers interested in an expanded introduction into the factors that have created the physiography and landscapes of British Columbia are encouraged to consult Church and Ryder (2010). Holland (1976) provides a detailed description of the physiographic regions in west central B.C. The Nechako Plateau, Hazelton Mountains and Kitimat Ranges including the Kitimat-Kitsumkalum Trough (Kitimat Trough) are the physiographic units from east to west, respectively (Burns Lake to Kitimat) crossed by the proposed pipeline corridor. These units are distinct topographically; distinguished in present day landforms, erosion and landslide processes.

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1.2.1 Nechako Plateau

The Nechako Plateau is an area of low relief characterized by an expanse of flat or gently rolling landscapes. The plateau elevation sits between 1200 and 1500 masl, separated by wide valleys with elevations of 700 to 900 masl. Long narrow lakes occupy many of the subdued valleys, for example, Francois Lake. Gently dipping or flat lying lava that covers much of the Nechako plateau overlies older volcanic, sedimentary and intrusive rocks. Deep glacial sediments cover and obscure much of the bedrock ridges and knobs. Locally, bedrock is visible on bluffs above Houston, China Nose Mountain, Morice Mountain, Nadina Mountain and the ridge to the east of Parrott Creek.

Glacial ice covered the Nechako Plateau extending above the plateau and valleys to 2000- 3000 masl during the last glaciation (Clague 1989). Grooves or lineation and drumlin ridges originating from glacier movement mark the landscape and show the direction of ice flow. Meltwater channels and eskers are recognizable features on the plateau. Numerous lakes and ponds now occupy depressions left by melting glacial ice.

1.2.2 Hazelton Mountains

The Hazelton Mountains lie west of the Nechako Plateau and east of the Kitimat Ranges of the Coastal Mountains. They extend from the southeastward toward Eutsuk Lake and comprise the , and Tahtsa Ranges. Volcanic and sedimentary rocks underlie the mountains. Many of the mountain peaks have cores of granitic rock.

The Bulkley Ranges sit west of the , south of the and east of the Zymoetz River at Terrace following a southeasterly trend to Morice Lake. The Bulkley Range transitions into the Nechako Plateau to the east and south of the . The ranges contain rugged mountain peaks and rounded lower elevation mountains. Rugged peaks shaped by alpine glaciation include the Seven Sisters peaks (2747 masl), Brian Boru Peak (2507 masl) in the Rocher Déboulé Range, (2598 masl) and the Howson Peak (2759 masl). Rounded mountains with drumlins and fluted ridges on lower elevation (< 1900 masl) indicate that glaciers overrode these mountains during the maximum phase of the last glaciation (Stumpf 2001). In fact, all but the highest peaks were covered during the last glaciation. The Hazelton Mountains, with peaks sculptured by alpine glaciation bounded by wide valleys differ distinctively from the steep narrow glaciated valleys of the Kitimat Ranges.

1.2.3 Kitimat Ranges

The Kitimat Ranges of the Coastal Mountains comprise dome-like granitic mountains overridden by glacial ice. The mountains are relatively uniform in elevations at about 2200 masl. A few higher peaks project as Matterhorn-type features; Atna peak is the highest of these at 2724 masl. Glacial ice has carved steep-sided narrow valleys. Another characteristic feature is the long fiords that penetrate the range. The fiords are a product of intense glaciation of pre-existing valleys. The north south trending Kitimat valley, termed the Kitimat- Kitsumkalum Trough (Kitimat Trough) is a fiord filled with glacial and postglacial sediments (refer to section 2.4 for a more detailed discussion on the glacial history and glaciomarine sediments of the Kitimat Trough).

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2 Hillslope and Fluvial Processes

Landslides and erosion are commonplace in the mountainous terrain of west central B.C. (Geertsema et al. 2006a). The landslides include shallow debris slides and flows, massive rapid moving rock slides, slow moving earth flows and rapid moving flow slides (refer to Cruden and Varnes 1996; Hungr 2005; and Geertsema et al. 2010 for landslide terminology and descriptions). Climate, topography, bedrock geology and surficial geology influence the type, frequency and occurrence of various hillslope processes within a physiographic unit. Hence, hillslope processes between Burns Lake and Kitimat are discussed within the context of recognized physiographic units within a described location, for example, Nechako Plateau— Burns Lake to the Morice River.

2.1 Nechako Plateau

The pipeline corridor west from Burns Lake to the Morice River Valley crosses 80 km of the Nechako Plateau. The plateau is gently rolling and climbs to the ridge of Equity Silver Mine then drops back toward the Morice River Valley (Burns Lake, 700 masl; Equity Silver Mine, 1400 masl; Morice River, 660 masl). Bedrock is commonly obscured by deep till (moraine) except along the northwest-southeast trending ridges that extend from Houston toward Francois Lake. Bedrock exposures occur near Houston, Equity Silver Mine and the bluffs to the east of Parrott Creek. Erosion has modified the landscape with meltwater channels cut into the underlying till and fluvial materials deposited as outwash. Streams tend to occupy glacial meltwater channels that flow toward the Bulkley River or Francois Lake (Morice River, Buck Creek, Maxan Creek, Tchesinkut Creek and Parrott Creek).

2.1.1 Burns Lake to the Morice River

The rolling and subdued terrain of the Nechako Plateau appears relatively benign in terms of erosion and landslides. However, erosion and landslides do occur. A natural erosional event in the early 1980s transported in the order of 250 000 m3 of sand and gravel from a glacial fluvial terrace into and down Tchesinkut Creek (Figure 2). The eroded gully appears very similar in shape to early post-glacial erosion cut channels through the glacial fluvial terrace above Tchesinkut Creek. Interestingly, Plouffe (1996, 2000) describes sediments in the area containing advance-phase glaciolacustrine sediments (refer to the Morice River section for a more detailed discussion on advance-phase glaciolacustrine sediments). Glaciofluvial sediments likely cover glaciolacustrine sediments at the Tchesinkut Creek erosional site. A natural diversion of a stream channel onto the glacial fluvial terrace caused the erosion. This type of event, sometimes called a washout-flow, has occurred catastrophically in similar glaciofluvial and glaciofluvial-glaciolacustrine sediments across British Columbia (refer to Schwab (2000, 2001a) and Geertsema et al. (2010) for a description of the processes involved in a washout-flow). A similar type of erosional event could occur through the inadvertent redirection of seasonally running streams by access trails or ditches.

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Figure 2: Tchesinkut Creek washout-flow occurred in the early 1980s. Note the point of natural stream diversion; washout site; flow down Tchesinkut Creek; and, the similarity in shape of the washout gully and the original gully down-cut through glaciofluvial-glaciolacustrine sediments.

Landslides have occurred along the northwest-southeast trending ridges that extend from Houston toward Francois Lake and presently active landslide movement is occurring along the ridge above Parrott Creek. The landslides at Buck Creek and Dungate Creek (Figure 3) are located about 25 km north of the pipeline corridor. These landslides occurred catastrophically prior to settlement in the Bulkley Valley at Houston. These events, although situated north of the pipeline corridor, demonstrate the instability of the volcanic bedrock.

Bedrock spread, a form of landslide movement, is active along the ridge above Parrot Creek within the general corridor for the pipelines (Figure 4). Geertsema et al. (2009) mentions these landslides but they remain unstudied. Bedrock geology along the ridge above Parrott Creek is an important factor in the instability of the ridge; it comprises flat and gently dipping lava that covers much older volcanic, sedimentary and intrusive rocks (Tipper and Richards 1976). The spread of upper bedrock layers on older rocks may continue gradually over a long period or may reach a point of catastrophic failure sometime in the future (Figure 5). The active bedrock spread occurring along the ridge near Parrott Creek may be an indication or foreshadowing of further movement at other locations along these ridges.

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Figure 3: Dungate Creek landslide located southeast of Houston; gently dipping lava beds are visible in the headscarp of the landslide.

Figure 4: Bedrock spread located east of Parrott Creek. The overlaying volcanic bedrock has split apart and is slowly moving away from the scarp along a deeper surface of much older volcanic bedrock.

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Figure 5: Bedrock spread lead to catastrophic landslides along a 2.5 km scarp (photo lower centre to upper right) and a 1.3 km scarp (photo distance) on the ridge above Parrott Creek. The landslides involved up to 150 and 50 Mm3 of material, respectively. The yellow dashed line delineates the landslides’ headscarp. The arrow shows the direction of movement.

2.1.2 Morice River

The pipeline corridor runs south of the Morice River for about 40 km crossing Owen Creek, Fenton Creek, Lamprey Creek, and Cedric Creek and then crosses the Morice River above Gosnell Creek and the Thautil River (Owen Creek 660 masl, Morice River crossing 730 masl). The present day Morice River floodplain occupies a large glacial meltwater channel cut through morainal material (till), glaciofluvial and glaciolacustrine sediments. Down cutting by the meltwater created low terraces and benches along the south side of the valley flat. Smaller streams presently cut down through the benched-terraced landform to reach the present day Morice River floodplain.

Advance-phase glaciolacustrine sediments were deposited in lakes formed as glaciers flowed out from the mountains advancing into the Bulkley and Morice valleys, blocking tributary valleys and damming rivers (Stumpf et al. 1997, 1998; Stumpf 2001). Advancing glaciers subsequently covered thick accumulations of lake sediments. Deep compact till and sometimes fluvial sediments that were also overridden and compacted by glacial ice generally bury advance-phase glaciolacustrine sediments. Postglacial bank erosion and contemporary erosion have been involved in large slump-earth flows along the Morice River, Houston Tommy Creek and Thautil River. Stumpf (2001) mapped the aerial extent and elevation of glaciolacustrine sediments along the Morice River at Houston (675 masl) south to Owen Lake (775 masl) and Houston Tommy Creek (865 masl). Stumpf did not study the Morice River to the west of Owen Creek. However, advance-phase glaciolacustrine sediments covered by till and other sediments likely occur up the Morice River valley to at least 775–800 masl. Glaciolacustrine sediments are visible in gullies and along the terrace scarps near Fenton Creek, Lamprey Creek and at about 800 masl roughly 10 km up the Thautil River.

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A series of large, rapid, low gradient flow slides have occurred in the advance-phase glaciolacustrine sediments along Houston Tommy Creek with the most recent occurring in the early 1960s; this involved about 15 Mm3 of material (Figure 6). The largest of the series of historical flow slides along Houston Tommy Creek is about 100 ha in size.

South of Houston along the Morice Forest Service Road (FSR), large slump earth flows were reactivated during a road up-grade in the mid 1970s and a massive wildfire in 1983; the largest is 1.5 km wide. The Forest Service in Smithers has detailed terrain maps of all the historic and active landslides between kilometre 6 and 27 on the Morice FSR (junction of the Morice FSR, Morice West FSR and Morice Owen FSR). Attempts to stabilize the road (Figure 7) have cost millions of dollars with the most recent stabilization work undertaken in February 2011 (per comm. B.C. Forest Service Engineering). The Morice West FSR also required stabilization at kilometre 33, with road realignment in 2004 and a rock buttress subsequently added to stabilize the road in 2008.

The proposed pipeline corridor crosses the glaciolacustrine sediments on the east and west side of Owen Creek. The Morice Owen FSR experienced considerable surface erosion of the fine glaciolacustrine sediments during construction in the early 1980s. The forest access road located along the west side of Owen Creek has experienced ongoing stability problems, within and to the south of the corridor. The corridor also crosses a large historic earth flow feature at approximately 1.5 km west of Owen Creek. Small landslide features are evident and active slope movement is likely occurring along the terrace scarps and slopes above Fenton Creek and Lamprey Creek.

The proposed pipeline crossing of the Morice River is upstream from the confluence of the Thautil River-Gosnell Creek and the existing forest road bridge. The terrain at the crossing is relatively flat, an expanse of glacial outwash sands and gravel; sediments at depth are unknown.

Figure 6: A low gradient flow slide in advance-phase glaciolacustrine sediment at Houston Tommy Creek. Older landslide scarps are indicated with arrows.

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Figure 7: A reactivated slump earth flow after an up-grade of the Morice Road. Attempts to stabilize the road have cost millions of dollars over the past 30 years.

2.2 Hazelton Mountains

The pipeline corridor crosses through the Hazelton Mountains commencing at Gosnell Creek and extending through the Clore Valley to Nimbus Mountain situated on the eastern boundary of the Kitimat Range, a distance of about 47 km. The Tahtsa Ranges sit to the South and the Bulkley Ranges to the North. The bedrock is volcanic and shows signs of slope instability on many of the steeper hillslopes.

2.2.1 Gosnell Creek

The Gosnell Creek valley is a broad open valley modified by glaciation. The valley extends about 30 km from the Morice River junction (720 masl) to the pass dropping toward the Clore Valley (1000 masl). Gosnell Creek drains the to the south and west and Heard Dome (Bulkley Ranges) to the north with elevations of about 1890 and 1950 masl, respectively. These mountains are part of the Hazelton Mountains physiographic region although the lower elevations of Gosnell Creek near its confluence with the Morice River are part of the Nechako plateau. Numerous glacial features (groves, lineation and drumlins) show the direction of ice movement within the valley. A blanket of ablation till (morainal material left as glacial ice melts), glaciofluvial sand and gravel, and present-day alluvium cover the valley bottom. Gosnell Creek occupies a glacial meltwater channel that connects through to the Morice River. Located at the junction of the Morice-Gosnell-Thautil valleys is a large flat expanse of glacial fluvial outwash.

The pipeline corridor follows the Crystal FSR along the south side of the Gosnell Valley. Here, a series of fluvial fans along a 10 km stretch are active during spring snowmelt and intense fall rainfall events, and episodically during summer thunderstorm activity (Wilford et al. 2005c). Wilford (2003) recorded 83 debris flood events on eight of the fans over the last 50 years.

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Erosion on these fans has posed considerable road maintenance challenges over the past 15 years. Two large alluvial-colluvial fans situated in the pass between the Gosnell and Clore watersheds are presently undisturbed. Maintenance for a pipeline across these fans in the Gosnell watershed will be challenging due to shifting channels and erosion. Crystal Creek and upper Gosnell Creek flow north out of the Morice Range. These streams carry large quantities of sediment and show considerable lateral bank instability at the proposed pipeline crossing locations; thus, these locations may also prove challenging for construction and maintenance.

2.2.2 Upper Clore

The corridor right of way through the upper Clore crosses the mountainous terrain of the Bulkley Ranges over a distance of about 17 km. The corridor extends from the pass between the Gosnell and Clore valleys (1000 masl) and drops to the valley flat above the Clore Canyon and junction with the Bernie River (800 masl). Then, two tunnels are proposed. The first runs from above the Clore Canyon through a mountain to the southwest of the Clore Canyon into a tributary of the Clore (620 masl). The second tunnel crosses through Nimbus Mountain to Hoult Creek, a tributary of the Kitimat River. Nimbus Mountain is the divide between the Bulkley Ranges of the Hazelton Mountains and the Kitimat Ranges of the Coastal Mountains.

The upper Clore River watershed is typical of the glaciated terrain found within the Hazelton Mountains; a broad wide valley with higher peaks shaped by alpine glaciation, and ice rounded mountains at lower elevations. Sediments deposited in close proximity to glacial ice cover the valley bottom. These sediments include morainal, glaciofluvial and glaciolacustrine sediments. Colluvium (material that has moved down slope under the influence of gravity) is more prevalent on and below steeper slopes.

Glaciofluvial landforms composed of silt, sand and gravel dominate the valley flat of the upper Clore River. The Clore River has cut down through these sediments to create a series of benches, terraces and scarps. The Clore Canyon entrance controls the base river level on the valley flat and will continue to control the rate of future down cutting. The proposed pipeline corridor dissects the active floodplain located immediately upstream from the Clore Canyon. These glaciofluvial and glaciolacustrine sediments within the Clore basin have not undergone anthropogenic disturbances; hence, the effect of proposed development is unknown.

2.2.3 Sackungen

Tipper and Richards (1976) mapped and described the bedrock within the southwest portion of the Hazelton Mountains. The bedrock is predominately volcanic; originating from volcanic activity centered in the (Telkwa Formation, Howson Facies). The reddish coloured well-bedded pyroclastic and flow rocks are of particular interest—large landslides have occurred in this volcanic bedrock within the Hazelton Mountains in recent years and have directly impacted the natural gas pipeline, roads and highways (Geertsema et al. 2009). The Zymoetz River rock avalanche occurred on June 8, 2002; it severed the natural gas pipeline and closed access to the Zymoetz River watershed for a year (Schwab et al. 2003; Boultbee et al. 2006; MacDougall and Hungr 2006). The most recent landslide occurred near Legate Creek in June 2007. Two lives were lost, Highway 16 was closed for 2.5 days, and travel was disrupted for two weeks. Large rock slide-avalanches have occurred about 25 km north of the upper Clore basin within the Kitnayakwa Watershed. The largest landslide has a length, width, and depth of 1.9 km, 350 m and 90 m, respectively; and volume of about 9 Mm3. This landslide, described by Schwab and Kirk (2002), occurred about 220 years ago with adjacent events occurring about 50 and 460 years ago (Figure 8). On an adjacent slope that had not failed, they identified linear features including uphill-facing scarps (antislope scarps) and troughs trending parallel to slope contours. A distinct fracture line ran along the trough in most features. The German term ―Sackungen‖ denotes these linear features in mountainous landscapes as slope sagging, gravitational spreading or deep-seated gravitational slope deformation. The presence of sackungen commonly indicates active slope movement and

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foreshadows a pending landslide (refer to Geertsema et al. 2010 for additional information on slope deformation and landslides).

Sackungen are prevalent in the volcanics on mountain slopes in the Kitnayakwa River valley and on forested slopes and alpine slopes in the Clore and Bernie watersheds. The landslide and sackungen features found on the west side of the Kitnayakwa occur within a well-bedded, fine-grained crystal-lithic red tuff. Harder andesitic rock overlies the red tuff. Weathering of the red tuff is extremely rapid in comparison to other harder rocks. This leads to fracturing and crumbling of the bedrock and general hillslope instability. Tipper and Richards (1976) found the fine-grained crystal-lithic tuff and lapilli tuff in association with other volcanic rocks throughout the Clore, Burnie, Kitnayakwa, and Zymoetz watersheds. Detailed geotechnical investigation is required to determine the stability of the bedrock and hillslope wherever these volcanic rocks and sackungen occur in areas proposed for development. Avoidance of these unstable volcanic rocks is generally the preferred engineering option.

Figure 8: A landslide in the red tuff volcanic bedrock, Kitnayakwa watershed, occurred about 220 years ago. The small arrows point to sackungen that indicate active slope movement that foreshadow a pending landslide.

2.2.3 Clore River to Nimbus Mountain

The proposed Clore tunnel connects the Clore basin above the canyon through to a tributary stream of the Clore at the base of Nimbus Mountain—a distance of about 7 km. Tipper and Richards (1976) show a complex array of faults near the Clore Canyon—these faults are readily discerned on aerial photographs (BC 88038 164–167). The bedrock in the canyon is highly fractured and deeply weathered. Unstable bedrock reaches up to 1200 masl or possibly 1400 masl and extends around the mountain into the adjacent tributary valley. The central core of the mountain is probably quartz diorite; however, the volcanic bedrock at mid and lower elevations is extensively gullied with visible landslide scarps. A large distinct landslide feature located on the west shoulder appears to be actively moving, deflecting the creek across the valley (Figure 9). A series of large cirque shaped landslide scarps sit at about 1400 masl with deep gullies connecting down to the Clore River Canyon. Lineations, probably sackungen, indicative of active slope movement extend across the hillslope through the landslide scarps (Figure 10). Clusters of smaller landslide scarps sit along and down the west

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shoulder of the mountain. The instability of the volcanic rock on this hillslope will place major constraints on pipeline development.

