Alberta Energy Regulator Issues Order Against Plains Midstream Canada

CALGARY, ALBERTA--(Marketwired - July 4, 2013) - The Alberta Energy Regulator (AER) has issued an order under section 22 of the Oil and Gas Conservation Act against Plains Midstream Canada and will conduct a full-scale audit of all its Alberta operations in response to the company's failure to follow a number of regulatory requirements.

"Plains Midstream Canada has failed to follow rules that are in place to ensure energy development in Alberta takes place in a safe and responsible manner," said Jim Ellis, Chief Executive Officer of the AER. "As a result, all of Plains Midstream Canada's operations will be subject to additional regulatory scrutiny until we are satisfied it can operate in compliance with AER requirements."

The AER has taken the unusual step of issuing an order under section 22 of the Oil and Gas Conservation Act to ensure that even the most routine or minor applications or decisions involving Plains Midstream Canada receive full review and approval by the AER's chief executive officer. This type of order may be issued when a licensee has been escalated through the Directive 019: Compliance Assurance enforcement process, has a history of noncompliance, or, as is the case with Plains, the regulator feels additional regulatory supervision is necessary.

"This action seriously restricts the ability of Plains Midstream Canada to obtain further approvals for operations in Alberta," added Ellis. "Until the company can demonstrate that it can operate within Alberta's rules and requirements, every single interaction with the Alberta Energy Regulator will be subject to extra scrutiny while we conduct a full audit of its operations."

The audit will include a review of Plains' operations regarding emergency planning and response, pipeline integrity management programs, risk assessment and mitigation, communications and stakeholder relations, and regulatory reporting and progress in connection with action plans required in response to enforcement.

Including recent enforcement actions issued by the AER in connection with the June 7, 2012, Rangeland pipeline failure, Plains Midstream Canada has received 19 high and low risk deficiencies and noncompliances since January 1, 2011. While the AER has issued enforcement action in connection with the Rangeland pipeline failure, it has not completed its final investigation of that incident.

The Alberta Energy Regulator ensures the safe, efficient, orderly, and environmentally responsible development of hydrocarbon resources over their entire life cycle. This includes allocating and conserving water resources, managing public lands, and protecting the environment while providing economic benefits for all Albertans.

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The Alberta Energy Regulator (AER) issued an order under section 22 of the Oil and Gas Conservation Act against Plains Midstream Canada that imposes greater scrutiny of the pipeline company's Alberta operations. All of the company's applications will require CEO approval, and a full audit of Plains' operations will be conducted. The order is a result of the company failing to follow AER requirements.