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2006-11-02_Supplemental Agenda Packet--Dossier de l'ordre du jour supplémentaireCity of Saint John Common Council Meeting Thursday, November 2, 2006 Location: Common Council Chamber Supplemental Agenda 1.1 Easements — Emera Brunswick Pipeline City of Saint John Seance du conseil communal Le jeudi 2 novembre 2006 Emplacement: Salle du conseil communal L'ordre du jour suppl6mentaire 1.1 Emprises proposees visant 1'Emera Brunswick Pipeline Your Worship Mayor MacFarlane and Members of Saint John Common Council I appreciate the opportunity to meet with you this evening. It has been our intent to meet with Council for some time to provide an update on the project. A number of months ago, Council took a position on the project that expressed a preference for a Marine routing as opposed to the overland route we have proposed in our NEB application. At that time, there was not a great deal of information available about the route options or the pipeline generally; and there was a need for more discussion to create greater understanding of route options. We believe we are proposing a project that is good for Saint John and we would like to have Council's support for what we have proposed. We believe the information we have now provided Council and the public should enable Council to shift its position and support this project on its merits. We did not want to come back in front of Council without addressing the many concerns we have heard in the community. We take those concerns very seriously and frankly appreciate the community and City staff bringing them forward. Safety for example has been a major issue and we have been working hard to address safety questions and concerns. Earlier this week a second newsletter was delivered to every household with a focus on safety questions. In addition, our project website has been up and running for several months. This is an around the clock source of information. Examples of other issues we have heard related to restoration, blasting and protecting City infrastructure. At this stage, we believe we have addressed the concerns we have heard from the community to a degree that we are comfortable coming back to Council and requesting support for our project as proposed. My objective today then is to bring you up to date on Emera's commitments respecting the Brunswick Pipeline, provide information about the project and the real estate easements we are seeking from the City and finally, to provide the opportunity for Council to ask questions. Again, we believe that this is a good project for Saint John and are seeking Council's support. Before I go into specifics on the topic of commitments and easement requirements, I want to take a bit of time to talk about the need for this pipeline and LNG. The Brunswick Pipeline is necessary to allow regasified LNG from the Canaport TM LNG terminal to reach Canadian and US markets. Without the proposed pipeline connection to these markets, the LNG terminal is not feasible. The need for an incremental supply of natural gas in the Maritimes is real. This need has been well documented by the NEB. The market is currently supplied by the Sable field offshore Nova Scotia. Sable reserves are steadily declining at the same time as demand for environmentally friendly natural gas is growing. I have with me as a hand -out a chart from a recent NEB report which shows the history of Sable Production as well as a projection. As you look at the graph, you can see the steady decline in production. Compression is being added to the system with two results: in 2007 there will be a marked increase in production. However, shortly thereafter, production will decline more rapidly than before. This is a real concern to the individuals, businesses and electric utilities in the region that have made the investment to burn natural gas. These customers need to know there will be a supply of gas available to them for the long term. This is what Canaport LNG and the Brunswick Pipeline are trying to provide. Fire Chiefs Risk Assessment and Safety First, we must emphasize the importance of safety to our organization. Safety is our foremost business objective. This is a commitment we can back up with proven performance within both our Emera affiliate operations and the operations of the Duke organization which is supporting our permitting, design, construction and operating activities. The Risk Assessment report prepared by the Fire Chief contained a number of recommendations and I want to commend Chief Simonds on the professionalism of his work. As you are aware from the Chief s status report presented to Council on Oct 23, EBPC made a number of commitments in direct response to the recommendations