Figure 9: Google Earth image looking east from the general location of Nimbus Mountain. The volcanic bedrock below 1200 masl is unstable and extensively gullied with visible landslide scarps and void of trees. The large active landslide is pushing the creek across the valley.

Figure 10: Google Earth image looking to the southwest over the Clore River Canyon. Note the cirque shaped landslide scarps extending down to the Clore Canyon and the Sackungen (arrowed) that indicate slope deformation.

2.3 Kitimat Range

Nimbus Mountain at about 2300 masl along with Andesite Peak, Beta Peak, and Cumulus Mountain delineate the eastern side of the Kitimat Range. The upper Kitimat valley to the west is a steep narrow glaciated valley indicative of the granite and diorite bedrock of the coast intrusion (Duffell and Souther 1964). Andesite bedrock is also found in Andesite Mountain, Hoult Creek, and Nimbus Mountain (note: Nimbus Mountain is the location of the proposed pipeline tunnel connecting the Clore River valley through to Hoult Creek and the upper Kitimat River Valley). Bulkley Valley Centre for Natural Resources Research & Management 12

2.3.1 Hoult Creek

Hoult Creek is about 15 km long, originating in a cirque basin at 1100 masl on Nimbus Mountain. It joins Davies Creek shortly before entering the Kitimat River at about 260 masl. Landforms in the Hoult Creek watershed are typical of steep headwater basins within the Kitimat Range. Cirques ring the uppermost slopes with exposed bedrock and morainal and colluvial deposits of varying thickness. Valley walls are steep with exposed bedrock in the alpine and thin colluvium grading to deeper colluvium and morainal deposits on the lower slopes. Debris flow fans (colluvial-fluvial fans) coalesce along the lower slopes next to the creek. Steep gradient gully channels, originating in the alpine, collect and transport colluvial materials to the fans (Jakob et al. 2005; Wilford et al. 2005a, 2005b, 2005c). The steep gully channels and fans show evidence of frequent debris flows and snow avalanches—these hillslope processes pose ongoing concerns for pipeline development.

2.3.2 Upper Kitimat River Valley

The Kitimat River downstream of Hoult Creek-Davis Creek occupies a wider valley flat but is flanked and confined by steep mountain slopes rising to about 1500 masl. The elevation drop of the Kitimat River from the Davis Creek confluence to the Highway 37 Bridge is about 120 m (260–140 masl) over a distance of about 25 km; this is relatively steep indicative of the erosive power of the Kitimat River. Chist Creek from the north and McKay Creek from the south are the major tributaries that flow into the Kitimat River above the Highway 37 Bridge. The Kitimat River above the Highway 37 Bridge is a dynamic gravel bed river that has undergone considerable lateral movement across the floodplain over decades and often catastrophically during storms and floods. Lateral movement over time is from valley wall to valley wall through the middle reaches of the upper Kitimat River. Catastrophic movement of the channel has eroded the Kitimat Mainline forest access road on a regular basis. A pipeline could suffer the same fate.

Anecdotal information suggest that jökulhlaup or glacial outburst floods have originated in the headwaters of the Kitimat watershed in the late 1970s, late 1980s and as recently as February 2011. These glacial outburst floods have sent a sediment plume down the Kitimat River to tide water. They may occur catastrophically and may contribute to lateral and catastrophic channel movement on the upper Kitimat.

Surficial materials are complex within the valley. Glacial ice movement down the valley scoured and shaped bedrock outcrops and ridges and formed drumlin type features that parallel hillslopes from the valley bottom to the alpine. Colluvium and morainal materials of variable depth cover hillslopes. Deep deposits of glaciofluvial and glaciolacustrine sediment blanket lower elevations. Glaciomarine sediments often covered by other sediments occur up to an elevation of about 180–200 masl; extending to about 5 km upstream of the Kitimat- McKay River confluence. Interestingly, Hirsch Creek, situated to the south of the upper Kitimat, has eroded into a bank containing glaciomarine sediments. This resulted in a large slow moving slump-slide that closed the south access into the Hirsch drainage and is now an ongoing sediment source. Landslides also occur at mid elevations in glaciofluvial- glaciolacustrine sediments close to the entrance of McKay, Bolton, and Nalbeelah watersheds. In an assessment of terrain attributes associated with forest road development, Rollerson et al. (2001) found the glaciofluvial and glaciolacustrine terrain in the McKay and Bolton watersheds most problematic. Landslide problems are also associated with road development through glaciofluvial and glaciolacustrine terrain in the upper Kitimat valley.

The proposed pipeline corridor crosses the Hunter Creek alluvial fan situated at the outlet of a 63 km2 watershed. Historically, geomorphic activity in the watershed has resulted in the transport of sufficient volumes of material with deposition on the valley flat to push the Kitimat River across the valley. The fan appears to have remained relatively stable for a period of approximately 250 years prior to events in 1987-1992 (pers. comm. D. Wilford 2011). The fan underwent active channel shifting with a major channel avulsion occurring in 1987 and 1992 (Figure 11). Wilford (2003) recorded 13 flood events on the fan since 1950 but Bulkley Valley Centre for Natural Resources Research & Management 13

attributed the channel avulsions in 1987 and 1992 to a climbing road constructed up the fan and to a bridge placed below the apex of the fan that has constricted flow. Control works constructed above the Hunter Creek Bridge attempt to stabilize stream movement and protect the bridge. However, the current channel is unstable and changes will recur with an influx of a large amount of sediment to the fan apex.

Figure 11: Hunter Creek fan experienced a catastrophic channel avulsion in 1987 and 1992. The stream channel remains unstable even with control measures placed above the bridge.

Fluvial-colluvial fans are situated at the base of most gully-stream channels that extend from the alpine to the valley flat along the north side of the upper Kitimat Valley. The channels and fans show varying levels of debris flow activity (B.C. Ministry of Forests 2001; Bovis and Jakob 1982; Wilford et al. 2005c), with many experiencing torrents during extreme events in the fall of 1978 and 1992. Debris flows have also occurred down some channels all the way to the Kitimat River. These debris flows tend to occur episodically during strong summer convective storms and fall frontal rainstorms (Jakob et al. 2006) but in many respects are ―normal‖ occurrences for many debris flow channels (Wilford et al. 2009). Hence, they pose considerable problems for developed infrastructure such as pipelines and roads.

Chist Creek above the confluence with the Kitimat River cuts through glacial fluvial and glaciomarine sediments, forming terraces, steep scarps and benches. Ongoing bank erosion with the lateral movement of Chist Creek maintains a steep, high scarp along the west bank. Lateral stream movement above the confluence is in part a function of the large quantities of sediment transported into the reach from the Chist Creek watershed. The pipeline corridor, as proposed, crosses Chist Creek about 3 km upstream from the Kitimat River confluence, downstream from the Chist Creek bridge crossing. The corridor then climbs the glaciofluvial terrace onto the Onion Lake flats. Glaciomarine sediments are visible beneath the glaciofluvial sediments and are exposed at about 180 masl, downstream from the bridge crossing.

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2.4 Kitimat Trough

The proposed pipeline corridor crosses the Kitimat Trough on the Onion Lake Flats, crosses Cecil Creek then proceeds down the west side of the valley (east of Iron Mountain), crosses the Wedeene and Little Wedeene Rivers and continues past the city of Kitimat to tide water; a distance of about 50 km.

The Kitimat Trough is a broad north-south trending valley ranging in width from 5 km to 15 km. Mountains 1000–1500 masl rise abruptly on both sides of the trough. Bedrock is granodorite of the coastal intrusion (Duffel and Souther 1964; Woodsworth et al. 1985). The trough situated between Terrace and Kitimat is an uplifted fiord, filled with glacial and postglacial sediments (Clague 1983). Clague (1984) describes the surficial geology and chronology of deglaciation (Figure 12). Glaciomarine sediments occupy much of the valley floor. However, deep deposits of glaciofluvial sediments and postglacial materials that include present day floodplains, alluvial fans and bogs, cover large areas of glaciomarine sediments. Till and colluvium mantle bedrock hillocks (Iron Mountain) and lower slopes of the main valley walls. The largest lake in the trough is Lakelse Lake, situated on glaciomarine sediments between the glacial fluvial deltas of the Onion Lake Flats and the airport south of Thornhill.

2.4.1 Glaciomarine sediments

Glaciomarine sediments situated within the valley between Terrace and Kitimat have experienced both large prehistoric landslides and recent landslides—and more landslides will occur in the future. Therefore, a description of the glaciomarine sediments, origin and sensitivity to landslides is important and warrants further discussion. Geertsema’s (2004) thesis on landslides in sensitive glaciomarine sediments found between Terrace and Kitimat contains detailed technical information and references.

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Figure 12: The surficial geology between Kitimat and Terrace as described by Clague (1984). The diagram is adapted from Gottesfeld (1985).

Clague (1984) documents the history of glacial retreat up the Kitimat valley and a general description is contained in Gottesfeld (1985). In summary, the weight of glacial ice depressed the coast of British Columbia (isostatic depression), including the fiord valley occupied by the Kitimat Trough. Melting of glacial ice commenced between 12 000 to 13 000 years ago. The land surface remained depressed as sea levels rose. The glacier terminus was in contact with the sea as ice retreated inland and to the north, seawater flowed in. Douglas Channel south of Kitimat was ice-free about 11 000 years ago. Glacial retreat halted or stood still at three locations in the Kitimat Trough marked by an expanse of nearly flat sand and gravel deposits: the first, a large arcuate moraine and small outwash remnant near Kitimat; the second, the massive fan-delta of the Onion Lake Flats; and third, the fan-delta at the location of the Terrace airport. The well-preserved ice contact features north of the Onion Lake fan-delta and at Thornhill north of the Terrace airport suggest an extremely rapid retreat of glacial ice. The Terrace-Thornhill area was ice-free about 10 100 years ago when ice withdrew from the Thornhill ice-contact. Rebound of the valley floor was slow and continued until about 8000 years ago when local sea levels subsided to near present-day levels. Shorelines 11 000 years old sit at about 200 masl, 10 100-year-old shorelines at about 120 masl, and 9300-year-old shorelines at about 35 masl.

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A generalized description of the style of sediment deposition in the Kitimat Trough follows. Glacial melt water built a fan-delta of sand and gravel into the sea while finer sediments composed of rock flour, silt and clay minerals settled into a quieter marine environment beyond the fan-delta. A diagnostic feature of the fine sediments deposited in a marine environment (glaciomarine sediments) is the presence of marine shells. In salt water, clay and silt aggregate together to form floccules and settle in a random orientation. The resulting sediment has an open structure with high water content. The positive charge of the salt maintains the interparticle bond giving the sediment strength. Rainfall and groundwater (freshwater) gradually leach out salts from the glaciomarine clay with the gradual rebound of the land. At a lower salt content the repulsive forces between the particles is increased leaving saturated porous sediment prone to collapse. Collapse happens because of an imposed load caused by natural or human factors, for example, through an increase in surface loading, the removal of lateral support by stream bank undercutting or excavation, vibration by heavy equipment, earthquake shock, high water pressures and interruption of intertidal drainage. The result is the liquefaction of the sediment. The most notable difference in the character of the sensitive clay is the remarkable difference in strength between the undisturbed and remoulded glaciomarine sediments. The remoulded sediment behaves as a fluid. Hence, rapid landslide movement in glaciomarine sediments can occur on slopes as low as 2–3°.

2.4.2 Landslides in glaciomarine sediments

Recent landslides in glaciomarine sediments have occurred at Mink Creek and Lakelse Lake near Terrace and Khyex River near Prince Rupert:

 Septer and Schwab (1995) give an account of a flow-slide south of Terrace that occurred during rail bridge construction across Alwyn Creek. The landslide occurred at Mile 6.6 on the Canadian National railway line between Terrace and Kitimat on June 24, 1953. The landslide buried bulldozers and other construction equipment. A constructed S-shaped trestle bypasses the site.  In May and June 1962, piles of earth placed beside Highway 37 on sensitive glaciomarine clays likely increased the surface load and triggered two massive extremely rapid landslides (Figure 13). The landslides, about 11 Mm3 and 15 Mm3, flowed into Lakelse Lake carrying vehicles and equipment. Sections of the highway and a provincial park campground were destroyed (Clague 1978; Geertsema and Schwab 1997).  A landslide occurred sometime between mid December 1993 and early January 1994 into Mink Creek, a tributary of Lakelse River (Geertsema and Schwab 1995; Geertsema and Schwab 1996; Geertsema 2004; Geertsema and Torrance 2005; Geertsema et al. 2006b). The landslide likely started as a small failure along the creek that exposed sensitive clays in the cut bank. Once the sensitive materials were exposed, the landslide rapidly retrogressed along a slope of about 3°. About 23 ha slid and flowed into Mink Creek, filling the channel, extending downstream for about 1 km. Debris dammed the creek, raised water levels by 10 m and backed water up stream for 1200 m (Figure 14).  A similar landslide occurred in glaciomarine sediments 35 km east of Prince Rupert on November 28, 2003 (Schwab et al. 2004a; Schwab et al. 2004b). The flow slide involved 4.7 Mm3 of material, covered 32 ha, and moved rapidly on a 2.5° surface to in-fill the Khyex River over a length of 1.7 km and caused flooding upstream for a distance of 10 km. The landslide ruptured a natural gas pipeline and left the city of Prince Rupert and Port Edward without natural gas service for 10 days.

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Figure 13: This large swampy area is the location of the May 1962 Lakelse flow slide. Highway 37 crosses the landslide depletion zone. The Provincial Park is located middle left of the photo.

Figure 14: The Mink Creek flow slide rapidly retrogressed along a slope of about 3°, approximately 23 ha flowed into Mink Creek, extending downstream for 1 km.

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The recent landslides in the glaciomarine sediments were not the first. In the Kitimat Trough, there are hundreds of prehistoric landslides (Geertsema 1996, 1998; Geertsema and Schwab 1996, 1997; Geertsema 2004). Glaciomarine sediments line much of the valley floor between Kitimat and Terrace, although deep deposits of glaciofluvial sediment and post-glacial alluvium hide large areas. South of Kitimat, glaciomarine sediments are found up to 200 masl. Landslides have occurred in areas of exposed glaciomarine sediments (mud) and in some situations in mud blanketed by alluvium or glaciofluvial deposits. Numerous landslide features are located near Mink Creek, the Nalbeelah wet land complex, the foreslope of the Onion Lake flats, Cecil Creek and Deception Creek (Figure 15). Features are also visible along the terrace scarp of the Wedeene River and Little Wedeene River. Landslides dates extend from early post-glacial to the present with a third of the dated landslides falling between 3300 and 1900 years ago (Geertsema 2004). These landslides occurred during a cool wet period suggesting climate may control the overall incidence of landslides—possibly contributing to salt removal from the sediments. External triggering forces may also be a contributed factor, for example, stream bank undercutting or an earthquake.

2.4.3 Submarine flow slide

The present day Kitimat River transports sediment to a fan-delta at the fiord-head of Kitimat Arm. A fan-delta is a high-energy fluvial system subject to continuous and progressive sediment loading. Where underlain by soft marine muds, fan-deltas are prone to large-scale landslides.

 In April 1975, a large submarine flow slide occurred on the front of the fiord-head delta in Kitimat Arm south of the Kitimat Smelter; a portion of the headscarp was visible at Mickey’s Cove. The landslide, with an estimated volume of 55 Mm3, happened about 1 hour after an extreme low tide (Prior et al. 1982, 1984). The slide generated a tsunami 8.2 m high, causing considerable property damage (Murthy 1979; Murthy and Brown 1979). Site loading by construction activities during an extreme low tide was the probable landslide trigger.

These recent large landslides serve to show the sensitivity of the glaciomarine sediments in the Kitimat Trough and the marine sediments on the fan-delta at the fiord-head of Kitimat Arm. Natural and human caused factors trigger these landslides, as previously discussed. Pipeline construction will encounter glaciomarine sediments in the vicinity of Cecil Creek, Deception Creek, Wedeene River, Little Wedeene River, along the west side of Kitimat Arm and along the east side of Chist Creek. The pipeline corridor crosses features indicative of prehistoric flow slides near Cecil Creek through to the little Wedeene River. The presence of glaciomarine sediments and prehistoric flow slides suggest that there is a high probability for future large landslides; hence, landslides will likely break or disrupt pipeline service. Therefore, pipelines or other infrastructure placed on or crossing glaciomarine sediments must avoid areas that lie within potential flow slide depletion zones.

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Figure 15: Foreslope of the Onion Lake Flats (fan-delta) to the east of Cecil Creek. Roads follow arcuate ridges that outline prehistoric flow slides. The ridges are visible in the clearcut (photo centre) and in the area reforested (photo centre-left).

3 Regional Landslides

A wealth of information on hillslope geomorphology and landslides is presented in Geertsema et al. (2010) and specifically on landslides in west central B.C. in Clague (1978), Septer and Schwab (1995), Schwab et al. (2003), and Geertsema et al. (2006a, 2009). A map showing the distribution of large landslides in west central B.C. is not available although research in progress conducted by the B.C. Forest Service documents the location of hundreds of recent and prehistoric landslides (pers. comm. M. Sakals 2011). Landslides are associated with the volcanics found in the Hazelton Mountains; there are massive bedrock slides, complex rock slides and avalanches, bedrock spread, earth flows, debris flows-floods and mountain slopes showing evidence of on-going slope deformation (sackungen). Although landslides are not as numerous on the Nechako plateau, complex rock slides and bedrock spreads are associated with flat and gently dipping lava flows that cover much older volcanic and sedimentary rocks. Many slow and rapid moving earth flows have historically occurred in the advance-phase glaciolacustrine sediments found along the Morice River and its tributaries—natural and human disturbance have reactivated these earth flows. Debris flows and debris floods are common in the steep terrain of the Kitimat Range; most colluvial–fluvial fans have experienced events during episodic storms and even more ―normal‖ storm events. Sensitive glaciomarine sediments found up to 200 masl within the Kitimat Trough have experienced hundreds of large prehistoric flow slides. Recent large flow slides demonstrate the ongoing sensitivity of the glaciomarine sediments to natural or human caused factors.

Landslides and erosion have historically occurred at different rates within the physiographic units situated between Burns Lake and Kitimat. Landslide rates reflect the bedrock geology, surficial geology, and past and present day climate. An understanding of the past is commonly the basis for predicting the future. Inherent structural weaknesses in bedrock or surficial material combined with slope geometry render a slope unstable. Hence, the location of historic landslides can help predict the probable locations for future catastrophic landslides within a geographic area—sites of similar bedrock geology, surficial geology and geological processes (refer to Geertsema et al. (2010) for an in-depth discussion on the cause and triggers of landslides).

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4 Landslides and Linear Infrastructure

Landslides damage linear infrastructure such as pipelines, roads, railroads, and power transmission lines (Geertsema et al. 2009). Damage frequently occurs in the landslide runout zone after landslide debris has traveled, in some cases, many kilometres from the initial slide. This is evident in recent large complex landslides that transformed from bedrock slide to avalanche to debris flow (Schwab et al. 2003). Geertsema and Cruden (2008) document long runout landslides. Six large rock slides occurred in west central B.C. since 1978, five since 1999, and four since 2002. Three of the six rock slides severed the natural gas pipeline, for example, the Howson landslides in Telkwa pass in 1978 and 1999, and the Zymoetz landslide in 2002 (Geertsema et. al 2009). All these rock slides had a long runout with the longest travel distance up to 4.3 km along travel angles as low as 9°. Therefore, the potential for damage to linear infrastructure extends to landslides that initiate well outside the construction corridor (Geertsema and Clague 2011). Catastrophic or slow movement will sever or deform a pipeline where it crosses unstable terrain. For example, a transmission tower within the Telkwa watershed situated on a massive slow moving landslide requires periodic adjustment as the landslide mass moves down slope—a pipeline would not withstand such movement. Large landslides in glaciomarine sediments commonly start with a small landslide from bank erosion or loading that exposes a layer of sensitive material and rapidly retrogresses with a flow of material from the displacement basin. Earth flows and slides damage infrastructure located in the zone of depletion by carrying it along during movement. The Khyex River flow slide in sensitive glaciomarine mud is an example where the landslide retrogressed up a 2.5° slope from the riverbank consuming 32 ha and rupturing the natural gas pipeline. Pipelines or other infrastructure, if crossing glaciomarine sediments, must avoid areas within potential depletion zones.

5 Climate and Landslides

Intense rainfall commonly triggers shallow landslides such as debris slides and flows. Schwab (1997, 1998 and 2001b) dated debris slides, avalanches, and flows using tree ring analysis. He concluded from the work that most debris slides, debris avalanches and debris flows occurred during six major storms over the past 150 years. Most landslides (31% of total inventoried) occurred in the fall of 1917. This rainstorm event encompassed the B.C. north coast including the Kitimat Range. The B.C. north coast has yet to re-experience meteorological conditions similar to the event of October 28 to November 19, 1917. The most recent meteorological event that caused considerable destruction to transportation roads and bridges occurred on October 30 - November 1, 1978 (Septer and Schwab 1995). Meteorological conditions that prevail during landslide triggering storms along the B.C. north coast commonly involve a warm frontal system followed by a cold front that extends south to incorporate subtropical moisture (Jakob et al. 2006).

Deep-seated landslides such as large rock slides, earth flows, and flow slides tend to have longer hydrological response times. Responses to increased precipitation take place seasonally, annually or over a number of years; it takes time for water to penetrate deeply into unstable zones within a landslide mass. Geertsema et al. (2006b, 2007) found some landslides occurred after long periods of above average precipitation, for example, the earth flow-spread at Mink Creek occurred during the winter of 1993-94 after a 10 year wet period; in addition, the large number of prehistoric flow slides found between Terrace and Kitimat occurred during a period of wetter climatic conditions. The rock slide-avalanche-flow at Zymoetz River June 8, 2002 and Harold Price June 23, 2002 occurred after a winter of above average snowfall (Schwab et al. 2003). The Sutherland rock slide-debris flow occurred on July 13, 2005 after a wet spring (Blais-Stevens et al. 2007). The Todagin River rock avalanche of October 3, 2006 followed an abnormally wet summer (Sakals et al. 2011).

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Egginton (2005) found that long periods of increasing precipitation and temperature are associated with most of the dated large landslides across northern B.C. She also notes that the climate of northern B.C. has become warmer and wetter since the beginning of instrumental observations but that the apparent trends are complex due to ocean-atmosphere oscillations such as the Pacific Decadal Oscillation and the El Niño Southern Oscillation. Catastrophic landslides at high elevations in mountainous terrain are also responsive to increased temperature (Evans and Clague 1994; Holm 2004). Melting of glaciers has resulted in the debuttressing of unstable rock slopes causing deep-seated slope deformation. The melting of ice in rock glaciers has caused the collapse of unstable rubble, for example, the Howson landslide in 1999, and the Harold Price landslide in 2002 (Schwab et al. 2003). Climate change scenarios based on data obtained from the Canadian Institute for Climate Studies predict a progressively warmer and wetter climate for Terrace (Geertsema et al. 2006; 2009). There is evidence to suggest that landslides in west central B.C. have recently increased (Geertsema et al. 2007). Considering this fact with the presented climate change scenarios, large landslide occurrence will likely increase and thus the likelihood of landslides destroying or disrupting pipelines, and other linear infrastructure, will also increase.

The above discussion tends to look at large events, big storms and catastrophic large landslides, however it should not be ignored that many small landslides and erosion events occur across the landscape at a much higher frequency. Although small, these events can also disrupt linear infrastructure, such as pipelines, and given their higher frequency, they are more likely to rupture pipelines on an ongoing basis.

6 Conclusion

The geology and geomorphology of west central B.C. is complex and destructive landslides are common. Various landslide types have occurred along the proposed pipeline corridor within the defined physiographic units:

 bedrock spread in flat lying volcanic rock of the Nechako Plateau;  earth flows in advance-phase glaciolacustrine sediments;  rock slides and rock avalanches in the weak volcanic rock of the Hazelton Mountains;  debris flows in the steep valleys of the Kitimat Range; and  flow slides in the glaciomarine sediments of the Kitimat Trough.

These landslides serve to illustrate the terrain instability along the pipeline corridor—from mountaintop to valley bottom. Landslides have damaged pipelines in west central B.C. Long runout landslides have traveled many kilometres from the initiation zone; therefore, the potential for damage to pipelines extends to unstable terrain and landslides that start well outside the construction corridor. Flow slides in glaciomarine muds have consumed pipelines located in depletion zones; therefore, pipeline locations must avoid potential depletion zones. Periods of increasing precipitation and temperature are associated with recent large landslides in west central B.C. Climate change scenarios project a warmer and wetter climate; therefore, the likelihood of landslide-mass erosion events affecting a pipeline or other linear structures will increase with a probable increase in landslide occurrence.

Recognition and avoidance of unstable terrain is the most efficient and cost effective method for management in landslide prone terrain. This requires detailed terrain stability mapping and geotechnical investigation to identify unstable slopes, runout zones, and depletion zones. However, avoidance of unstable terrain is a difficult management strategy to adopt over many sections of the proposed pipeline corridor. Therefore, the unstable mountainous terrain across west central B.C. is not a safe location for pipelines. Eventually a landslide will sever a pipeline. Although difficult, an alternative, safer route through B.C. needs investigation.

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7 Acknowledgements

Mr. Brian Edmison initiated a stimulating discussion on the topic of geomorphology along the pipeline corridor through west central B.C. and generously provided funding support for the preparation of this paper through the Bulkley Valley Centre for Natural Resources Research & Management. Dr. Brent Ward, Dr. David Wilford, Dr. Marten Geertsema, and Dr. Matt Sakals reviewed the draft manuscript. Their useful comments, suggestions, expertise and time are much appreciated. The extensive local knowledge of Mr. Ted Wilson and Mr. Dino Diana provided reliable dates for geomorphic events within the Kitimat River Watershed.

8 Literature Cited

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Geertsema, M., and J.K. Torrance. 2005. Quick clay from the Mink Creek landslide near Terrace, British Columbia: geotechnical properties, mineralogy, and geochemistry. Can Geotech J 42:907–918. Bulkley Valley Centre for Natural Resources Research & Management 24

Gottesfeld, A. 1985. The geology of the northwest mainland (The geology and paleontology of the Skeena, Nass and Kitimat drainages of British Columbia). Kitimat Centennial Museum Association, Kitimat, B.C.

Holland, S.S. 1976. Landforms of British Columbia: a Physiographic Outline, 2nd Edition. B C Department of Mines and Petroleum Res., Bull. 48. Victoria, B.C.

Holm, K., M.J. Bovis, and M. Jakob. 2004. The landslide response of alpine basins to post-Little Ice Age glacial thinning and retreat in southwestern British Columbia. Geomorphology 57:201–216 Nat Hazards (2009) 48:59–72.

Hungr, O. 2005. Classification and Terminology. In: Debris-flow hazards and related phenomena. M. Jakob O. and Hungr (editors). Springer Verlag, Heidelberg, Germany, in association with Praxis Publishing Ltd., Chichester, UK.

Jakob, M., M. Bovis, and M. Oden. 2005. The significance of channel recharge rates for estimating debris-flow magnitude and frequency. Earth Surf. Process. Land. 30:755–766.

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Schwab, J.W. 1997. Historic debris flows, British Columbia north coast. In: Proc., Forestry geotechnique and resource engineering, Richmond, B.C. BiTech Publishers, Vancouver, B.C.

Schwab, J.W. 1998. Landslides on the Queen Charlotte Islands: processes, rates, and climatic events. In: Carnation Creek and Queen Charlotte Islands fish/forestry workshop: applying 20 years of coastal research to management solution. D.L. Hogan, P.J. Tschapinski, and S Chatwin (editors). B.C. Min. For. Res. Br., Victoria, B.C. Land Manag. Handb. No 41. pp 41- 47. http://www.for.gov.bc.ca/hfd/pubs/docs/Lmh/LMH41-1.pdf

Schwab, J.W. 2000. Donna Creek washout-flow. B.C. Min. For., Prince Rupert For. Reg., For. Sci. Sect., Exten. Note No. 42. http://www.for.gov.bc.ca/rni/Research/Extension_notes/Enote42.pdf

Schwab, J.W. 2001a. Donna Creek washout-flow: what did we learn? In: Terrain stability and forest management in the interior of British Columbia: Workshop proceedings. May 23–25, 2001. Nelson, British Columbia, Canada. P. Jordan and J. Orban (editors). B.C. Min. For., Res. Br. Victoria, B.C. Tech. Rep. No. 003. pp. 1– 13. http://www.for.gov.bc.ca/hfd/pubs/Docs/Tr/Tr003/Schwab.pdf

Schwab, J.W. 2001b. Dendrochronology of debris flows on British Columbia north coast districts. In: Terrain stability and forest management in the interior of British Columbia: Workshop proceedings. May 23–25, 2001. Nelson, British Columbia, Canada. P. Jordan and J. Orban (editors). B.C. Min. For., Res. Br. Victoria, B.C. Tech. Rep. 003, p 217.

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Schwab, J.W., M. Geertsema, and S.G. Evans. 2003. Catastrophic rock avalanches, west- central B.C., Canada. In: 3rd Can. Conf. on Geotech. and Nat. Hazards, Edmonton, Alta, pp. 252–259.

Schwab, J.W., A. Blais-Stevens, and M. Geertsema. 2004a. The Khyex River landslide of November 28, 2003, Prince Rupert British Columbia, Canada. Landslides 1:243–246.

Schwab, J.W., A. Blais-Stevens, and M. Geertsema. 2004b. The Khyex River flowslide, a recent landslide near Prince Rupert, British Columbia. In: 57th Can. Geotech. Conf., Quebec City, Que. pp. 14–21.

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Report 4: July 2011 An Audit of the Environmental Assessment Office’s Oversight of Certified Projects

www.bcauditor.com Location: 8 Bastion Square Victoria, British Columbia V8V 1X4

Office Hours: Monday to Friday 8:30 am – 4:30 pm

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Reproducing: Information presented here is the intellectual property of the Auditor General of British Columbia and is copyright protected in right of the Crown. We invite readers to reproduce any material, asking only that they credit our Office with authorship when any information, results or recommendations are used. 8 Bastion Square Victoria, British Columbia Canada V8V 1X4 Telephone: 250-419-6100 Facsimile: 250-387-1230 Website: www.bcauditor.com

The Honourable Bill Barisoff Speaker of the Legislative Assembly Province of British Columbia Parliament Buildings Victoria, British Columbia V8V 1X4

Dear Sir:

As mandated under Section 11 of the Auditor General Act, I have the honour to transmit to the Speaker of the Legislative Assembly of British Columbia my 2011/2012 Report 4: An Audit of the Environmental Assessment Office’s Oversight of Certified Projects.

This audit examined the post-certification stage of government’s environmental assessment process. The report makes six recommendations to improve the effectiveness of the Environmental Assessment Office in this area.

I look forward to receiving updates on the Environmental Assessment Office’s progress in implementing the recommendations.

John Doyle, MAcc, CA Auditor General

Victoria, British Columbia July 2011 T a b le of C o n te n ts

Auditor General’s Comments 5

Executive Summary 6

Summary of Recommendations 7

Response from the Environmental Assessment Office 8

Detailed Report 11

Background 11

Audit Objectives and Scope 15

Overall Conclusion 16

Key Findings and Recommendations 16

Looking Ahead 21

Appendices 22

Appendix A: Examples of reported environmental monitoring good practices 22

Appendix B: Examples of monitoring responsibilities and compliance mechanisms for different types of certificate commitments 24

Appendix C: Map of 115 projects that have received environmental assessment certificates in British Columbia 25 Aor u d i t G e n e ral’ s C o m m e n t s

When major projects such as mines, dams or tourist destination Auditeam T resorts are undertaken in the province, British Columbians expect that any potentially significant adverse effects (whether Morris Sydor environmental, economic, social, heritage and/or health related) Assistant Auditor General will be avoided or mitigated. The Environmental Assessment Office John Doyle, MAcc, CA is expected to provide sound oversight of such projects. However, Wayne Schmitz Auditor General this has not been happening. Executive Director

The audit found that the Environmental Assessment Office cannot Amy Hart assure British Columbians that mitigation efforts are having the Manager intended effects because adequate monitoring is not occurring and follow-up evaluations are not being conducted. We also found that Tanya Wood information currently being provided to the public is not sufficient to Performance Audit Associate ensure accountability.

I am encouraged that, during the course of our audit, the Environmental Assessment Office introduced some key measures to address some of the noted deficiencies, such as appointing a Director of Strategy and Quality Assurance. Government has accepted our six recommendations, and I look forward to receiving updates on their implementation through our follow-up process.

My thanks to the staff involved for the cooperation and assistance they provided to my Office during this audit.

John Doyle, MAcc, CA Auditor General July 2011

5

Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’s Oversight of Certified Projects E x ec u t i v e S u m m ar y

In British Columbia, major projects, such as mines or power plants, must be considered for an environmental assessment prior to their development. Such an assessment is intended to consider not only the potential environmental effects of the project, but its potential economic, social, heritage and health effects as well.

If a project is approved following that process, the provincial government then grants an environmental assessment certificate that sets out the conditions and commitments the project proponent is legally bound to meet. We concluded the following: The agency responsible for conducting environmental assessments in the province is the Environmental Assessment Office (EAO), which The EAO’s oversight of certified projects is not reports to the Minister of Environment. The EAO is also responsible for overseeing approved projects to ensure that proponents comply sufficient to ensure that potential significant with all certificate conditions and commitments. adverse effects are avoided or mitigated.

In this audit, we focused on the post-certification part of the ŠŠ Specifically, the EAO is not ensuring that: environmental assessment process. We did not evaluate that portion of the process leading up to the approval of a project. •• certificate commitments are measureable and enforceable;

We carried out the audit to determine whether the EAO is: •• monitoring responsibilities are clearly defined; and

ŠŠ providing oversight to ensure that potential significant adverse •• compliance and enforcement actions are effective. effects of certified projects are avoided or mitigated; ŠŠ The EAO is not evaluating the effectiveness of environmental ŠŠ evaluating the effectiveness of environmental assessment assessment mitigation measures to ensure that projects are mitigation measures; and achieving the desired outcomes.

ŠŠ making appropriate monitoring, compliance and outcome ŠŠ The EAO is not making appropriate monitoring, compliance and information about certified projects available to the public. outcome information available to the public to ensure accountability.

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects S u m m ar y of R eco m m e n dat i o n s

We recommend that the Environmental Assessment Office:

1 Ensure commitments are clearly written in a measureable and enforceable manner. 2 Continue to work with the Ministry of Environment to finalize a policy framework that will provide provincial guidance on environmental mitigation.

3 Clarify the post-certification monitoring responsibilities and compliance mechanisms for each commitment.

4 Develop and implement a comprehensive compliance and enforcement program that includes an integrated information management system to monitor project progress and ensure compliance.

5 Conduct post-certificate evaluations to determine whether environmental assessments are avoiding or mitigating the potentially significant adverse effects of certified projects.

6 Provide appropriate accountability information for projects certified through the environmental assessment process.

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects R es p o n se fro m the E n v i ro n m e n tal A ssess m e n t O ff i ce

The Environmental Assessment Office (EAO) appreciates EAO administers a neutral, transparent assessment process that the opportunity to receive and respond to the findings and considers the views of local, provincial and federal government recommendations of the audit conducted by the Office of the Auditor agencies, First Nations and the public. EAO obtains technical General on EAO’s oversight of certified projects. It is critically advice from provincial government agencies across government important that environmental assessment in British Columbia is and any other external sources it deems necessary to conduct effective and rigorous to ensure public confidence in the process and objective assessments that examine the potential for adverse to make certain that economic development is carried out in ways that environmental, economic, social, health and heritage effects. Once preserve and support the integrity of the environment, communities the EAO determines it has sufficient information needed to reach and the economy. Ensuring that environmental assessment in its conclusions respecting potential adverse effects, the EAO British Columbia has a high degree of integrity is a vital element develops an assessment report within the requirements set out by the of supporting government’s goals relating to families, jobs and the Environmental Assessment Act, which along with recommendations protection of the environment. from the Executive Director, are provided to ministers for decision. Should ministers decide to certify a project, the environmental While the audit focused on the post-certification part of the assessment certificate provides the overall framework for subsequent environmental assessment process, the EAO also considers the permitting decisions and activities undertaken by government process leading up to certification as integral to achieving high quality agencies and proponents (see Environmental Assessment Project environmental assessment and ensuring that potential significant Approval Framework). adverse effects are avoided or mitigated. As part of its process of continuous improvement,EAO Response EAO to OAG is undertaking Audit several initiatives designed to strengthenJune 24, 2011 the entire environmental assessment process, including pre and post-certification phases.

8 EAO acknowledges the audit findings concerning challenges and opportunities during the post- certification phase of environmental assessment and has, in fact, been working with other government agencies to enhance its activitiesAuditor in this G areaeneral prior of British to the Columbia audit .| T 2011he audit Report findings 4 will serve to An Audit of the Environmental Assessment Office’sO versight of Certified Projects strengthen EAO’s prioritization of this important component of environmental assessment.

Response to Specific Recommendations

1. Ensure that commitments are clearly written in a measureable and enforceable manner.

Response EAO agrees with this recommendation and has been focused on making commitments measurable and enforceable since 2009.

In June 2011, EAO initiated a process to revise its environmental assessment certificate to make certificate commitments measurable and enforceable, and will continue to make this a priority.