in the report. I want to go over these: EBPC commits to, in consultation with City officials, special design solutions for the proposed pipeline where critical City of Saint John or third party infrastructure is in close proximity to the final pipeline location within the EBPC proposed corridor. These solutions could include added pipeline burial depth, increased separation distances and other pipeline or infrastructure protection measures. These will be in accordance with good engineering practice, national engineering design codes and NEB regulations. EBPC will at its expense and on an ongoing basis, engage SJFD staff in training for emergency response for natural gas transmission pipeline incidents. EBPC will provide and pay for Command Staff - Incident Command Training for natural gas emergencies. EBPC will engage SJFD and other first responders in southern New Brunswick in the development and finalization of an Emergency Response Plan. This plan will be compliant with regulatory requirements and achieve the concurrence of the SJFD. EBPC emergency planning, first responder training and public education will be subject to NEB requirements under the Onshore Pipeline Regulations, 1999 (OPR99) and CSA Z731, and be consistent with all relevant aspects of NFPA 1600. EBPC further commits to initiating a series of exercises to build response capability within the first year of operation. EBPC will fund staff of the SJFD to attend the Natural Gas /LNG /LP Firefighting and Safety Training School offered by the Northeast Gas Association in Massachusetts. EBPC will fund the re- instatement of a Training Officer position within the SJFD to the level of $25,000 annually. EBPC will fund EMO planning costs in the amount of $50,000 on a one -time basis. This would support the integration of the Brunswick Pipeline in Saint John emergency planning. EBPC commits to systematically sharing with the City, results of operation, maintenance and integrity management system audits conducted by the NEB, subject to NEB concurrence. With respect to closing Line Block Valves located along the urban portion of the Brunswick Pipeline, EBPC commits that if a rapid pressure drop is detected, the Gas Controller will initiate remote closure of the appropriate Line Block Valves. Initiation of valve closure in this situation will not require prior field confirmation. EBPC will add Mercaptan to the natural gas entering the Brunswick Pipeline so as to provide citizens an olfactory warning if a gas release occurs. We understand that Council did not accept our offer of assistance for a training officer position as well as our offer to support the cost of EMO planning activities. This offer is still "on the table" should Council subsequently take a different view respecting these items. Our intent with these commitments was to be fully responsive to the Chief and the City to the extent practicable. Some engineering matters - particularly those dealing with the need to protect critical infrastructure cannot be addressed without careful study and in some cases consultation with other landowners. As a result, some matters raised by the Chief remain outstanding but will be the subject of ongoing analysis on our behalf and further discussion with the appropriate technical staff of the City. Nonetheless, you have our commitment that we will take necessary steps to protect City infrastructure. Safety A range of safety concerns have been raised by Saint John residents and while we believe the Fire Chief has addressed these very effectively, we wish to highlight a few considerations: The Brunswick Pipeline will be regulated by the National Energy Board (NEB). The NEB has an exceptional record as a vigilant regulator. There has never been a fatality of a member of the public as a result of an incident on an NEB regulated gas transmission pipeline in Canada. Pipelines installed today are particularly safe because of a range of corrosion protection systems that are employed. These are described more fully both in the NEB evidence we have submitted (copy attached) as well as the Community Contact 2 newsletter we have distributed to Saint John households. High pressure gas pipelines are located in urban areas across Canada with residential and community facilities including schools and hospitals located in close proximity. The Evidence package we have provides examples of this. As well, we have filed studies with the NEB showing that pipelines have no impact on property values or insurance costs. The 31 km urban portion of our proposed route is a mix of Classes 1, 2 and 3 in terms of population density. These Classes are defined by the NEB with Class one being rural equivalent areas and Class 4 (of which there are no areas along our route) being the most dense. EBPC will use Class 3 pipe for the entire 31 km urban portion of its route - this is from the LNG terminal to Spruce Lake. There is more information on Class 3 pipe in your package in the report by Dr. John Keifner. Dr. Keifner notes - and I believe that Chief Simonds has already reported this, that an excavator would have to weigh more than 100 tons to pierce Class 3 pipe and that excavators of this size represent about .5% of those in existence across North America The general building code requirement for pipelines is that they be buried .6 meters below grade. As a further margin of safety, EBPC will bury the Brunswick Pipeline at least .9 meters below grade for its entire length. Restoration We have heard considerable concern respecting the issue of restoration practices, particularly respecting City streets after pipeline installation, but also any property whether owned by the City or residents. Our restoration commitment is straightforward: we will undertake to restore all areas above the pipeline within the City to a standard that is equal to or better than what existed prior to pipeline construction. We also fully appreciate the need for timely restoration, but would point out that it can take from two to four years for some vegetated areas to reach their desired state. Blasting Laying a pipeline in Saint John will require blasting in rocky areas. This has been raised as a concern by residents. EBPC is liable should any blasting damage occur during construction. We take a number of steps to ensure that blasting does not damage existing structures. A customized blasting plan will be developed for each neighbourhood recognizing the rock conditions and the condition of existing structures. Blasting impacts are measured as work progresses to ensure appropriate methods are being used. Routing EBPC have not proposed a marine routing for the Brunswick Pipeline. A combination of safety, scheduling, cost and environmental factors make this option not feasible. These considerations are more fully described in Attachment 12 of our attached Reply Evidence. Because it has not been proposed, the NEB which commences its hearing respecting this project on November 6, 2006 in Saint John, will not direct a marine routing be used for the Brunswick Pipeline. It is nonetheless incumbent upon EBPC to prove to the NEB that its proposed route is safe and minimizes environmental impacts. We are confident that the evidence we have provided the NEB via our initial application, the responses we have provided to the various intervenor questions and finally the attached Reply Evidence make this case. We have proposed as our preferred route one which follows NB Power transmission lines through Rockwood Park. This routing reduces the amount of land that must be cleared for pipeline Right of Way and thus minimizes the project's environmental impact. As mitigating measures within Rockwood Park, EBPC will: build and maintain a trail following the pipeline suitable for biking and/or walking and the trail will be constructed to standards to be agreed with Park stakeholders. construct parking lots at both entrances to the Rockwood Park pipeline Right of Way Trail to enable enhanced access to the Park Project Benefits I already talked about the key rationale for this project as the need for the gas. There are other benefits to note this pipeline and the associated LNG terminal are cornerstone infrastructure investments that will provide a key growth driver for the future economy of the area. In our view, it is clear that Saint John's energy hub economic development strategy is working. Industry will be attracted to this location because of the gas. It could be petrochemicals, or another refinery or some other energy intensive industry, but whatver materializes, it should help us to grow an economy here that retains our young people We also pay significant taxes on this type of project. The total taxes we will pay to New Brunswick including property, income and capital are over $5 million annually. Saint John's share of this is about $700,000 annually. We pay market value for easements. For the easements require from the City of Saint John along our proposed route this will represent a payment of close to $300,000. We also want to be clear that we intend to give back to the community. There have been talks involving City representatives, the Horticultural Society and ourselves ongoing for a number of months. Coming out of those talks we would like to table a community endowment package for Saint John. There are three components to the package: $2.15 million for a number of projects at Rockwood park that were brought to us by the Horticultural Society and the City a fund that