2

R es p o n se fro m the E n v i ro n m e n tal A ssess m e n t O ff i ce

EAO acknowledges the audit findings concerning challenges and Recommendation 3: Clarify the post-certification opportunities during the post-certification phase of environmental monitoring responsibilities and compliance mechanisms for each assessment and has, in fact, been working with other government commitment. agencies to enhance its activities in this area prior to the audit. The audit findings will serve to strengthen EAO’s prioritization of this Response important component of environmental assessment. EAO agrees with this recommendation, and as part of the process for revising environmental assessment certificate commitments, EAO Response to Specific Recommendations will ensure that monitoring responsibilities will be specified for each certificate commitment. Recommendation 1: Ensure that commitments are clearly written in a measureable and enforceable manner. Recommendation 4: Develop and implement a comprehensive compliance and enforcement program that includes Response an integrated information management system to monitor project EAO agrees with this recommendation and has been focused on progress and ensure compliance. making commitments measurable and enforceable since 2009. Response In June 2011, EAO initiated a process to revise its environmental EAO is in the process of enhancing its monitoring, compliance assessment certificate to make certificate commitments measurable and enforcement program. As part of this process, EAO is and enforceable, and will continue to make this a priority. pursuing partnerships with other government agencies to ensure effective monitoring, compliance and enforcement which has Recommendation 2: Continue to work with the already led to improved and on-going communication about roles Ministry of Environment to finalize a framework that will provide and responsibilities. provincial guidance on environmental mitigation. EAO has initiated discussions with other government agencies to Response examine opportunities to build on existing information systems The EAO has provided, and will continue to provide, input to this and identify future needs in order to effectively monitor and track important policy initiative being led by the Ministry of Environment. project environmental certificate conditions and commitments, We believe that the framework will enhance consistency and certainty project progress, permitting, and monitoring, compliance and regarding the application of mitigation and compensation policies and enforcement functions. best practices across all environmental assessments. Recommendation 5: Conduct post-certificate The environmental assessment must take into account and consider evaluations to determine whether environmental assessments are government policies as part of the environmental assessment avoiding or mitigating the potentially significant adverse effects of process. However, the EAO’s conclusions regarding the significance certified projects. of potential adverse effects, and the specific mitigation measures required, are developed based on a variety of information sources that Response the EAO deems necessary. In addition, EAO’s conclusions will vary The monitoring, compliance and enforcement program that EAO depending on the context of the effects undergoing assessment and is currently enhancing will include a framework to monitor and are case-specific. evaluate project effects and will use evaluation data to support the advancement of environmental assessment knowledge and practice. This means that EAO will fully take into account the policy This framework will be developed in consultation with other agencies framework as we work with proponents, First Nations, the public and will include provisions for participating agencies to also benefit and other government agencies to develop project-specific from monitoring and evaluation data. mitigation and compensation measures. This approach is consistent with our accountability to provide objective, neutral and sound recommendations to ministers for each environmental assessment.

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects R es p o n se fro m the E n v i ro n m e n tal A ssess m e n t O ff i ce

Recommendation 6: Provide appropriate accountability information for projects certified through the environmental assessment process.

Response As part of EAO’s enhanced monitoring, compliance and enforcement program, information will be made available to the public concerning project monitoring and compliance. Once the program is functional and generating the accountability information, EAO will make this information transparent and available to the public on its website and through other reporting mechanisms such as the Annual Service Plan Report.

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects D eta i led R e p ort

Background Environmental Assessment in British Columbia

In British Columbia, major projects, such as mines or power plants, must be considered for an environmental assessment prior to their development. Such an assessment is important to ensure that major projects meet the goals of environmental, economic and social sustainability. The assessment process is also needed to ensure that the issues and concerns of the public, First Nations and government agencies are considered. The EAO does not provide oversight for projects that are assessed by other responsible ministries and agencies. For example, the Clean The agency responsible for environmental assessments in the province Energy Project Office coordinates the approval of hydroelectric, is the Environmental Assessment Office (EAO). The EAO is a thermal or other power plants that are not assessed under the provincial agency created in 1995 by provincial statute (Environmental Environmental Assessment Act. Assessment Act and five Regulations1). An Executive Director, appointed by the Lieutenant Governor in Council, heads the EAO. When the assessment has been completed, the proponent’s application for an “environmental assessment certificate,” the EAO’s Under the Environmental Assessment Act, projects become reviewable assessment report, and any Executive Director’s recommendations are in three ways: submitted for decision to the Minister of Environment and the other ministers responsible. For example, the Minister of Energy and Mines ŠŠ Reviewable Projects Regulation – The Act gives power to the participates in decisions related to the environmental assessments of EA Office to evaluate proposed major projects that are reviewable proposed mine projects. if they meet certain thresholds. A broad range of projects are automatically reviewable if they equal or exceed thresholds for The EAO employs nearly 55 staff and has a budget of approximately total project footprint, production volume and/or other factors. $8.75 million. This includes $1 million in grants to First Nations for Most major projects are reviewed based on this regulation. funding capacity to participate in the EA process and $1.3 million to other government agencies to provide technical expertise to support ŠŠ Proponent “Opt In”– For projects that are not automatically the EAO in the assessments. The EAO estimates that the potential reviewable, a proponent may see advantages in requesting a formal capital investment value for projects in the environmental assessment environmental assessment review. process in 2010/11 will exceed $30 billion.

ŠŠ Ministerial Designation – The Minister of Environment may 219 projects have undergone or are currently undergoing an also direct that an assessment be conducted on a project if he environmental assessment. Nearly 53% (115, as of April 1, 2011) have or she believes that the project may have a significant adverse been approved (see Exhibit 1). environmental, economic, social, heritage or health effect, and that the designation is in the public interest.

1 (1) Concurrent Approval Regulation, (2) Prescribed Time Limits Regulation, (3) Public Consultation Policy Regulation, (4) Reviewable Projects Regulation, (5) Transition Regulation

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects D eta i led R e p ort

Exhibit 1: Status of projects (219) that have undergone Exhibit 2: Certified projects by sector (115 as of April 1, 2011) or are currently undergoing5% an environmental assessment – 1995 to present Energy 51

Mining 27 0.5% Water Management 11 6.8% 7.3% Transportation 9 Waste Disposal 7

14.6% Industrial 4 52.5% Tourist Destination Resorts 3

Other 3

18.3% Total 115

Source: Environmental Assessment Office

Environmental Assessment Process Approved - 115 93% Under Review - Temporarily Inactive - 40 The environmental assessment process in British Columbia provides a Under Review - Active - 32 mechanism for reviewing major projects to identify potential adverse Terminated or Withdrawn - 16 effects, identify measures to avoid, reduce or mitigate these effects, EA Deemed Unecessary - 15 Refused Certification - 1 and assess the net impacts. In an application, a proponent must describe: the predicted environmental, economic, social, heritage and health effects of the project; and the proposed measures to mitigate Source: Environmental Assessment Office those impacts.

Energy and mining sector developments account for nearly 70% of the For each of the five types of impacts – environmental, social, certified projects. The remainder are industrial, water management, economic, heritage and health – the proponent must consider waste management, transportation, food processing and tourist components that are important to stakeholders. These components destination resort projects (see Exhibit 2). may include, for example, environmental features, sites of social and cultural importance, First Nation community interests, business opportunities, and labour income generated. Proponents often hire consultants to help them with this process.

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects D eta i led R e p ort

When assessing these components, the EAO considers cumulative The working group advises the EAO about issues related to the impacts. Information regarding cumulative impacts can be proposed project’s assessment and helps to assess the adequacy of any obtained through: proposed mitigation measures.

ŠŠ examination of approved land use plans that designate the most The EAO will only refer a project to the Ministers for a decision once appropriate activities on the land; it is satisfied that:

ŠŠ review of current conditions as set out in baseline studies that ŠŠ federal and provincial government assessment and impact factor in effects of prior development; management expectations have been addressed;

ŠŠ identification of potential overlapping impacts that may be the ŠŠ there has been appropriate consultation with First Nations that result of other nearby developments; and may be impacted by the project and that those First Nations’ interests have been appropriately considered and addressed; and ŠŠ identification of predicted impacts from future developments that are reasonably likely to proceed. ŠŠ there has been appropriate public consultation, and issues raised by the public that are within the scope of the review have been The EAO considers its environmental assessment to be rigorous and appropriately considered and addressed. comprehensive (see Exhibit 3). EAO staff rely on the advice of experts from government agencies, and each project has a dedicated working Over two-thirds of the projects now undergoing a provincial group with representatives from stakeholder groups such as: environmental assessment also require a federal assessment under the Canadian Environmental Assessment Act. ŠŠ provincial ministries, including: For projects that fall under both provincial and federal assessment •• the Ministry of Environment, who advise on environmental responsibility, an agreement ensures that the two government protection issues such as air and water quality, levels will carry out a cooperative environmental assessment while retaining their respective decision-making powers. The purpose of this •• the Ministry of Forests, Lands and Natural Resource Operations, harmonized approach is to create greater efficiency and effectiveness who advise on issues regarding ecosystems, wildlife and for both the private and public sectors. hydrology, and There is no guarantee, however, that the two governments will arrive •• the Ministry of Energy and Mines, who advise on issues at the same recommendation as their respective legislative mandates regarding mines such as water quality and acid rock drainage; differ. The project cannot proceed if it does not receive the support of both governments. In these cases, the proponent may redesign or ŠŠ federal agencies, including Fisheries and Oceans Canada and abandon the project. Environment Canada;

ŠŠ First Nations;

ŠŠ local governments; and

ŠŠ as appropriate, neighbouring jurisdictions (for example, Alberta or Washington State).

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects D eta i led R e p ort

Exhibit 3: Environmental assessment in British Columbia

Project Permitting & Project Operations & Upkeep & Description Approval Implementation Maintenance Improvements

Primary Focus of This Audit

Information Application Application Project Requirements Application Review Project Enters Prepared Assessment for Application Evaluated for Decision by Review and Report Public comment Completeness Public comment Ministers Process Submitted period period

Rejection Project Abandoned or redesigned Source: Adapted by the Office of the Auditor General from Environmental Assessment Office information.

Pre-application Pre-certification Pre-certification Pre-certification Post-certification (no timeline) Evaluation Application Decision (pre-construction, construction, (30 days) (180 days) (45 days) operation, reclamation and decommissioning activities)

Working Group Review

Public Accountability Reporting

Source: Adapted by the Office of the Auditor General from Environmental Assessment Office information

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects D eta i led R e p ort

The Environmental Assessment Certificate The EAO relies on other agencies to ensure that certain certificate conditions and commitments are met, particularly the Ministry of An environmental assessment certificate is a legal document that a Forests, Lands and Natural Resource Operations and the Ministry proponent must adhere to for the life of the project. of Environment.

Project requirements are separated into two main sections: Proponents also require permits from these agencies in order to conditions and commitments. undertake work that may have an impact on water quality, air quality, protected habitat and other values. Some of the commitments ŠŠ Conditions – Each certificate contains approximately 10 identified in an environmental assessment certificate are often conditions. Conditions address legal procedural issues common addressed in greater detail in an associated permit. The EAO is only to every project certified under the Environmental Assessment Act. responsible for ensuring compliance with the EA certificate and They are essential and do not change significantly from project is not responsible for ensuring compliance with permits. to project. Examples of conditions include the requirement to adhere to the details of the application, compliance reporting Audit Objectives requirements for the project, duration of the certificate, and reasons for suspension, cancellation or amendment of the certificate. and Scope

ŠŠ Commitments – Commitments, unlike conditions, are project- We carried out the audit to determine whether the EAO is: specific and critical to reducing adverse project impacts. Some Š certificates identify over 100 commitments. Š providing oversight to ensure that potential significant adverse effects of certified projects are avoided or mitigated; Commitments are made by a proponent to: ŠŠ evaluating the effectiveness of environmental assessment •• avoid or mitigate potential significant adverse environmental, mitigation measures; and economic, social, heritage and health effects of a project; and ŠŠ making appropriate monitoring, compliance and outcome •• address aboriginal rights (established and asserted), including information about certified projects available to the public. treaty rights. We developed the audit objectives and criteria from the following sources: Commitments are prepared by the proponent with guidance from the Š EAO and other agencies but are finalized by the EAO. Once the certificate Š requirements of British Columbia’s Environmental Assessment Act; is issued, the conditions and commitments are legally binding. ŠŠ guidance material prepared by the Environmental The EAO is responsible for monitoring certified projects throughout their Assessment Office;2 life to ensure that proponents comply with their certificate conditions and Š commitments. Both the Environmental Assessment Act and the EAO’s user Š national and international good practice principles for guide clearly state the expectation that proponents will comply with the environmental impact assessments, as well as environmental environmental assessment certificate. Proponents are required to track compliance and enforcement; compliance and report on their progress at specified milestones such as ŠŠ interviews with staff of the Environmental Assessment Office; and construction, operation and decommissioning.

ŠŠ preliminary review of projects that have been certified under the provincial environmental assessment process.

2 The Environmental Assessment Act states that “significant adverse environmental, economic, social, heritage or health effect” are considered, “taking into account practical means of preventing or reducing to an acceptable level any potential effects of the project,” whereas EAO guidance material uses the language “avoid or mitigate potential significant adverse environmental, economic, health, heritage and social effects.” In consultation with the EAO, we chose the latter wording for our audit objectives. The latter is more consistent with international standards for environmental assessments.

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects D eta i led R e p ort

The focus of our audit was the EAO, but we did consider the role and Key Findings and actions of the Ministry of Environment and other natural resource ministries. This audit examined the post-certification part of the Recommendations environmental assessment process. We did not evaluate that portion of the process leading up to the approval of a project. Oversight of certified projects If a proponent’s project is approved as a result of the environmental We carried out our audit between October 2010 and April 2011 and assessment process, the proponent has a legal obligation to comply reviewed a sample of projects certified between 1995 and 2010. We with conditions and commitments set out in the environmental conducted the audit in accordance with section 11 (8) of the Auditor assessment certificate. These stipulate the EAO’s expectations about General Act and the standards for assurance engagements established how the proponent is to avoid or mitigate potential significant adverse by the Canadian Institute of Chartered Accountants. effects and address aboriginal rights, including treaty rights. The EAO is responsible for monitoring certified projects throughout their life to Overall Conclusion ensure that proponents comply with the conditions and commitments of their certificate. We concluded the following: To oversee a certified project effectively, we expected the EAO to have: ŠŠ The EAO’s oversight of certified projects is not sufficient to ensure that potential significant adverse effects are avoided or mitigated. ŠŠ set certificate conditions and commitments that are measurable Specifically, the EAO is not ensuring that: and enforceable;

•• certificate commitments are measureable and enforceable; ŠŠ assigned clear responsibilities for each aspect of oversight; and

•• monitoring responsibilities are clearly defined; and ŠŠ implemented a comprehensive compliance and enforcement program – one that involves periodically checking whether •• compliance and enforcement actions are effective. certificate conditions and commitments are being met by project proponents and taking enforcement action when necessary. ŠŠ The EAO is not evaluating the effectiveness of environmental assessment mitigation measures to ensure that projects are We concluded that the EAO’s oversight of certified projects is not achieving the desired outcomes. sufficient to ensure that potential significant adverse effects are avoided or mitigated. ŠŠ The EAO is not making appropriate monitoring, compliance and outcome information available to the public to ensure accountability.

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects D eta i led R e p ort

Measureable and enforceable 1. There is an absence of provincial legislation or policy concerning certificate language options for mitigation, including offsetting of environmental impacts resulting from major projects. This often leads to disagreement We selected a sample of certificates approved between 1995 and 2010 between proponents and ministry staff during the development of and reviewed the wording of their conditions and commitments. environmental mitigation measures. We found that, after 2002, conditions were written in a measureable and enforceable manner. Commitments, however, were not always For example, Ministry of Forests, Lands and Natural Resource expressed in a way to ensure measurability and enforceability. Operations ecosystem program staff may strive to include commitments for environmental mitigation. These include We looked for the use of measureable and enforceable language, for monitoring the success of mitigation measures, restoring ecosystems example the use of “must” instead of “will” or “may.” We also looked or applying in-lieu fees for environmental resources that will be for clear: temporarily or permanently lost because of a project. However, proponents may be reluctant to include these commitments because ŠŠ references to timing of actions; there is no provincial law requiring, or policy guiding, these actions or offsets. This situation generates disparate practices among ŠŠ references to specific locations of actions; and provincial decision-makers, as well as uncertainty and frustration for the EAO, natural resource ministries and proponents. Š Š stipulation of which parties are accountable for implementing commitments and ensuring compliance. The Ministry of Environment has recognized this issue and is developing a provincial environmental mitigation policy. The EAO We found that numerous commitments contain vague phrasing that has provided input throughout this process. may be difficult to implement, measure and enforce, for example: 2. Some commitments set expectations for proponents that will Š Š “The proponent will maintain a high level of integrity with regard subsequently be considered separately and permitted by another to environmental communications and reporting …” government agency. It is important that these commitments are written in a manner that is considerate of the permitting process. Š Š “The proponent has agreed to explore daycare options for local For example, one commitment in a certificate reads: employees.” “The Land Tenure for the … access roads will include an initial Š Š “Vegetation clearing will be minimized and clearing in old 5-year License of Occupation authorized by Integrated Land growth areas will be avoided wherever possible and kept to a 15m Management Bureau to cover the construction period and will be maximum right-of-way width as much as possible.” issued contingent upon approval of an Access Safety Management Plan. The license will make provision for a long term (life of ŠŠ “The proponent will continue to work with existing placer tenure project) secure tenure to be issued to the Proponent for its use of holders to make best efforts to secure the fish compensation the road during the operations phase …” development.”

We also were made aware of two issues that may lead to commitments that are difficult to implement, measure and enforce.

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects D eta i led R e p ort

In this case, the permitting agency was not prepared to reiterate The situation is further complicated because the various agencies the commitment verbatim. Instead, the agency worded the permit involved use different methods and systems to track certificate according to conditions it deemed appropriate, as it was entitled to do. commitments and conditions. None of these systems are integrated. This led to uncertainty for the proponent because the commitment created an expectation that it had resolved the proponent’s rights RECOMMENDATION 3: We recommend that the and obligations, only for these to change when the permitting agency EAO clarify the post-certification monitoring responsibilities considered the issue. and compliance mechanisms for each commitment.

The EAO has recently developed preliminary internal and external Compliance and enforcement guidance documents to assist staff and proponents in developing measureable and enforceable commitments. It is too early to tell if the We found that the EAO is not adequately fulfilling its compliance guidance will be effective in addressing the issues identified above. and enforcement responsibilities for certified projects. Its activities are reactive rather than proactive, and they do not constitute a RECOMMENDATION 1: We recommend that the comprehensive compliance and enforcement program to ensure that EAO ensure commitments are clearly written in a measureable all certificate conditions and commitments are met. and enforceable manner. The EAO acquires information about compliance and enforcement RECOMMENDATION 2: We recommend that the with certificate conditions from the following sources: EAO continue to work with the Ministry of Environment to finalize a policy framework that will provide provincial guidance Oversight of proponent self-monitoring: The majority of on environmental mitigation. environmental assessment certificates contain a condition requiring proponents to submit periodic compliance reports. Monitoring responsibilities This is referred to as “proponent self-monitoring.” Staff at the EAO review the self-monitoring report when it is submitted. Agency roles and responsibilities for monitoring proponents’ We noted that compliance reports are not always submitted. compliance with their environmental assessment certificates must If the report appears to be complete, it is accepted as proof of be clear. compliance. When questions arise, staff contact the proponent by phone or email. While the EAO is responsible for providing oversight of each certified project, monitoring of certain environmental assessment The EAO does not formally track certified project conditions and certificate conditions and commitments is often delegated to other commitments for compliance. agencies. For example, the EAO relies on staff of the Ministry of Forests, Lands and Natural Resource Operations to monitor Complaints monitoring: The EAO occasionally receives ecosystem-related commitments. (See Appendix A for examples of complaints from interested parties about a certified project. It reported environmental monitoring good practices.) In addition, follows up with the proponent, generally by phone or email, to because many commitments are also incorporated into permits, address the issue. they become the monitoring and enforcement responsibility of the agency issuing the permits. (See Appendix B for examples of The EAO does not formally track these complaints. monitoring responsibilities.) Compliance verification activities such as inspections, together with We found that, with the exception of commitments that are tied to well-defined enforcement actions, provide greater assurance that specific permits, agency responsibilities for monitoring compliance proponents will comply with environmental assessment certificates. with environmental assessment certificates are not clear. Most However, the EAO is not significantly active in either of these areas. interviewees reported that they had little if any communication with the EAO on these matters once a certificate had been issued.

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects D eta i led R e p ort

Compliance verification: Both the Environmental Assessment Act (section 33) and the EAO user guide state that the EAO may undertake site inspections when appropriate. From 2000 to 2004, the EAO implemented a pilot program to verify certificate compliance of three projects. The EAO carried out these reviews using a mix of EAO staff, ministry staff and consultants. While the projects were found to be mostly in compliance, issues of non- compliance were also identified and rectified where possible.

Despite these positive results, the pilot did not lead to a full-time program, and formal site inspections are not carried out regularly by the EAO.

Enforcement: In keeping with Part 5 of the Environmental Assessment Act, the EAO has developed a progressive enforcement approach. Where it appears that a proponent may be in non- Effectiveness of environmental compliance with an environmental assessment certificate or assessments with the Act, EAO staff have several options they may apply in progression, for example: education, formal letters, penalties and Since 1995, 115 projects have received environmental assessment ultimately certificate suspension or cancellation. certificates (see Appendix C for a map of certified projects).

To date, however, the EAO has not deemed penalties, certificate We concluded, however, that even if these projects have complied suspension or cancellation necessary. with their conditions and commitments, the EAO has no assurance that the intended environmental outcomes as well as the benefits of In 2010, the EAO joined the provincial interagency compliance and the projects are being achieved. To obtain this assurance, effectiveness enforcement committee, which was formed to support the natural evaluations need to be completed. As the EAO does not conduct resource and environment agencies in their efforts to co-ordinate effectiveness evaluations on individual projects, it cannot say with compliance and enforcement activities. Because of subsequent certainty whether: reorganizations of the natural resource ministries, the committee has not had many meetings over the last year, so the EAO’s role in the ŠŠ the environmental assessment process is effective at ensuring provincial compliance and enforcement coordination framework that certified projects do in fact avoid or mitigate the potential remains unclear. significant adverse environmental, economic, social, heritage and health effects (both individually and cumulatively); or RECOMMENDATION 4: We recommend that the EAO develop and implement a comprehensive compliance and enforcement ŠŠ the anticipated benefits of each project are being achieved. program that includes an integrated information management system to monitor project progress and ensure compliance.

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects D eta i led R e p ort

Exhibit 4: Effective environmental assessment: an iterative process

Detailed assessment of signi cant identi cation of mitigation needs

2. Pre-feasibility 3. Feasibility Detailed design of Site selection, environmental screening, mitigation measures initial assessment, scoping of signi cant issues, baseline monitoring

1. Project concept 4. Design and engineering

Changes in project management, Implementation of communication with stakeholders/ mitigation measures and reporting mechanisms, lessons environmental strategy learned for future projects 7. Evaluation 5. Implementation

Post-certi cate monitoring Evaluation of outcomes 6. Monitoring to assess compliance with from mitigation measures mitigation measures

Source: Adapted by the Office of the Auditor General

Information generated through evaluations can contribute to the Accountability information improvement of future environmental assessment practice because the outcome of each stage is fed back into the system. Evaluation We found that neither the accountability information reported by the helps to ensure that environmental assessment operates as an iterative EAO online nor that reported through the Ministry of Environment’s process of continuous improvement (see Exhibit 4). annual service plan report is providing adequate information on certified projects. Although the EAO is not carrying out effectiveness evaluations, they are aware of the importance of monitoring and improving overall The EAO maintains an online Project Information Centre (e-PIC) to effectiveness. As we were carrying out our audit, the EAO created provide public access to project information. The information includes and filled a new position: Director of Strategy and Quality Assurance. the proponents’ applications for environmental assessment certificates Responsibilities for the position include ensuring the effectiveness of the and project monitoring information. The latter is primarily self- environmental assessment process, and monitoring the results of the EAO monitoring information for proponents and is not consistent or timely. and the assessment process with an aim to improving overall effectiveness. Because the EAO does not carry out comprehensive compliance and RECOMMENDATION 5: We recommend that the enforcement activities or evaluations, it does not have information of EAO conduct post-certificate evaluations to determine whether this nature available. The Ministry of Environment and other natural environmental assessments are avoiding or mitigating the resource ministries do conduct compliance and enforcement activities potentially significant adverse effects of certified projects. related to environmental assessment projects, but do not regularly publish detailed information on their findings.

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects L oo k i n g A head

The EAO also accounts for its performance in the Ministry of Environment’s annual service plan report. In the 2009/10 report, one of the goals reported on is “the environmental assessment process is effective and efficient.” However, we found that the measures selected do not address effectiveness in the context of whether expected environmental outcomes have been realized. Instead, the measures focus on process issues.

RECOMMENDATION 6: We recommend that the EAO provide appropriate accountability information for projects certified through the environmental assessment proces.

L oo k i n g A head

We will follow-up on the status of the implementation of these recommendations in our October 2012 follow-up report.

We also noted that government is now establishing an interagency compliance and enforcement group for the environment and natural resource sectors. This key function will be an important means of providing the Legislative Assembly and public with assurance that proponents of all projects – those included in the environmental assessment process and those excluded from it – are meeting their obligations. We will consider the appropriate time to carry out an examination of how well that group is functioning.

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects A p p e n d i ces

Appendix A: Ex amples of reported environmental monitoring good practices Environmental monitoring is fundamental to each environmental Multi-stakeholder committees to facilitate assessment project, and describes the collection of activity and communication and environmental environmental data both before project construction and after activity stewardship implementation. Various monitoring forms (including baseline, effects/impacts and compliance) can enable the auditing of mitigation Cooperative initiatives provide an opportunity to accommodate measures, refinement of assessment methods and use of adaptive the interests of those who may be affected by environmental management to improve project outcomes. assessment projects.

While we were carrying out our audit, interviewees identified several For example, the Ruby Creek Project Management Committee was environmental assessment projects that they believed incorporated created for the proposed molybdenum mine in northwestern British good practice principles into their monitoring activities. Adopting Columbia to provide joint oversight and collaborative decision- good practices used by others is not a guarantee for success. Each making in post-certification regulatory and environmental matters. situation requires careful consideration of which of these types of If the project had gone forward, the committee would have been practices, if any, will work best in a particular circumstance. We comprised of representatives from the Taku River Tlingit First Nation summarize some examples below. government and various provincial and federal government agencies. The proposed terms of reference indicated the committee would be Independent monitors responsible for ensuring the design and implementation of follow- up programs to provide information on the residual environmental Hiring an environmental monitor who is independent of the effects and effectiveness of mitigation resulting from the project. proponent to carry out post-certification monitoring is sometimes included as an environmental assessment certificate requirement. Wildlife monitoring programs These individuals offer valuable, on-site expertise throughout the critical construction phase. Environmental assessment certificates usually stipulate that proponents must develop wildlife monitoring programs to address For instance, independent monitors were negotiated for the South project impacts to individual species. The Ruby Creek Project Fraser Perimeter Road and Port Mann Highway 1 projects. While initiatives were cited during our audit by Ministry of Forest, Lands monitors are usually consultants, the environmental issues associated and Natural Resource Operations staff as a model for future wildlife with these two projects were determined to warrant the use of plans. Created by key stakeholders, the individualized programs were Ministry of Environment staff, who were temporarily assigned to the designed for five wildlife Valued Ecosystem Component species in projects. These individuals monitored, evaluated and reported on the the Ruby Creek watershed: woodland caribou, Stone’s sheep, moose, effectiveness of mitigation measures with respect to the terms and grizzly bears and hoary marmots. conditions of the environmental assessment and other regulatory permits and authorizations. In each case, the monitor was responsible The Ruby Creek Wildlife Working Group compiled information for making on-site decisions and taking action if necessary to avoid or from a range of sources to assess potential residual project impacts respond to potential environmental effects. remaining after all proposed mitigation measures are considered. Monitoring will be based on specific surveys designed to assess the For other environmental assessment projects, the monitors have effectiveness of mitigation measures proposed to offset the potential been private consultants (e.g. Fishtrap Island Collector Well in residual impacts. The monitoring regime represents best efforts Prince George). to evaluate direct and indirect project impacts based on current knowledge, and provides a basis for ongoing adaptive management during the project life. Frequent evaluation and reporting are essential to assess the effectiveness of the individual mitigation measures and of the overall program.

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects A p p e n d i ces

Currently, these types of species-specific monitoring programs are created after the environmental assessment certificate has been granted. Ministry staff would prefer that monitoring plans be created during the environmental assessment application process and incorporated into the certificate as a means of helping ensure compliance and enforcement.

Pre-approved funding for monitoring plans

Pre-approved funding arrangements are becoming increasingly prevalent in environmental assessment certificates.

For example, the Greenville-to-Kincolith Road project was expected to have significant direct and indirect residual impacts on grizzly bears. Approaches to mitigate impacts resulted in an extensive program of bear–human conflict avoidance, education, enforcement and a monitoring program from 2000 to 2009. The plan, estimated to cost over $500,000, was jointly funded by the proponent (Ministry of Transportation) and the federal Department of Indian Affairs and Northern Development. Interviewees reported that this plan was successfully implemented because the budget (including resources and personnel) was secured before the environmental assessment certificate was approved.

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects A p p e n d i ces

Appendix B: Ex amples of monitoring responsibilities and compliance mechanisms for different types of certificate commitments

Type of commitment Agency responsible for compliance Compliance mechanism

Covered by permits from other ministries EAO responsible to provide oversight of ŠŠ Environmental Assessment Certificate ŠŠ Emissions to the air transition from commitment to permit Š Š Discharge of effluent Provincial agencies ŠŠ Mines Act Permit Š Š Storage and handling of industrial waste ŠŠ Ministry of Environment ŠŠ Discharge Permit Š Š Mine plans ŠŠ Ministry of Forests, Lands and Natural ŠŠ Water Licence Š Š Reclamation plans Resource Operations ŠŠ Land Tenure Š Š Water licensing ŠŠ Ministry of Energy and Mines ŠŠ Road Use Permit ŠŠ Acquisition of rights-of-way ŠŠ Avoidance/mitigation Federal agencies ŠŠ Disturbances on Crown land ŠŠ Fisheries Act Authorization ŠŠ Fisheries and Oceans Canada ŠŠ Handling/transporting dangerous goods ŠŠ Species at Risk Authorization ŠŠ Environment Canada

Social/Economic EAO ŠŠ Environmental Assessment Certificate ŠŠ Hiring and employment preferences for local workers ŠŠ Plans related to the following: •• Accidents and malfunctions •• Emergency response •• Traffic management •• Nuisance (noise, light) control •• Vehicle inspection and maintenance

Ecosystem and Groundwater EAO ŠŠ Environmental Assessment Certificate ŠŠ Wildlife management Provincial agencies Š Š ŠŠ Ecosystem/habitat mitigation and Š Ministry of Forests, Lands and Natural Š Authorizations and permits, such as Resource Operations Land Licences and Mines Act Permits, compensation ŠŠ Health Authorities may include some provisions pertaining •• Riparian zones to ecosystems and groundwater •• Wetlands

Heritage/Archaeological EAO ŠŠ Environmental Assessment Certificate ŠŠ Procedures to avoid and protect ŠŠ Heritage Conservation Act archaeological sites

First Nations Consultation and EAO ŠŠ Environmental Assessment Certificate Accommodation ŠŠ Procedures to address traditional land use ŠŠ Time constraints on public fishing activities in a project area ŠŠ Hiring and employment opportunities

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects A p p e n d i ces

Appendix C: Map of 115 projects that have received environmental assessment certificates in British Columbia³

3 These projects are in various stages – permitting, construction, operation and decommissioning.

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Auditor General of British Columbia | 2011 Report 4 An Audit of the Environmental Assessment Office’sO versight of Certified Projects 2011

Report of the Commissioner of the Environment and Sustainable Development

DECEMBER Chapter 1 Transportation of Dangerous Products

Office of the Auditor General of Canada The December 2011 Report of the Commissioner of the Environment and Sustainable Development comprises The Commissioner’s Perspective, Main Points—Chapters 1 to 5, an appendix, and six chapters. The main table of contents for the Report is found at the end of this publication.

The Report is available on our website at www.oag-bvg.gc.ca.

For copies of the Report or other Office of the Auditor General publications, contact

Office of the Auditor General of Canada 240 Sparks Street, Stop 1047D Ottawa, Ontario K1A 0G6

Telephone: 613-952-0213, ext. 5000, or 1-888-761-5953 Fax: 613-943-5485 Hearing impaired only TTY: 613-954-8042 Email: [email protected]

Ce document est également publié en français.

© Her Majesty the Queen in Right of Canada, represented by the Minister of Public Works and Government Services, 2011.

Cat. No. FA1-2/2011-2-1E-PDF ISBN 978-1-100-19537-7 ISSN 1495-0782 Chapter

Transportation of Dangerous Products Performance audit reports This report presents the results of a performance audit conducted by the Office of the Auditor General of Canada under the authority of the Auditor General Act. A performance audit is an independent, objective, and systematic assessment of how well government is managing its activities, responsibilities, and resources. Audit topics are selected based on their significance. While the Office may comment on policy implementation in a performance audit, it does not comment on the merits of a policy. Performance audits are planned, performed, and reported in accordance with professional auditing standards and Office policies. They are conducted by qualified auditors who

• establish audit objectives and criteria for the assessment of performance; • gather the evidence necessary to assess performance against the criteria; • report both positive and negative findings; • conclude against the established audit objectives; and • make recommendations for improvement when there are significant differences between criteria and assessed performance. Performance audits contribute to a public service that is ethical and effective and a government that is accountable to Parliament and Canadians. Table of Contents

Main Points 1

Introduction 5

Roles and responsibilities of organizations in the transport of dangerous products 6 Focus of the audit 7

Observations and Recommendations 7

Transport Canada 7

There is no national risk-based compliance inspection plan 9 There is a lack of follow-up by Transport Canada on identified deficiencies 11 Transport Canada does not know the extent to which organizations transporting dangerous goods are complying with regulations 13 Transport Canada does not conduct an adequate, timely review when approving emergency response assistance plans 14 Management has not acted on long-standing concerns regarding inspection and emergency plan review practices 16

National Energy Board 18

There is a lack of follow-up by the Board on identified deficiencies 21 Oversight of emergency procedures manuals is deficient 24 The Board has designed a sound risk-based monitoring approach, but improvements are needed in its implementation 26

Conclusion 29

Transport Canada 29

National Energy Board 30

About the Audit 31

Appendix

List of recommendations 35

Report of the Commissioner of the Environment and Sustainable Development—December 2011 Chapter 1 iii

Transportation of Dangerous Products

Main Points

What we examined Dangerous products, as defined by federal legislation, play a key part in Canada’s economy, whether exported directly, like gas and oil, or used by industry—for example, natural gas in the plastics industry and explosives in the mining and construction industries. Shipments of dangerous products transported throughout Canada each year by road, rail, air, and ship number in the tens of millions and are subject to the Transportation of Dangerous Goods Act, 1992 and its regulations administered by Transport Canada. The crude oil, petroleum products, natural gas liquids, and natural gas that move through approximately 71,000 kilometres of Canada’s interprovincial and international oil and gas pipelines are subject to the National Energy Board Act and its regulations administered by the National Energy Board. Both Transport Canada and the National Energy Board aim to promote the prevention of spills and releases of dangerous products and preparedness for incidents and emergencies that may arise. They do this by monitoring and enforcing compliance with legislation and standards and by taking actions to ensure that regulated organizations have appropriate and effective mechanisms in place to respond if an emergency does occur. In 2011–12, regulatory oversight activities accounted for about 63 staff and $7.3 million at the National Energy Board and 74 staff and $6.7 million at Transport Canada’s Transportation of Dangerous Goods Directorate. We examined how Transport Canada and the National Energy Board determine whether regulated organizations have complied with established legislation and standards in transporting dangerous products and whether they have prepared emergency response plans. We did not look at emergency response and recovery activities that would take place following an incident. While this chapter contains references to various private sector companies, it must be noted that our conclusions about management practices and actions refer only to those of Transport Canada and the National Energy Board. We did not audit the records of the private

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sector organizations. Consequently, our conclusions cannot and do not pertain to any practices that regulated organizations followed. Audit work for this chapter was completed on 30 June 2011.

Why it’s important Dangerous products are a necessary element in the daily lives of Canadians. They range from gasoline used in motor vehicles to substances such as lead and mercury used in manufacturing electronics products. Industries that manufacture and use dangerous products provide jobs to Canadians. While major spills and releases involving dangerous products are rare, they can have significant consequences for Canadians’ health, the economy, and the natural environment. The shipment of dangerous products must be managed well to reduce the risk and impact of spills and releases.

What we found • Transport Canada lacks a consistent approach to planning and implementing compliance activities. As a consequence, it cannot ensure that sites are inspected according to the highest risk.

• Transport Canada has not ensured that corrective action has been taken on instances of non-compliance. In the sample of completed inspection files we reviewed, 53 percent identified instances of non- compliance and, of those files, 73 percent contained incomplete or no evidence that corrective action had been taken.

• Transport Canada has given only temporary, interim approval for nearly half of the emergency response assistance plans put in place by regulated organizations. As a consequence, many of the most dangerous products regulated under the Act have been shipped for years without the Department having completed a detailed verification of plans for an immediate emergency response.

• Many of the issues our audit identified in Transport Canada are not new; an internal audit identified these same concerns over five years ago. The Department has yet to correct some of the key weaknesses in its regulatory oversight practices.

• While the National Energy Board has identified gaps and deficiencies through its verification of compliance for the companies it regulates, there is little indication that it has followed up to ensure that these deficiencies have been corrected. In our audit sample of completed compliance verification activities, 64 percent of the files identified gaps and deficiencies and, of those files, only 7 percent contained evidence that the Board had followed up to determine if corrective action had been taken.

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• The National Energy Board has yet to review the emergency procedures manuals of 39 percent of regulated companies. As a consequence, it has not determined whether those manuals meet its established expectations. In our sample of manuals that it had reviewed, the Board identified deficiencies in all 30 cases but communicated those to only 3 of the regulated companies, and in only 1 case did it check to ensure that the noted deficiencies had been corrected. The entities have responded. The entities agree with all of our recommendations. Their detailed responses follow the recommendations throughout the chapter.

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Introduction

Dangerous products—Chemicals such as 1.1 Dangerous products play a key part in Canada’s economy. sulphuric acid, gasoline, and oil, that when Products classified by the federal government as dangerous range from spilled or released have the potential to negatively impact the health of Canadians products like gas and oil that are consumed or exported to products or the environment. The Transportation of used by industry, such as natural gas in the plastics industry, explosives Dangerous Goods Act, 1992 refers to these in the mining and construction industries, and sulphuric acid and products as “dangerous goods.” lithium in the manufacture of batteries. According to Transport Canada, there are tens of millions of dangerous product shipments each year. By tonnage, these products are transported by road (45 percent), rail (39 percent), ship (15 percent), and air (less than 1 percent). In 2008, the value of chemical product shipments was approximately $47 billion. In 2009, the value of crude oil, petroleum products, and natural gas shipped by pipeline was approximately $75 billion.

1.2 The safe use and transportation of dangerous products is important to Canadian society. Industries that manufacture, ship, and use dangerous products provide jobs to Canadians. Dangerous products are a necessary element in the daily lives of Canadians. Their use ranges from gasoline to power motor vehicles to substances such as lead and mercury used in the manufacture of electronic products.