will produce annual income so as to enable Rockwood Park to be self sufficient and not require the annual grant that has been provided by the City. additional monies for the City to direct to other Community Projects. The total package is $5.35 million. There is a focus on Rockwood Park because we see it as a community resource that attracts Saint John residents year - round and offers a range of activities that appeal to young and old alike. We also believe that some investment will enable the Park be more successful as a draw for visitors to Saint John. To wrap up, we have worked hard over the past few months to learn about the concerns of the residents of Saint John and City Staff and address those concerns as responsively as possible. We are resolutely committed to continuing to work cooperatively with the City and forging a long -term productive partnership. We are here tonight seeking the City's support. I would welcome any questions "Sf G !aG 10 v N O M 10 V N O t;a P Q 1 t _ � a L a a V u = w v ° LO v Cl) N co O O N O O N 10 O O N LO O O N O O CV M O O N N O O N O 0 N O O O N O O t c 0 0 N w L {n C Q_ N E O vi U s Q E F� O E Z Q ® El C3 - C Q 0 0 0 N i N O w O h O N co Q N i c0 i N W C Q I 10 O O N O Q) N ZCOw .Q O C� w Z a U O co .O M O m O C W ca c co Z 7 O U) XIRA AAC-re 9,4P5 M 14V z�) �E 714 6 v / 6ft(t) e D CornmoiJ opt: icy g, ." R." t", plvfoc-04,�5 W C Z n t" _ A .O m (D m Mi O 6dl m n Ml . 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H 71Z p o a m S• m Z. ti: m C ' o o n CL c S a a ^_ a a 0 i a 'C O n fl C n j ° cr _ -K rD C ry N zi ^ 4 O N 7z- to 0 IQ 8 Z- zr -C3 ;o i CL fl T v It O Z f n 1� • n rr� vJ rt N O 7 g c/+ C 0 , lG o O o 7 C r+ N 'a d rt C ry O D) O to N rt ii O O A CL -t 7 01 C A m < N S N A rt to O ° 'h rt N sm Q y S O O 3 fl+ d to N H O Lft N IA D) m — Of o S � N o ' y N " 3 a e :^ H H 7 H N K eD O C rt 'su* -9 O N m 7 -O N rt S O cD H N m jw N d A o o, r rt 0 ° ^ ; c a M H °� c rt O S c a -a ° 0 N 0- r+ ° O fD r C f^ a rt C rD (D O GA1 r+ A -1 a N C K IA O m to m A A C LA O O 3 y O N A S O N < ° N °- 41 •* lC =r hi H m V f n 1� • n rr� vJ 6 o -c: z 0 nod 7c Z 77 ET C� C) 0 O 0 (1) eD 77, iii � rD 77' rD r, n rD rD rt 0 a m z z N �0 s zo T J � M •n — C _ r T r ^ Y � � 1 s r _ J .w 0 a m z z N �0 _ Z � F o 0 n m a c C T f v � a n a � d f o s 3 _ _ � c do;s F 'n 3 s zo T � M •n — C _ J _ Z � F o 0 n m a c C T f v � a n a � d f o s 3 _ _ � c do;s F 'n 3 n c rfl O O a C 11 O 7 7 a M Q' C O� 7 77' J r n c rfl O O a C 11 O 7 7 a M Q' C O� 7 w 0 rD r+ rD O n �v lot rD VJ c 3 M d 5 o O °(D O m c 3 t n _ a � `° N ' _ O a <, c; o' c o o C g Q 3 > m x-0 3 �o lQ M 0 r -a VI N V1 n O rD N O K CL rr eD M °' H 3 — = -9 O w O - FD* O 'O 4. 2) C eD H fD rL O lw � M C 7 m O C ^� bq Q Q 00 O K r^+ rD 7 y 7 - cr � O Oi k O O 3 in 9 u; O w �D fD H � 'a � Q W � D• M " eD fD S7 S 'p C : r Q (D 7 x tC (D .p -09 ^O O Ul n tD H o a 3 w a 1+ L o IA IA 0 K S O K O cD L a -o l0 0 N N 0 rr 0A rD r+ rD O n �v lot rD VJ W r E. tj S N 77 — ci r G n Y co ci ... ^ 21 < _ y E. f � W N C C C s s = rD rD rD rD rD n == m n Y a w n ry w 'D i T G Z ^ C CL rD W H� ej ci n O r ✓: C .r+ ^ (��` (D ;/, _ "^ .. .+ 'z I'D eD < .Y Ci _ r'D rD 'T n rD rD rD rD 77 rD y rD W W C C d C> C c- P m> 0 0 w R. o :� x ? w � � •-. ac �` as � � � ? ,� ;` p a `� � p •a s n. m — n' oc _ w ZZ- 00 � ac , 2 z r • � �. � Oq w � O .' rD w � � ,�•, '» '* rK„ ?7 a y M O A O� rc Q ��* O 'Q 4 d T1 w C ¢ N d ?7 r o' z w o w Ul y `C oo cf� w _ 9 . oq co o p' C- n , G, M (p v n a 7 0 w y •� A ro y D' O w c cn uNi /•• y Z 0 n w 0 'p rD S CrJ a 01 w C a T n �z7 n C > p d a w ac o 3 w oc a w c o' r n. ma c 17 rt� N d C� C tD fA rt A H S T 0 c a 0 0 S eD O 1 A O e f1 n A fD 7 (D K O a 0 7 O S rD S �• eD rD A 7 0 a 7, ro c o_ n 0 C. 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O O � C (D E- ^ rD K C o3 -b n eD O fD ^ �o c 3 r 3 O rt Z3 11 W. Nalana, Energy Office naWrr.V Board de t'&xerrgiea The Public Hearing Process Canada The National Energy Board considers major regulatory matters through the public hearing process. This bulletin describes that process. It includes information on inhere hearings are held, where applications may be examined, the respective roles of Board Counsel, staff and the hearing process officer, the sequence of procedures at the hearing and the release of the decision. THEBOARD The National Energy Board is an independent regulatory tribunal that was created by the Parliament of Canada in 1959. Its powers and jurisdiction are based on the National Energy Board Act, the Canada Oil and Gas Operations Act and cer- tain provisions of the Canada Petroleum Resources Act. The purpose of the Board is to make decisions that are fair, objective, and respected. The Board achieves this purpose by regulating in the Canadian public interest certain areas of the oil, gas, and electric utility industries. Copies of the Acts are available from the Board and from the Canada Communications Group, Public Works and Government Services Canada, 45 Sacre -Coeur Blvd., Hull, Quebec, K I A OST PUBLICATIONS This information bulletin is one of a series that the Board publishes on its activities and procedures. Comments on this bulletin or suggestions for future topics are welcome. These bulletins provide general information only. For details of par- ticular items, reference must be made to the relevant legislation. BULLETINS IN THIS SERIES I. Pipeline Route Approval Procedures 2. The Public Hearing Process 3. Non - Hearing Procedures 4. How to Participate in a Public Hearing 5. The Board's Publications 6. The Regulation of Tolls and Tariffs 7. The National Energy Board Library 8. Electric Power. A Compendium of Terms 9. Protection of the Environment 10. Pipeline Tolls and Tariffs: A Compendium of Terms 1 1. The Frontier Information Office 12. Pipeline Safety 13. Pipeline Regulation: An Overview for Landowners and Tenants © Her Majesty the Queen in Right of Canada 1996 as represented by the National Energy Board Cat No. NE 12 -3/2E ISSN 0825 -0170 This information bulletin is published separately in both official languages. For further information, please contact Communications Group National Energy Board 444 Seventh Avenue S.W. Calgary, Alberta T2P 0X8 (403) 292 -4800 Fax: (403) 292 -5503 © Sa Majeste la Reine du Chef du Canada 1996 represente par I'Office national de 1'energie No du cat. NE 12 -3/2F ISSN 0825 -0189 Ce bulletin est publie separement clans les deux langues officielles. Pour de plus amples renseignements, contactez Groupe des Communications Office national de I'energie 444, Septieme Avenue S. -O. Calgary (Alberta) T2P 0X8 (403) 292 -4800 Telecopieur. (403) 292 -5503 INFORMATION BULLETIN 2 The Public Hearing Process This information bulletin explains the procedures currently used at public hearings by the National Energy Board (NEB). For further information, consult the NEB Rules of Practice and Procedure and the NEB Act Types of Hearings Under the NEB Act, the Board holds public hearings in order to hear all sides and points of view prior to mak- ing decisions on specific matters. These include: • certain applications for the construction and operation of international or interprovincial oil and gas pipelines or international or designated interprovincial power lines. (See NEB Act, Part III); • certain applications to set the tolls and tariffs of pipeline companies under the Board's jurisdiction. (See NEB Act, Part IV); • applications for a licence to export natural gas, oil or electricity, or to import natural gas. (See NEB Act, Part VI); • interventions received from landowners opposed to the detailed route of a proposed pipeline. (See NEB Act, Section 34). The Board also uses the public hearing process to conduct inquiries. For example, hearings were held in 1986 as part of the inquiry into the federal regulation of electricity exports. The First Step After a company files with the Secretary of the Board an application requiring a hearing, it becomes a public document and is made available in the Board's library. A news release is issued by the Board notifying the public of the filing. The Board, either on its own or at the request of the Minister of Natural Resources, can initiate an inquiry on a particular issue. In either case, news releases are circulated. Communications All communications between the Board, the applicant, and other parties go through the Secretary of the Board. In this way, all correspondence becomes part of the record and is available for examination by anyone. Initial Examination The Board examines every application to ensure all the required information is included. If necessary, the Board may request additional information from the applicant to ensure that the application is complete. All additiona' information is on the public record. Hearing Orders and Directions on Procedure Once the Board is satisfied that an application is complete, it issues a hearing order containing directions on the procedures for the hearing. The order gives the location and date of the public hearing and the directions on procedure outline the steps to be followed by the applicant and intervenors, as well as any specific deadlines, such as the date by which intervention notices must be received. The Board also issues a news release to announce the hearing. Issues Attached to the hearing order, in most cases, is a list of issues that are to be dealt with at the hearing. The Board also permits parties to suggest additional relevant issues to be discussed at the hearing. Location