1.3 If the movement of dangerous products is not handled correctly

In February 2011, a gas pipeline exploded or accidents occur, it can result in injury or death. For example, acids near Beardmore in Northern Ontario. coming into contact with skin can cause severe burns, and chlorine gas Photo: Kimberley Brunet if inhaled can cause death. The transport of dangerous products can also adversely affect Canada’s economy and the environment. For example, spills and releases of products such as acids and oils can result in the death of wildlife and the contamination of ecosystems.

1.4 Incidents can occur via any mode of transport. Recent incidents resulting in the release of dangerous products include • March 2007—A train derailment spilled sulphuric acid into the Blanche River just north of Englehart in Northern Ontario.

On 2 February 2001, a train derailment • May 2011—A pipeline spill of 238,500 litres of crude oil occurred in Red Deer, Alberta, caused the release of about 50 kilometres south of Wrigley in the Northwest Territories. nearly 72 tonnes of anhydrous ammonia (used in fertilizers and refrigeration, among • February 2011—A gas pipeline explosion near Beardmore in other things). One person died and 34 people were hospitalized after exposure to Northern Ontario led to the voluntary evacuation of homes. the vapours. Anhydrous ammonia is toxic to fish and wildlife, and disperses easily • March 2011—A train derailment near Port Hope in Southern in water. Ontario resulted in the evacuation of homes and businesses and a Photo: Transportation Safety Board of Canada fire involving a number of dangerous products, including propane, aviation fuel, and sulphuric acid.

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Roles and responsibilities of organizations in the transport of dangerous products

1.5 A variety of organizations have key roles to play in ensuring the safe transportation of dangerous products or in responding to incidents if they occur. The organizations’ responsibilities apply throughout the process of preventing and responding to spills or releases of dangerous products.

• The federal government is responsible for regulating the domestic and international movement of dangerous products by road, rail, air, and ship. It is responsible for regulating the movement of dangerous products via pipeline across provincial and territorial borders and across international borders. It is also responsible, along with other organizations, for responding to spills or releases of dangerous products during their transport. The two federal organizations most involved are Transport Canada, which is responsible for overseeing compliance with legislation for the transport of dangerous goods via road, rail, air, and ship, and the National Energy Board, which regulates the transport of oil and gas and other petroleum products via international and interprovincial pipelines. • Companies and other organizations transporting dangerous products have an obligation to ensure they comply with legislation, regulations, and standards. • First responders such as fire and police are among the first ones on the scene of a spill or release and play a key role in minimizing the harmful effects. • Provincial and territorial governments play a role in ensuring that federal regulations for the transport of dangerous products are implemented. They have also established their own laws to regulate the transport of dangerous products by road within each province and territory, and by pipeline, where applicable.

1.6 There are four key steps that are followed in the prevention of and response to a spill or release of a dangerous product:

• Prevention and mitigation measures aim either to prevent an incident from occurring or to mitigate the effects of a potential incident. Federal government measures include developing regulations and standards (such as emergency preparedness and response standards) and ensuring that organizations comply with them by, for example, conducting inspections and audits.

• Preparedness involves regulated organizations preparing an emergency response plan to ensure that a suitable response capability exists to minimize the impacts on human health and the environment should an incident or emergency occur.

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• Response to an incident or emergency when it occurs may involve regulated organizations and first responders activating and using the emergency response plan to address the incident.

• Recovery involves restoring the area affected to normal conditions.

Focus of the audit

1.7 Our audit focused on whether Transport Canada and the National Energy Board have designed and implemented a risk-based approach to determine whether regulated organizations transport dangerous products in accordance with established legislation and standards. We also looked to see whether Transport Canada and the National Energy Board had designed and implemented practices and procedures to monitor whether regulated organizations had prepared emergency response plans according to established legislation and standards.

1.8 Our audit focused on the prevention of spills and releases through inspections, audits, and other compliance verification activities conducted by the regulators. It also focused on Transport Canada’s and the National Energy Board’s review of emergency response plans submitted by regulated organizations to direct their responses in the event of a spill or release.

1.9 Our audit covered the period of January 2007 to June 2011. Sampled files were drawn from within this period to ensure sufficient coverage over multiple years. In certain cases, such as emergency response assistance plans and emergency procedures manuals, documentation outside of this time period was used to supplement the work undertaken.

1.10 More details about the audit objectives, scope, approach, and criteria are in About the Audit at the end of this chapter.

Observations and Recommendations

Transport Canada 1.11 Transport Canada is responsible for the regulatory oversight of domestic and international shipping of dangerous goods via road, rail, air, and marine transportation. The Department’s mandate is set out in the Transportation of Dangerous Goods Act, 1992 and its regulations. These responsibilities include

• developing and updating regulations;

• monitoring compliance with and enforcing the Act and regulations;

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• reviewing and approving emergency response assistance plans; • developing means of containment standards (the container, packaging, or any part of the means of transport that can be used to contain a dangerous good); • providing and developing inspector training (national, provincial, and territorial); • providing a 24-hour-a-day bilingual emergency advisory information service (Exhibit 1.1); and • attending and compiling data on accidents or incidents involving dangerous goods (Exhibit 1.2).

Exhibit 1.1 The Canadian Transport Emergency Centre

Transport Canada’s Canadian Transport Emergency Centre (CANUTEC) provides expert information on a variety of subjects, including • the chemical, physical, and toxicological properties of dangerous goods, as well as incompatibilities among dangerous goods; • health hazards and first aid; • hazards from fires, explosions, spills, or leaks; • remedial actions for the protection of life, property, and the environment; • safe distances for evacuations; and • personal protective clothing and decontamination. In 2009, the Centre received 23,670 calls, of which 940 were in response to an emergency. The Centre sends reports to Transport Canada inspectors to help them improve their technical knowledge about emergencies.

Exhibit 1.2 Reportable accidents from 2007–10 involving dangerous goods by mode and phase of transport

Marine: 0 Air: 13 Rail: 27 In transit phase

Road: 416

Not in transit phase*: 1070

* Not in transit accidents are those that take place at facilities where the goods are prepared for transport (handled prior to loading or unloading), unloaded, or stored in the course of transport. In transit accidents include those that occur during transport.

Note: Accidents involving dangerous goods are “reportable” when the quantity of dangerous goods released exceeds the amount listed in the table contained in Part 8 of the Transportation of Dangerous Goods Regulations. Source: Adapted from Transport Canada data.

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1.12 Within Transport Canada, the Transportation of Dangerous Goods (TDG) Directorate is responsible for administering the Transportation of Dangerous Goods Act, 1992. The TDG Directorate is responsible for promoting and enforcing compliance with the Act and regulations through a national awareness, inspection, investigation, and enforcement program and the coordination of activities by TDG inspectors. The Directorate assesses and approves emergency response assistance plans prepared by those importing, offering for transport, handling, or transporting dangerous goods in a quantity or concentration that is specified by regulations. The national program is delivered through headquarters in Ottawa and in five regional offices across Canada: Atlantic, Quebec, Ontario, Prairie and Northern, and Pacific. According to Transport Canada, it conducts more than Site—An actual building or premises where 2,000 compliance inspections a year of sites involved in the transport dangerous goods to transport are being manufactured, prepared for shipping, shipped of dangerous goods. According to the TDG Directorate, it has a staff from, detained (in transit), or received of 74 and a budget of $6.7 million. (destination). It represents a geographical location as opposed to a vehicle (train, truck, 1.13 Our audit examined whether the Department had ship, or plane). An organization may have more than one site. • developed a risk-based approach to conduct its monitoring of regulated organizations, • carried out its monitoring program to determine if regulated organizations are in compliance with the Act and regulations, • developed performance measures that allow it to provide assurance to Canadians that regulated organizations are in compliance with the Act and regulations, and • reviewed and approved emergency response assistance plans.

1.14 Our recommendation to Transport Canada concerning compliance inspections and emergency response assistance plans appears at the end of this section, in paragraph 1.45.

There is no national risk-based compliance inspection plan

1.15 We examined the management processes and practices used by Transport Canada to establish its monitoring priorities for the year and to direct the work of its inspectors. This included policies, procedures, and manuals as well as the plans prepared by the Department’s five regional offices.

1.16 According to the Treasury Board’s Framework for the Management of Risk, a risk-based management process focuses efforts on those areas of significant risk. In monitoring compliance with the Act and regulations, a national, risk-based approach to inspection planning is necessary in order to determine the geographic areas,

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transportation modes, or goods that pose the greatest risk, and to ensure that the regulations are applied fairly. Understanding overall risks in terms of their significance and the factors that influence those risks is a critical part of deploying scarce resources to the most significant areas, and establishing goals for the inspection program.

1.17 Some elements of a risk framework are in place. The Transportation of Dangerous Goods (TDG) Directorate has a compliance strategy to guide how inspections should be prioritized based on a ranking attributed to sites. According to this strategy, locations where the dangerous goods first enter the transportation system (such as manufacturers of large quantities of dangerous goods) should be categorized as top priority, and top-priority sites should be inspected regularly. However, this strategy is missing important elements needed to ensure that a coherent risk-based approach is used across Canada. For example, the strategy has not defined how frequently inspections must be done or indicated how to consider other types of risks, such as an organization’s compliance history, in prioritizing inspections.

1.18 We found that Transport Canada does not have a national risk-based process for determining the sites that should be the highest priority for inspection. The regional offices are responsible for preparing compliance inspection plans. However, they use inconsistent processes, and the link between these processes and the sites selected for inspection is not clear. As a consequence, these plans lack details on what is being inspected or why it is being inspected.

1.19 For example, the Atlantic region’s plans include a risk assessment matrix to identify and prioritize issues, such as training, within the regulated community and outline general tasks to address these issues; however, there is no indication of how many inspections will be carried out or which organizations will be inspected during the year. The Pacific region’s plans contain a proposed number of inspections to be conducted by inspectors together with a list of organizations to be inspected; however, the plans do not contain supporting information on how these were selected. In the Prairie and Northern region, no documentation was provided to show that inspection plans have been prepared.

1.20 Information necessary for inspectors to effectively plan or conduct their work is missing or incomplete. Transport Canada does not have a complete picture of the organizations transporting dangerous goods. According to the TDG Directorate, there are about 25,875 active organization sites in its inspection database. However, the Directorate has not analyzed the quality of its inventory of organizations to support its assertion that the highest-risk organizations have been identified and

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are being inspected. Further, the Directorate’s own analysis finds that the database is not current: many of the organizations listed as “active” no longer carry dangerous goods or have closed. While the Directorate has other databases for the subset of organizations that require emergency response assistance plans (ERAPs) and for organizations that have reported incidents involving releases of dangerous goods, it has not evaluated whether these databases contain consistent information. For example, for one company that was closed in 2008, the inspection database shows that the company is inactive, but the ERAP database still shows that the company is active.

1.21 Without a national risk-based planning process and an accurate and reliable inventory of organizations posing the greatest risk in transporting dangerous goods, Transport Canada cannot ensure that sites are inspected according to the highest risk and that its resources are being allocated to areas of greatest concern.

There is a lack of follow-up by Transport Canada on identified deficiencies

A 1.22 We examined the activities that Transport Canada undertakes to monitor whether organizations shipping dangerous goods were in B compliance with the Transportation of Dangerous Goods Act, 1992 and regulations. We looked at the Department’s compliance monitoring and C enforcement activities for the period from 1 April 2008 to 1 April 2010. This included an examination of inspection files as well as the policies,

D procedures, and guidance established by the Department.

1.23 The Act and regulations set out the requirements that must E be followed by organizations in the transport of dangerous goods and give Transport Canada the powers to conduct inspections and monitor compliance. Regulations prescribe key aspects such as labelling requirements, how substances are transported, and Examples of types of placards used transport prohibitions. when dangerous goods are transported. Numbers in placards indicate class of dangerous goods, such as gases. 1.24 Inspection and compliance monitoring is essential for the The placards above are presented for Department to know whether regulated organizations are complying illustrative purposes only and are not exact with the Act and regulations and whether the interests of Canadians representations. Regulations prescribe the particular design, colour, and text for each are adequately safeguarded. For example, an inspector can verify that required placard. the shipper of dangerous goods is using warning placards that indicate A. Flammable gases such as propane the type of substance being transported. These warning placards B. Toxic gases such as chlorine C. Explosives such as dynamite provide critical information for first responders at the scene of an D. Radioactive materials such as uranium accident—flammable goods like gasoline require a different response E. Infectious substances such as viruses than corrosive goods like sulphuric acid. General compliance Source: Adapted from Transport Canada inspections can also include verifying that employees are trained to

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handle dangerous goods, or that adequate means of containment are used for the goods transported.

1.25 We examined a random selection of 49 compliance inspection files carried out during the 2008–09 and 2009–10 fiscal years. We looked at the nature and extent of work carried out in conducting these inspections as well as other supporting files.

Dangerous goods can be transported by ship. 1.26 Supporting documentation is critical to demonstrate that Photo: Rodolfo Arpia/Shutterstock.com inspectors have properly discharged their duties to verify organizations’ compliance with regulations for the transport of dangerous goods. Transport Canada’s Inspectors’ Manual requires that good documentation be kept. We found that about 70 percent of the files we reviewed did not indicate the scope of the inspection, such as which regulatory requirements were assessed during the inspection. Without clearly laying out the inspection scope, anyone reviewing or following up on the inspection would have no way of knowing the requirements that had been evaluated. Dangerous goods can be transported by air. Photo: vm/Shutterstock.com 1.27 We also found that of the files we reviewed, 53 percent noted instances of non-compliance with the Act and regulations. Examples of violations included missing information on shipping documents, missing training certificates for handling dangerous goods, missing and inadequate labelling, and problems with containers used to transport dangerous goods. In these files that identified instances of non- compliance, we noted that for the majority (73 percent) there was no, or incomplete, evidence that Transport Canada had determined whether the organizations had taken corrective actions. For example, we noted that the records for one company contained nine inspection reports over the last 11.5 years. All nine reports noted deficiencies; some of them repeated violations. Only three of the nine reports contained evidence that the organization had taken corrective actions. Violations included containers not meeting standards and a lack of proper warning placards, meaning there was an increased risk of a release of a dangerous good or risk that responders would not have the information needed to ensure the most appropriate response in case of an accident. A sound management practice should include follow-up with the organization to ensure corrective actions have been taken.

1.28 One factor contributing to these deficiencies is a lack of guidance for inspectors. We examined the procedures and guidance materials provided to inspectors. Transport Canada does not have clear procedures and guidelines on how to document the scope of the inspection or what supporting evidence should be collected on items verified during an inspection. When violations are identified, there are

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no clear procedures and guidelines on how to differentiate between major and minor violations and on how follow-up activities should be conducted to ensure that corrective actions have been taken. For example, in one of the files we examined, the inspector issued a $630 fine to a company for missing warning placards. The company requested key pieces of evidence supporting the allegation, such as photos of the labelling infractions. However, the file contained little Dangerous goods can be transported by train. supporting evidence. The fine was later withdrawn. Photo: Mayskyphoto/Shutterstock.com 1.29 Procedures and guidance materials are critical to ensure that inspectors have sufficient information to carry out their inspections and to ensure that inspections are carried out fairly and consistently across Canada. The procedures and guidance are also critical to ensure that sufficient evidence is collected and documented so government can prosecute organizations that do not comply.

Transport Canada does not know the extent to which organizations transporting dangerous goods are complying with regulations Dangerous goods can be transported by truck. Photo: Samuel Acosta/Shutterstock.com 1.30 We examined whether Transport Canada developed performance measures to determine rates of regulatory compliance in order to be able to report to senior management on departmental performance in administering the Transportation of Dangerous Goods Act, 1992 and its regulations.

1.31 The Department is making efforts to estimate the extent of compliance by conducting inspections based on a random selection of organizations’ sites. Over a six-year period (2005 to 2010), these random inspections found that an average of 40 percent of the inspected sites were not compliant with the Act or regulations. However, Transport Canada has stated that it requires additional work to improve the method it uses to measure compliance. We noted that the Department has for seven years been developing an indicator to measure compliance.

1.32 Without a means of measuring performance, it is impossible to determine the extent to which organizations are following the rules for the safe transport of dangerous goods and whether compliance is improving or worsening from year to year.

1.33 We also noted that although the Transportation of Dangerous Goods (TDG) Directorate has overall responsibility for administering the Transportation of Dangerous Goods Act, 1992, responsibility for monitoring compliance under the Act and regulations is shared with the provinces and territories, other federal departments, and other directorates within Transport Canada. The TDG Directorate conducts compliance activities, including inspections at the sites of

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organizations that manufacture, ship, import, handle, and offer dangerous goods for transport, including rail companies. Two other groups at Transport Canada, the Civil Aviation Directorate and the Marine Safety Directorate, conduct inspections for shipments made by air and marine transport, respectively.

1.34 The TDG Directorate does not collect or evaluate information on compliance monitoring and enforcement activities carried out by the civil aviation and marine safety directorates or by provinces and territories, and other federal departments. As well, the TDG Directorate has no comprehensive picture of the nature and extent of monitoring and enforcement being conducted for air, road, and marine transport. However, Transport Canada has indicated that these directorates, along with provinces and territories, present their findings through national stakeholder meetings twice a year. We further noted that the memoranda of agreement that govern the division of responsibilities within Transport Canada date back to 1983 and refer to federal organizations that no longer exist and do not specify performance reporting requirements.

Transport Canada does not conduct an adequate, timely review when approving emergency response assistance plans

1.35 Emergency response assistance plans (ERAPs) are required for the most dangerous goods regulated under the Transportation of Dangerous Goods Act, 1992 and its regulations. The purpose of such plans is to ensure that the equipment and expertise are available to immediately respond to an emergency.

1.36 The Act requires Transport Canada to review and approve ERAPs. Under the Act, organizations that transport dangerous goods requiring an ERAP must prepare a plan and must have approval from Transport Canada before they can import, offer for transport, handle, or transport dangerous goods. When the organization applies to Transport Canada for approval, the Department reviews the Interim approval—Transport Canada grants application and provides either an interim or an indefinite approval, interim approval for a specified period before it has completed its investigation of an which allows the organization to transport a particular good over an organization’s preparedness to respond to an identified period of time. emergency and where it has no reason to suspect that the plan cannot be implemented or 1.37 We assessed the practices used by Transport Canada to review will be ineffective. and approve ERAPs. We looked at the Department’s ERAP approval Indefinite approval—Transport Canada approves plans for a specified period, when it activities for the period from 1 April 2007 to 1 April 2011 along with has concluded that a plan can be implemented some information dating back as far as 1994. and will be effective in responding to a release of a dangerous good. 1.38 According to the Act, interim approvals are to be a temporary measure until indefinite approval can be given. The reviewer is to

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check whether the information included in the application is reasonable and to verify that the telephone number for ERAP activation is correct. Interim approval can be given even if information is missing from the application, and provided that the reviewer has no reason to believe that information in the application is incorrect.

1.39 We found that of the 926 ERAPs in place, 473 have received indefinite approval from Transport Canada and 453 have received interim approval. Of the 453 ERAPs with interim approval, almost 50 percent of these approvals were provided over 5 years ago and about 15 percent of these were provided over 10 years ago. For example, one company transported shipments of at least 3,000 litres of flammable propane gas for over 13 years with only interim approval of its plan. The Department has not determined the risks associated with these delays, and therefore it cannot determine an appropriate risk- based review cycle or evaluate its resource needs.