of the Hearing Although the Board has hearing rooms at its office in Calgary, it may conduct hearings anywhere in Canada. The Board's policy is to hold hearings in the region most affected by the proposed application. This can include moving the hearing from one location to another to accommodate local interests. Availability of the Application Once a hearing order is issued, the application and any associated documents are available for public viewing at the head office of the applicant company in addition to the Board's library. They may also be placed at town halls or libraries near the hearing sites if the application is expected to draw significant local attention. All registered intervenors are entitled to receive a copy of the application from the company. Interventions To participate in a public hearing, interested parties must send a letter, facsimile or formal legal submission to the Secretary of the Board stating their interest and reasons for wanting to participate. A time limit for the filing of interventions is set in the hearing order. It is not obligatory for an interested party to retain legal counsel in order to participate in the hearing. If a party is unable to show it would be affected by the Board's decision, the Board may refuse to recognize the party as an intervenor in the hearing. However, the Board recognizes that many public groups, such as environmental associations, may raise issues relevant to the broad public interest of Canadians and such groups are frequently accorded status. For further details on interventions, see Information Bulletin No. 4, How to Participate in a Public Heoring. Letters of Comment If someone wants to make his or her views known to the Board, but does not wish to directly participate at the hearing, he or she may file a letter of comment with the Secretary of the Board and, if applicable, send a copy to the applicant. The letter of comment states the writer's views on the application and should be accompanied by any facts or information which support these views. A letter of comment will be taken into consideration in the Board's proceedings. It should be noted, however, that a letter of comment is not sworn evidence and is not subject to cross - examination. Depending on circumstances, it may not be given the same weight as other evidence in the proceedings. Once fled, the letter becomes a public document. The Secretary of the Board provides copies of letters of comment to all parties to the proceeding. An applicant, or any other party, may reply to the letter by serving a Z INFORMATION BULLETIN 2 letter of response on the person who has filed the letter and filing a copy with the Board's Secretary and serving all parties to the proceeding. It should be noted that copies of applications and submissions are provided only to the applicant and intervenors. A person filing a letter of comment should not expect, other than letters of response, any further- correspondence from the other parties involved. Information Requests Any party directly involved in a hearing may request additional information from the other participants, but must do so within the time limits set by the Board in the hearing order. Language The Board operates in both official languages. Applications and submissions may be made in either French or English and the Board will respond in the same language. Intervenors should indicate which official language they intend to use at the hearing so the Board can arrange for simultaneous translation if necessary. The Panel Most hearings are held before a panel of three Board members. They have the same powers as the full Board when considering an application, including the power to decide. Under Section 14 of the NEB Act, the Board may, in cer- tain circumstances, delegate powers to a single member to preside over a hearing. That member renders the final decision. Under Section 15, the Board may authorize a Board member to take evidence and submit a report to the Board. In this case, it is the Board as a whole which approves or denies the application. Board Counsel Board counsel has two main functions. The first is to advise the Board on legal matters, including the conduct of the hearing. The second is to cross - examine the applicant's and intervenors' witnesses in order to establish clearly the evidence needed for the Board to arrive at a decision. Board counsel does not play an adversarial role and does not oppose or support either the applicant or any intervenor. Board counsel is available to assist all parties, especially those not represented by a lawyer. Board Staff The NEB staff works under the direction of the hearing panel to advise panel members on technical matters. Personnel at a hearing may include