1.40 Transport Canada’s guidance for staff conducting ERAP assessments is insufficient to ensure that assessments are fair and consistent, a concern echoed by some of the staff conducting these reviews. Deficiencies included

• inadequate guidance to determine whether an organization is required to prepare or activate an ERAP;

• a lack of criteria to judge whether elements of ERAPs are acceptable—for example, what would be an effective communication strategy in the event of an emergency;

• no definition of what constitutes a “major” and a “minor” deficiency, even though the remedy for a major deficiency is to halt shipments; and

Cooperative response agreements— • little guidance on how ERAPs for organizations with cooperative Organizations transporting dangerous goods response agreements should be assessed. for which common response equipment and expertise would be needed to respond to an incident may enter into mutual aid or cooperative 1.41 We reviewed a representative sample of 49 files—5 national and agreements to pool their resources (for example, maintaining response teams to cover part of a 44 regional—where ERAPs had received indefinite approval. Guidance geographical area in which these goods are calls for staff to collect and review inspection reports as a step in all transported). regional ERAP reviews. Inspection reports had not been considered in any of them. There were numerous examples of shortcomings in review, approval, follow-up, and documentation. These examples included cases where Transport Canada was concerned about whether ERAPs were adequate, but it did not undertake timely follow-up. In some cases, no follow-up was done. In our opinion, Transport Canada is not able to demonstrate that it has exercised diligence in providing approvals.

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Management has not acted on long-standing concerns regarding inspection and emergency plan review practices

1.42 In September 2006, Transport Canada’s internal audit group reported the results of an audit of inspection practices for the transport of dangerous goods. The audit made a number of observations and recommendations to strengthen management practices in the Transportation of Dangerous Goods (TDG) Directorate. Senior management accepted the audit’s observations and recommendations and committed to make changes by April 2008.

1.43 Since then, based on information prepared by the TDG Directorate, the Department determined that it had implemented the management plan established in response to the recommendations and that further monitoring of progress against the recommendations was not necessary.

1.44 Despite this, we found that some of the key issues identified by Transport Canada in its 2006 internal audit remain unresolved. • Transport Canada has not evaluated the risk associated with an incomplete inventory of regulated organizations. It has stated that its existing databases include the higher-risk organizations that transport dangerous goods, but no evaluation was conducted to support this assertion. • The number of emergency response assistance plans with interim approval status (453) remains about the same as in 2006, but there has been an increase in the delay in reviewing these plans. • The TDG Directorate committed to develop a risk assessment framework to provide a rationale for site selection and inspection. The framework has yet to be developed. • The Transport Canada internal audit noted that there was an inconsistent approach to inspections and recommended new reporting procedures that should include elements such as documenting the scope of inspection and the manner of follow- up. There is still no clear guidance on documenting the scope or how to follow up on instances of non-compliance.

1.45 Recommendation. Transport Canada should establish and implement a clear action plan that sets out specific corrective steps to be taken to address our audit findings and the time frames within which the corrective actions will be taken. In particular, the action plan should ensure that • a national risk-based inspection planning process is developed and implemented,

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• compliance monitoring and follow-up activities are properly documented,

• gaps in guidance for compliance monitoring and follow-up activities are addressed,

• roles and responsibilities for monitoring compliance with the Act and regulations are clarified,

• a performance measurement system that allows the Department to report on the rate of regulatory compliance is implemented,

• requirements for the review and approval of emergency response assistance plans are clarified,

• guidance to review emergency response assistance plans is developed, and

• a plan and timeline to complete emergency response assistance plan reviews is developed and implemented.

The action plan should indicate the staff responsible for each item and provide resources necessary to make the required change.

The Department’s response. Agreed. Transport Canada will undertake the following actions to address audit findings:

• Complete a risk assessment by January 2012 that will serve as the basis for inspection schedules to be conducted by staff in each Transport Canada regional office. Managers and inspectors will be trained on the risk-based inspection schedule before its implementation in April 2012.

• Strengthen compliance monitoring guidance, tools, and processes and document follow-up procedures by June 2012; train managers and inspectors on both enhanced monitoring and follow-up procedures by October 2012; and, to support the review of Transport Canada inspection activities, introduce a quality assurance program by April 2013.

• Clarify and document roles and responsibilities of the various departmental modal groups involved in the inspection of dangerous goods, in updated memoranda of understanding by June 2012.

• Update and implement a performance measurement strategy for the Transportation of Dangerous Goods Program by December 2012. The strategy will inform ongoing data collection practices on the rate of regulatory compliance and will support performance reporting.

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• Review the Emergency Response Assistance Plan Program’s policies and procedures for approvals by 1 June 2012; develop enhanced guidance material for staff by 31 December 2012; and train staff and implement by 1 April 2013.

National Energy Board 1.46 The National Energy Board is an independent federal agency established in 1959 to promote safety and security, environmental protection, and economic efficiency in regulating those pipelines that cross provincial, territorial, or national boundaries. The Board’s regulatory oversight applies to the entire life cycle of a pipeline (and related infrastructure) or facility project, including construction, operation, and abandonment. The Board is a quasi-judicial federal tribunal that operates as a court of record and reports to Parliament through the Minister of Natural Resources.

1.47 The Board regulates approximately 71,000 kilometres of pipelines. Oil and gas pipelines go through and near major communities throughout Canada. Major gas pipelines that have been recently approved include the Mackenzie Valley pipeline and the Deep Panuke pipeline, while the Vantage pipeline is a major gas pipeline that is proposed but not yet approved. Keystone XL is a major oil pipeline that was recently approved (in Canada only), while other major oil pipelines proposed, but not yet approved, include the Northern Gateway pipeline and the Bakken pipeline (Exhibit 1.3). As more pipelines are approved and begin to operate, the National Energy Board will have increased regulatory oversight responsibilities.

1.48 These pipelines, which are located in both rural and urban areas and across different terrains, require ongoing surveillance and maintenance to ensure that they continue to operate according to the National Energy Board Act, its regulations, and standards such as the Canadian Standards Association’s Oil and Gas Pipeline Systems standard. Pipeline incidents, such as gas leaks and oil spills, have occurred across Canada (Exhibit 1.4). The ages of these pipelines range from newly built to some that were constructed in the 1950s (Exhibit 1.5).

1.49 The National Energy Board is responsible for administering the National Energy Board Act and its regulations, namely the Onshore Pipeline Regulations, 1999 and the National Energy Board Processing Plant Regulations. The Act and regulations identify obligations for regulated pipeline companies and the Act gives the Board enforcement and oversight responsibilities. According to the Board, it promotes safety and security, environmental protection, and economic efficiency

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for the regulation of pipelines, energy development, and trade. The Board states that in carrying out this purpose, it takes proactive steps to clearly define its expectations, through regulations and other means,

Exhibit 1.3 Operating, approved, and proposed gas and oil pipelines under the oversight of the National Energy Board

Gas pipelines

MACKENZIE VALLEY Whitehorse Iqaluit

Yellowknife

St. John’s

Edmonton Vancouver Victoria Calgary Charlottetown DEEP Regina Fredericton PANUKE Winnipeg Québec Halifax Ottawa VANTAGE Montreal Toronto

Oil pipelines

Whitehorse Iqaluit

Yellowknife

NORTHERN GATEWAY

St. John’s Edmonton Vancouver Victoria Calgary Charlottetown Regina Fredericton Winnipeg Québec Halifax KEYSTONE XL Ottawa BAKKEN Montreal Toronto

Operating

Approved The pipeline project was approved by the National Energy Board and the company is allowed to construct the pipeline. Applied The pipeline project was filed by the company and is currently in the assessment stage by (proposed) the National Energy Board; there is no decision yet whether the project can go ahead.

Source: Adapted from National Energy Board data

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and to hold regulated companies accountable for actions that affect public safety and the environment. For the 2011–12 fiscal year, according to the Board, it has a budget of approximately $7.3 million and a staff of 63 to conduct its compliance verification activities, such as inspections and audits.

1.50 Our audit examined whether the National Energy Board had appropriately • carried out its compliance verification activities in a manner that would allow it to determine if regulated companies adhered to legislation, standards, and Board expectations; • reviewed the emergency procedures manuals of the regulated companies; and • designed and implemented a risk-based approach as part of its monitoring of regulated companies.

Exhibit 1.4 Location of incidents on pipelines regulated by the National Energy Board, January 2009 to March 2011

Incident levels Level I incident No immediate threat to the public or to company personnel and facility infrastructure; no effects outside company property; minimal environmental effects; control of released product has been completed or is pending. Level II incident Some injury or threat to the public and company personnel; potential threat to company facility infrastructure; no immediate threat outside company property, but Whitehorse the potential exists to extend beyoIqalunitd boundaries; moderate environmental effects; imminent control of released product is likely but not yet established.

Yellowknife Level III incident Serious injury or fatality of a member of the public or of company personnel, or an ongoing threat to the public; ongoing or imminent threat to facility infrastructure; effects extend beyond company boundaries; significant and ongoing environmental effects; uncontrolled release of product continuing and control is not imminent.

Note: Conditions listed under each level are not exhaustive.

St. John’s Edmonton Vancouver Victoria Calgary Charlottetown Regina Fredericton Winnipeg Québec Halifax Montreal Ottawa

Toronto

Source: Adapted from National Energy Board data

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1.51 Our recommendation to the National Energy Board concerning compliance verification and emergency procedures manuals appears at the end of this section, in paragraph 1.78.

Exhibit 1.5 Age of pipelines regulated by the National Energy Board, as of July 2011

Unknown age: 1,733 km

50 years or older: 9,158 km Less than 30 years: 35,733 km

Between 30 and 50 years: 22,673 km

Note: This chart includes kilometres for only approved and operating pipelines. It does not include the kilometres for pipelines categorized as deactivated, deactivation in progress, or decommissioned. Source: Adapted from National Energy Board data.

There is a lack of follow-up by the Board on identified deficiencies

1.52 We examined the National Energy Board’s compliance verification activities, such as inspections and audits, for the period between 2007 and 2010. We looked to see whether the Board had monitored the regulated companies in a manner that would allow it to determine if the companies were meeting the requirements to transport dangerous products by pipeline according to established legislation, standards, and Board expectations.

1.53 Under the National Energy Board Act, the Board has responsibilities to promote the safety and security of pipelines, including providing for the protection of the environment. The Board may also make regulations governing the design, construction, operation, and abandonment of a pipeline.

1.54 Compliance verification activities are critical for ensuring that regulated pipeline facilities are safe, secure, and built and operated in a manner that promotes the safety of Canadians and protects the environment. For example, regulations under the Act require regulated companies to have a pipeline integrity management program in place to provide for periodic assessment of the pipelines’ structural integrity, to guide regular maintenance, and to help prevent a spill or release. Compliance verification of regulated companies includes activities such as inspections, audits of management systems and programs, compliance meetings, and evaluations of companies’ emergency response exercises.

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1.55 We selected a representative sample of 56 compliance verification activities that the Board conducted between 2007 and 2010 and examined whether the Board carried out its responsibilities according to established legislation and standards. (The results of our examination of this sample are found in Exhibit 1.6.) These activities were planned by the Board based on its risk-based approach that prioritizes compliance monitoring activities that it plans to conduct (see paragraph 1.73). We also examined whether the Board has adequate guidance for staff to ensure that regulated companies complied with the regulations and standards.

1.56 Cancellation of compliance verification activities. We no ted that of the 56 planned high-risk compliance verification activities selected for review, 11 (20 percent) were later cancelled by the Board (Exhibit 1.6). A rationale was provided for the cancellation in 7 of the 11 cases. For 4 of the 11 cancelled activities, there was no evidence that they would be rescheduled or addressed through another compliance activity despite the fact that they were identified by the Board through its risk prioritization process as being high risk.

1.57 Information regarding nature and extent of reviews. Of the 45 planned compliance activities not cancelled, we found that files for 6 of these (13 percent) did not contain key documentation on the nature and result of compliance verification activities, and therefore we were unable to determine whether these activities were completed or whether there may have been any gaps or deficiencies identified (Exhibit 1.6).

Exhibit 1.6 The National Energy Board did not follow up on deficiencies it identified through the compliance verification activities

Number of compliance verification activities we examined* 56

• Activities that were cancelled 11

• Activities that resulted in no gaps or deficiencies 10

• Activities that were missing key documentation 6 As a result, we were unable to determine whether these activities were completed or if there were any gaps or deficiencies.

• Activities that identified gaps or deficiencies 29 No evidence of follow-up to ensure that gaps or deficiencies were addressed in 27 of these 29 cases.

* Representative sample selected from a population of 253 activities conducted between 2007 and 2010 for the program areas and compliance activities that we examined.

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1.58 Required follow-up on gaps and deficiencies. We noted that 29 of the 45 compliance activities (64 percent) identified multiple gaps and deficiencies with regulated companies’ systems and processes designed to ensure safety, pipeline integrity, and protection of the environment (Exhibit 1.6). Of concern is that in 27 of these 29 cases (93 percent), we found no evidence that the Board followed up with the companies to determine whether the gaps and deficiencies had been addressed. As a consequence, we have concluded that the Board has not exercised a key element of regulatory monitoring: ensuring that identified weaknesses have been corrected by the regulated companies. Documenting the nature and extent of a completed compliance activity is essential to demonstrate that the Board is meeting its regulatory responsibilities. Inadequately documenting the results of compliance activities and the verification of actions taken also makes Exposing a pipeline for an integrity inspection it extremely difficult for staff to follow up on those activities, which is Photo: National Energy Board especially critical whenever there is high employee turnover.

1.59 Guidance on conducting compliance verification activities. In addition to noting a weakness in follow-up procedures, we also noted weaknesses in guidance on how to conduct compliance activities. Overall, we found that guidance for Board staff conducting the compliance verification activities was unclear in a number of important areas. Specifically, we found that there was limited guidance concerning • what follow-up procedures should be undertaken and documented when a gap or deficiency is identified through each type of compliance activity; • how to ensure that corrective actions required of companies were in fact implemented, or whether they were implemented in a timely manner; • how to determine whether an identified gap represents a major or minor deficiency; and • when to have senior sign-off or review of the results of a compliance verification activity and who must conduct the sign- off or review. With limited guidance, and unclear direction for Board staff as to what their response should be when a gap or deficiency is identified, it is difficult to ensure that all regulated companies are treated consistently.

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Oversight of emergency procedures manuals is deficient

1.60 Under the National Energy Board Act and its regulations, regulated companies are required to submit emergency procedures manuals and any subsequent updates to manuals for any pipelines they operate. In a 2002 letter to regulated companies, the Board set out its expectations for the contents for the manuals—at a minimum, the manuals should include information about 22 subjects, including environmental areas requiring special consideration or protection, description and location of emergency response equipment, and lists of persons in emergency planning zones.

1.61 The Act allows the Board to examine and evaluate company emergency plans, procedures, and practices. This allows the Board to determine the appropriateness and effectiveness of a company’s emergency preparedness response program, which includes emergency procedures manuals. After assessing the manuals, if Board staff find gaps or deficiencies against Board expectations, they are required to inform the pipeline company of the gaps or deficiencies and can request corrections to the manuals. Staff are then to record any follow-up actions to be taken to correct the manuals and ensure they are updated accordingly.

1.62 A thorough and timely review of the manuals submitted is essential for ensuring that in the event of an incident or emergency, such as an explosion in a gas pipeline or a leak in an oil pipeline, there is an established and effective response plan that can be implemented immediately to help mitigate the effects.

1.63 As part of our audit, we examined the procedures established by the National Energy Board to review and assess the emergency procedures manuals of the regulated companies according to the legislation, standards, and guidelines. To do so, we looked at whether the Board had

• received all required emergency procedures manuals and updates,

• reviewed all manuals received,

• communicated any deficiencies identified in its review of the manuals to the regulated company, and

• assessed whether identified deficiencies had been corrected in the manuals.

1.64 Proportion of emergency procedures manuals reviewed. According to Board records, the Board requires emergency procedures manuals for 83 regulated companies. We found that of the 83 regulated

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companies, the Board had conducted a review of manuals for only 51 of the companies (61 percent). The average time for review was almost three years after the manuals were submitted to the Board, with 16 manuals from 9 companies taking five or more years to be reviewed.

1.65 Emergency procedures manuals for the remaining 32 regulated companies (39 percent) had yet to be reviewed. The average length of time that these companies’ manuals have gone without a review by the

Pipeline right-of-way during construction Board is over three and half years, with 18 manuals from 12 companies Photo: National Energy Board waiting to be reviewed for four or more years.

1.66 The review of emergency procedures manuals by the Board is typically conducted within one day by reviewing the manual contents against a checklist of required items. This is, however, a cursory review for the presence or absence of information, and it does not assess the validity or accuracy of the information contained in the manuals.

1.67 We selected a representative sample of 30 companies from the 51 companies whose manuals were reviewed by the Board. We examined the Board’s manual reviews to determine whether they were conducted in a manner consistent with established Board guidance and whether the Board had advised regulated companies of any deficiencies. We also examined whether the Board followed up to ensure that regulated companies had corrected the deficiencies.

1.68 We noted that the Board identified deficiencies in all of the emergency procedures manuals that we reviewed. Deficiencies that were noted included • no identification of the hazards posed by the operation of the facilities, • no assessment of the risks posed by the hazards identified, • no list of residents in a potential accident zone, • no map of the nearby residences or evacuation routes, • no description or location of emergency response equipment, • no description of any environmentally sensitive areas potentially affected by an incident, and • no explanation of governmental roles in an emergency response.

1.69 Notwithstanding that all 30 manuals had deficiencies, only 3 of the 30 files (10 percent) contained evidence that the identified deficiencies had been communicated to the regulated companies. Only 1 of the 30 files contained evidence that the Board had checked to ensure that the deficiencies noted had been corrected.

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1.70 Staff training and guidance to complete the reviews. As part of our audit we reviewed the formal training and guidance provided to Board staff who review emergency procedures manuals. Training and guidance is essential to ensure that staff understand what is expected of them and to ensure they understand the steps that must be taken to properly review emergency procedures manuals.

1.71 We found that training for those undertaking the manual reviews consisted of providing a checklist to be completed when reviewing the manual. We noted that the checklist contained few instructions and little supporting explanation or guidance for each of the elements that were to be reviewed.

1.72 During the course of the audit, the Board revised the review process and prepared a new review checklist that contains additional guidance for those completing the reviews. The Board has indicated that the revised process will include verification of certain critical information, such as confirming that a company’s emergency contact number is correct and that all of a company’s facilities are listed in its emergency procedures manual. However, the Board indicated that not all of the critical information will be verified when a company initially submits an emergency procedures manual, or an update to it. Companies selected for a more thorough examination, such as through an emergency management system audit, would be chosen through the Board’s risk-based monitoring approach.

The Board has designed a sound risk-based monitoring approach, but improvements are needed in its implementation

1.73 We examined whether the Board has designed a risk-based approach as part of its monitoring system that will allow it to determine whether regulated companies are meeting the requirements to transport dangerous products according to established legislation and standards. We also examined implementation of the risk-based approach as part of the sampling of the Board’s compliance monitoring activities and reviews of emergency procedures manuals.

1.74 We found that, overall, the Board has designed a sound risk- based approach to monitor regulated companies’ adherence to established regulations, standards, and Board expectations. Every year, the Board evaluates regulated companies by level of risk in six program areas: security, safety, environment, pipeline integrity, damage prevention, and emergency management. Risk assessments from all areas and companies are evaluated, and then an overall risk-based plan is prepared for the compliance verification activities for the coming

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year. The Board prioritizes resources available for compliance verification activities, and it focuses on companies requiring higher levels of regulatory compliance oversight (the top one third of prioritized companies).

1.75 However, some improvements are needed to better implement the risk-based approach. In particular, the accuracy and validity of the risk scores assigned to companies are currently affected by several factors:

• The cursory review of companies’ emergency procedures manuals does not provide an accurate assessment of a company’s level of risk for this aspect of emergency preparedness (see paragraph 1.66). In addition, the Board has also not reviewed the emergency procedures manuals for 39 percent of regulated companies (see paragraph 1.65), which means that information to assess those companies’ level of risk is missing.

• Where reviews of emergency procedures manuals have been conducted, the Board largely failed to follow up to confirm that identified deficiencies were corrected (see paragraph 1.69), and therefore the Board is missing key information that could affect the evaluation of companies’ risk.

• The incomplete documentation of other compliance verification activities and the lack of follow-up to ensure that identified deficiencies have been addressed (see paragraphs 1.55–1.58 and Exhibit 1.6) mean the Board is missing some information upon which to base its assessment of company risk.

1.76 The Board has also conducted limited analyses to determine whether its risk-based approach is resulting in the right type, number, or frequency of compliance verification activities to ensure that the Board is meeting a minimum level of regulatory oversight. For example, the Board’s 2002 letter providing guidance to regulated companies (see paragraph 1.60) notes that each company should, at least once every three years, conduct a full-scale emergency exercise involving all agencies with whom a company would interact in the event of an emergency, including the Board. With 83 regulated companies, that would mean an average of 27 full-scale emergency exercises conducted each year. From 2007 to 2011, Board records indicate that the Board evaluated a total of only 9 full-scale exercises. While a risk-based approach may not require the Board to evaluate all the full-scale emergency exercises each year, the Board’s analysis of its risk-based approach is required in order to determine if the right type and number of compliance verification activities are being done to ensure that an adequate level of oversight is being carried out.

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1.77 Lastly, the risk-based approach is also affected by limited guidance for staff in carrying out some compliance verification activities. For example, when a gap or deficiency is identified through an audit, there is limited guidance on how to determine if it is major or minor, therefore making it difficult to assign an accurate level of risk. There is also limited guidance to assist staff in identifying the timelines by which companies are required to fix gaps and deficiencies. This means that if deficiencies go unaddressed for many years, then a company’s risk level could remain high. The Board has also not identified its tolerances for risks resulting from what is not included in its compliance verification plan or from planned compliance verification activities that are not completed. For example, if the Board carries out compliance verification for only the top 33 percent of prioritized risks, there is a chance that some companies’ management systems that have significant risks may go without examination.

1.78 Recommendation. The National Energy Board should establish and implement a clear action plan that sets out specific corrective steps to be taken to address the audit findings and the time frames within which the corrective actions will be taken. In particular, the action plan should ensure that

• improved guidance to assist staff in carrying out their compliance verification activities (including the review of emergency procedures manuals) is developed and implemented;

• compliance verification activities are properly documented to demonstrate that due diligence has been exercised;

• follow-up of identified gaps and deficiencies, to verify that regulated companies have implemented corrective actions, is carried out and documented in a timely manner;

• all the emergency procedures manuals and updates for companies are checked to ensure that critical information is included and is satisfactory and that the results of that review are used to update companies’ risk profiles; and

• the assessment of company risk is based on accurate and sufficient information.

The action plan should indicate the staff responsible for each item and provide resources necessary to make the required change.

The Board’s response. Agreed. The National Energy Board will establish and implement a clear action plan to address the audit findings.

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The Board supports continual improvement and in the 2010–11 fiscal year enhanced its compliance verification process to require justification and senior-level approvals before cancelling a compliance verification activity (CVA). Additionally, the process to evaluate emergency exercises and review emergency procedure manuals (EPMs) now requires follow-up and documentation to address gaps and deficiencies. The emergency exercise process also requires review and senior-level sign-off of all reports.

The Board is further enhancing its oversight of company EPMs, and by January 2012 will assess critical information in all EPMs. By March 2012, the Board will follow up and document where critical information is missing and address any gaps or deficiencies.

By April 2012, the Board will strengthen its compliance verification process to make sure that timely follow-up actions are undertaken to address gaps and deficiencies, and are appropriately documented. The Board will develop criteria to differentiate between major and minor deficiencies. Criteria for senior-level review and sign-off of CVAs will also be developed. Staff will be trained on all updated processes.

Finally, by April 2012, the Board will enhance its risk-based planning by creating a process to evaluate the effectiveness of its risk model.

Conclusion

Transport Canada 1.79 Transport Canada has not designed and implemented the management practices needed to effectively monitor regulatory compliance with the Transportation of Dangerous Goods Act, 1992. Key elements that are missing include a national risk-based regulatory inspection plan and necessary guidance for inspectors. In many instances, the nature and extent of the inspections carried out are not documented. We noted that there was little indication that the Department had followed up on identified instances of non- compliance to ensure that regulated organizations transporting dangerous goods had corrected the problems identified.

1.80 Transport Canada is not adequately reviewing and approving the emergency response assistance plans submitted by regulated organizations. Nearly half the plans submitted have been provided only an interim approval. Many of the organizations shipping dangerous goods have operated with an interim approval for over 5 years, and some for over 10 years.

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1.81 Some of the issues contained in this report are not new. A 2006 departmental internal audit identified similar issues. Five years later, the Department has yet to address the identified weaknesses in its management practices.

National Energy Board 1.82 The National Energy Board has designed a sound risk-based monitoring system that it uses to determine whether regulated companies are meeting the requirements to transport oil, gas, and other dangerous products by pipeline. However, improvements to the implementation of the risk-based approach are required that would allow for a more accurate assessment and prioritization of the risks associated with regulated companies.

1.83 While the National Energy Board’s compliance verification processes identify deficiencies in the practices used by regulated companies, in the files we examined there is little indication that the Board takes steps to ensure that the identified deficiencies are corrected.

1.84 The National Energy Board has not appropriately monitored whether regulated companies have prepared emergency procedures manuals according to established legislation, standards, and Board expectations. The emergency procedures manuals have yet to be reviewed for about 39 percent of companies. For those that have been reviewed, we noted that in almost all instances identified, deficiencies were not communicated to the regulated companies, and in only one case did the Board check to ensure that the deficiencies had been corrected. We have concluded that the Board’s oversight of companies’ emergency procedures manuals is deficient.

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About the Audit

All of the audit work in this chapter was conducted in accordance with the standards for assurance engagements set by The Canadian Institute of Chartered Accountants. While the Office adopts these standards as the minimum requirement for our audits, we also draw upon the standards and practices of other disciplines.

Objectives The objective of the audit was to determine whether Transport Canada and the National Energy Board have designed and implemented risk-based monitoring systems to determine whether regulated organizations transport dangerous products in accordance with established legislation and standards and have designed and implemented practices and procedures to monitor whether regulated organizations have prepared emergency response plans in accordance with established legislation and standards. In support of this objective, the two sub-objectives for the audit were to determine whether

• Transport Canada and the National Energy Board have designed and implemented a risk-based monitoring system to determine whether regulated entities are meeting the requirements to transport dangerous products according to established legislation and standards; and

• Transport Canada and the National Energy Board have implemented practices and procedures to monitor whether regulated entities have prepared emergency response plans according to established legislation and standards to respond to releases of dangerous products.

Scope and approach For each audit sub-objective, the audit consisted of interviews with key departmental officials and the review of departmental policies and procedures related to the transport of dangerous products and the review or approval of emergency response plans. Interviews of departmental officials and our review of departmental policies and procedures provided us with an understanding of the practices implemented by Transport Canada and the National Energy Board to determine whether regulated organizations are meeting the requirements to transport dangerous products in accordance with established legislation and standards. A similar approach was used to identify the mechanisms used by the Department and the Board to determine whether regulated companies have prepared emergency response plans in accordance with established legislation and standards. With regard to our audit work at Transport Canada, the audit examined a random selection of files pertaining to general compliance inspections (from a population of 3,551 sites inspected), rail inspections (from a population of 495), and approvals for emergency response plans to determine whether the monitoring system is adequate to allow Transport Canada to know whether dangerous products are transported according to established legislation and standards. With regard to our audit work at the National Energy Board, the audit included an examination of a random selection of compliance verification activities carried out by the National Energy Board to allow it to determine whether regulated companies are in compliance with the established legislation and

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standards. We selected our sample from a population of 253 compliance verification activities conducted between 2007 and 2010 and that were in three program areas; integrity management, safety management, and damage prevention management. The audit also included an examination of a random sample of emergency procedures manuals to determine whether the Board has ensured that the manuals submitted by regulated companies are in compliance with the legislation and standards. We did not audit the National Energy Board’s pipeline application or approval processes. Where representative sampling was used, sample sizes are sufficient to conclude on the sampled population with a confidence level of 90 percent and a margin of error of 10 percent.

Criteria

To determine whether Transport Canada has designed and implemented a risk-based monitoring system to determine whether regulated organizations are meeting the requirements to transport dangerous products according to established legislation and standards, we used the following criteria:

Criteria Sources

Transport Canada has designed a risk-based monitoring system • Transportation of Dangerous Goods Act, 1992 that will allow it to determine whether regulated organizations • Framework for the Management of Risk, are in compliance with the legislation and standards. Treasury Board, 2010

Transport Canada carries out its monitoring in a manner • Transportation of Dangerous Goods Act, 1992 consistent with the system as designed. • Framework for the Management of Risk, Treasury Board, 2010

Transport Canada knows the extent of compliance and has • Transportation of Dangerous Goods Act, 1992 implemented procedures to follow up on incidences of • Management Accountability Framework, Treasury Board non-compliance and to improve compliance. of Canada Secretariat, 2009

To determine whether Transport Canada has implemented practices and procedures to monitor whether regulated organizations have prepared emergency response plans according to established legislation and standards to respond to releases of dangerous products and approved emergency response plans that Transport Canada has determined are in compliance with the Act, we used the following criteria:

Criteria Sources

Transport Canada has defined the requirements that regulated • Transportation of Dangerous Goods Act, 1992 organizations must adhere to in preparing emergency response • Framework for the Management of Risk, assistance plans (ERAPs) and has designed a risk-based Treasury Board, 2010 monitoring approach for prioritizing its review of ERAPs. • CAN/CSA Z731-03 (Reaffirmed 2009) Emergency Preparedness and Response, Canadian Standards Association, 2003 • CAN/CSA Q850-97 (Reaffirmed 2009) Risk Management: Guideline for Decision Makers, Canadian Standards Association, 1997

Transport Canada assesses and approves the ERAPs prepared • Transportation of Dangerous Goods Act, 1992 by organizations in accordance with Transport Canada review • CAN/CSA Z731-03 (Reaffirmed 2009) Emergency procedures. Preparedness and Response, Canadian Standards Association, 2003 • CAN/CSA Q850-97 (Reaffirmed 2009) Risk Management: Guideline for Decision Makers, Canadian Standards Association, 1997

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Transport Canada knows the extent of ERAP adequacy and has • Transportation of Dangerous Goods Act, 1992 implemented procedures to follow up on gaps and deficiencies • Management Accountability Framework, Treasury Board identified in the review of ERAPs. of Canada Secretariat, 2009

To determine whether the National Energy Board has designed and implemented a risk-based monitoring system to determine whether regulated companies are meeting the requirements to transport dangerous products according to established legislation and standards, we used the following criteria:

Criteria Sources

The National Energy Board has designed a risk-based • Framework for the Management of Risk, monitoring system that will allow it to determine whether Treasury Board, 2010 regulated companies are in compliance with the legislation and • Management Accountability Framework, Treasury Board standards. of Canada Secretariat, 2009 • Integrated Risk Management and Corporate Risk Profile, National Energy Board, 2010 • National Energy Board Act • Onshore Pipeline Regulations, 1999

The National Energy Board carries out its monitoring in a • Enforcement Procedures, National Energy Board manner consistent with the system as designed. • Inspections Procedures, National Energy Board • Framework for the Management of Risk, Treasury Board, 2010 • Management Accountability Framework, Treasury Board of Canada Secretariat, 2009

The National Energy Board has implemented procedures to • National Energy Board Act follow up on incidences of non-compliance and to improve • Management Accountability Framework, Treasury Board compliance. of Canada Secretariat, 2009 • Preparing and Using Results-based Management and Accountability Frameworks, Treasury Board of Canada Secretariat, 2005

To determine whether the National Energy Board has implemented practices and procedures to monitor whether regulated companies have prepared emergency response plans according to established legislation and standards to respond to releases of dangerous products, we used the following criteria:

Criteria Sources

The National Energy Board has defined the requirements that • National Energy Board Act regulated companies must adhere to in preparing emergency • National Energy Board letter to all Oil and Gas Companies/ procedures manuals and has designed a risk-based monitoring Security and Emergency Preparedness and Response approach for its review of these manuals prepared by Programs, 2002 companies. • CAN/CSA Z662-07 Oil and Gas Pipeline Systems, Canadian Standards Association, 2007 • CAN/CSA Z731-03 (Reaffirmed 2009) Emergency Preparedness and Response (referenced within CSA Z662-07), Canadian Standards Association, 2003

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The National Energy Board has reviewed the emergency • National Energy Board Act procedures manuals prepared by companies to ensure they • CAN/CSA Z662-07 Oil and Gas Pipeline Systems, Canadian have been prepared according to the Board’s legislation and Standards Association, 2007 standards. • CAN/CSA Z731-03 (Reaffirmed 2009) Emergency Preparedness and Response (referenced within CSA Z662- 07), Canadian Standards Association, 2003 • National Energy Board letter to all Oil and Gas Companies/ Security and Emergency Preparedness and Response Programs, 2002

The National Energy Board has implemented procedures to Management Accountability Framework, Treasury Board follow up on gaps and deficiencies identified in the review of of Canada Secretariat, 2009 emergency procedures manuals.

Management reviewed and accepted the suitability of the criteria used in the audit.

Period covered by the audit This audit covers the period from 1 January 2007 to 30 June 2011. Certain tests related to time periods in which emergency response assistance plans used information dating back to 1994. Audit work for this chapter was substantially completed on 30 June 2011.

Audit team Senior Principal: Bruce Sloan Lead Director: George Stuetz Director: James Reinhart

Amélie Beaupré-Moreau Michael Cestnik Adam Kennedy Marc-Antoine Ladouceur Marie-Soleil Nappert Erin Windatt

For information, please contact Communications at 613-995-3708 or 1-888-761-5953 (toll-free).

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Appendix List of recommendations

The following is a list of recommendations found in Chapter 1. The number in front of the recommendation indicates the paragraph number where it appears in the chapter. The numbers in parentheses indicate the paragraph numbers where the topic is discussed.

Recommendation Response

Transport Canada 1.45 Transport Canada should The Department’s response. Agreed. Transport Canada will establish and implement a clear action undertake the following actions to address audit findings: plan that sets out specific corrective • Complete a risk assessment by January 2012 that will serve as steps to be taken to address our audit the basis for inspection schedules to be conducted by staff in findings and the time frames within each Transport Canada regional office. Managers and which the corrective actions will be inspectors will be trained on the risk-based inspection schedule taken. In particular, the action plan before its implementation in April 2012. should ensure that • Strengthen compliance monitoring guidance, tools, and • a national risk-based inspection processes and document follow-up procedures by June 2012; planning process is developed train managers and inspectors on both enhanced monitoring and implemented, and follow-up procedures by October 2012; and, to support • compliance monitoring and follow-up the review of Transport Canada inspection activities, activities are properly documented, introduce a quality assurance program by April 2013. • gaps in guidance for compliance • Clarify and document roles and responsibilities of the various monitoring and follow-up activities departmental modal groups involved in the inspection of are addressed, dangerous goods in updated memoranda of understanding by June 2012. • roles and responsibilities for monitoring compliance with • Update and implement a performance measurement strategy the Act and regulations are clarified, for the Transportation of Dangerous Goods Program by December 2012. The strategy will inform ongoing data • a performance measurement system collection practices on the rate of regulatory compliance and that allows the Department to report will support performance reporting. on the rate of regulatory compliance is implemented, • Review the Emergency Response Assistance Plan Program’s policies and procedures for approvals by 1 June 2012; develop • requirements for the review and enhanced guidance material for staff by 31 December 2012; approval of emergency response and train staff and implement by 1 April 2013. assistance plans are clarified, • guidance to review emergency response assistance plans is developed, and

Report of the Commissioner of the Environment and Sustainable Development—December 2011 Chapter 1 35 TRANSPORTATION OF DANGEROUS PRODUCTS

Recommendation Response

• a plan and timeline to complete emergency response assistance plan reviews is developed and implemented. The action plan should indicate the staff responsible for each item and provide resources necessary to make the required change. (1.11–1.44)

National Energy Board 1.78 The National Energy Board The Board’s response. Agreed. The National Energy Board will should establish and implement a clear establish and implement a clear action plan to address the audit action plan that sets out specific findings. corrective steps to be taken to address The Board supports continual improvement and in the 2010–11 the audit findings and the time frames fiscal year enhanced its compliance verification process to within which the corrective actions will require justification and senior-level approvals before cancelling be taken. In particular, the action plan a compliance verification activity (CVA). Additionally, the should ensure that process to evaluate emergency exercises and review emergency • improved guidance to assist staff in procedure manuals (EPMs) now requires follow-up and carrying out their compliance documentation to address gaps and deficiencies. The emergency verification activities (including the exercise process also requires review and senior-level sign-off of review of emergency procedures all reports. manuals) is developed and The Board is further enhancing its oversight of company EPMs, implemented; and by January 2012 will assess critical information in all EPMs. • compliance verification activities are By March 2012, the Board will follow up and document where properly documented to demonstrate critical information is missing and address any gaps or that due diligence has been exercised; deficiencies. • follow-up of identified gaps and By April 2012, the Board will strengthen its compliance deficiencies, to verify that regulated verification process to make sure that timely follow-up actions companies have implemented are undertaken to address gaps and deficiencies, and are corrective actions, is carried out and appropriately documented. The Board will develop criteria to documented in a timely manner; differentiate between major and minor deficiencies. Criteria for • all the emergency procedures senior-level review and sign-off of CVAs will also be developed. manuals and updates for companies Staff will be trained on all updated processes. are checked to ensure that critical Finally, by April 2012, the Board will enhance its risk-based information is included and is planning by creating a process to evaluate the effectiveness of its satisfactory and that the results of risk model. that review are used to update companies’ risk profiles; and

36 Chapter 1 Report of the Commissioner of the Environment and Sustainable Development—December 2011 TRANSPORTATION OF DANGEROUS PRODUCTS

Recommendation Response

• the assessment of company risk is based on accurate and sufficient information. The action plan should indicate the staff responsible for each item and provide resources necessary to make the required change. (1.46–1.77)

Report of the Commissioner of the Environment and Sustainable Development—December 2011 Chapter 1 37

Report of the Commissioner of the Environment and Sustainable Development—December 2011

Main Table of Contents

The Commissioner’s Perspective Main Points—Chapters 1 to 5 Appendix Chapter 1 Transportation of Dangerous Products Chapter 2 Environmental Science Chapter 3 Enforcing the Canadian Environmental Protection Act, 1999 Chapter 4 A Study of Managing Fisheries for Sustainability Chapter 5 A Study of Environmental Monitoring Chapter 6 Environmental Petitions