engineers, geologists, environmentalists, economists or accountants, depending on the nature of the case. Hearing Process Officer The hearing process officer is the court clerk, who is in charge of all physical arrangements for a hearing. He or she receives and records all exhibits, gives the oath to witnesses, schedules simultaneous translation when necessary and generally contributes to the smooth functioning of the hearing. Court Reporters The Board has contracted a private firm to provide verbatim transcripts of all hearings. A transcript of the day's proceedings is usually available later that same day. All testimonies are recorded in the official language in which they were given. Photocopying of transcripts is prohibited, but copies may be purchased from the court reporter. Copies are also kept on file for viewing in the Board's library in Calgary. The Hearing The Board's public hearing process is similar to that of a court. Testimony is provided by witnesses under oath who are subject to cross - examination. Most parties are INFORMATION BULLETIN 2 represented by lawyers, although it is by no means essential. All hearings are open to the public. However, the use of tape recorders or any sound recordings within the hearing room is strictly prohibited. Photographs and video recording (without sound) are allowed, but only with the consent of the presiding Board member, and only for a limited time (usually at the start of the day or after a break). To reduce the hearing time, each party may file its evidence, including the questions for its own witnesses (known as its evidence -in- chief), before the start of the hearing. A pre- hearing conference may also be held to resolve procedural questions and further reduce hearing time. Prior to the hearing, the Board establishes an order by which each participant will be called upon at the hearing. Most public hearings follow a relatively standard procedure. The hearing begins with the presiding Board member making a brief opening statement Next, each participant introduces him or herself, and states who he or she represents. At this time, parties may raise any matters they wish to have considered before evidence is presented. Next, the applicant presents its case. When the evidence -in -chief has already been submitted in writing, each witness for the applicant adopts his or her pre -filed testimony and is then available for cross - examination. Each intervenor is given the chance to question the witness, with final cross - examination usually performed by Board counsel. As in a courtroom, the applicant is given a final opportunity to re- examine its witness. The members of the Board may pose questions at any time. After the applicant has finished presenting its case, the process is repeated for each intervenor who has provided evidence. The applicant leads off the cross - examination of an intervenor's witness, followed by each of the other intervenors, and finally Board counsel. Once again, each intervenor is given the chance to re- examine its own witness after cross - examination is completed. 3 Each party having stated its case, the applicant is given a final chance to introduce any new evidence to rebut that of the intervenors. The final stage of the hearing, known as the argument, allows each party to summarize its position. The applicant presents its argument first and is also given a chance at the end to rebut the other arguments. The presiding Board member then officially closes the hearing. It is possible for arguments to be written rather than oral. A reasonable length of time will be allowed for preparation of written arguments if this method is adopted by the hearing panel. The Decision Although the decision can be rendered immediately following the close of the hearing, most often the Board takes time for deliberation. The outcome is announced in a document called Reasons for Decision. A news release is also issued. Both are published in French and English. Intervenors' Costs In general, parties making representations at a public hearing being conducted by the Board must do so at their own expense. The Board does not have the authority to award costs against an applicant, with one exception under Section 39 of the NEB Act. The exception involves only hearings on the detailed routing of a pipeline. (See Information Bulletin No. I, Pipeline Route Approval Procedures.) When the detailed route is opposed by landowners who are directly or indirectly affected by it, the Board has the authority to award landowners reasonable costs of participating in the 4 INFORMATION BULLETIN 2 hearings. These costs are paid by the company that intends to build the line. Governor -in- Council Approvals Export licences and certificates authorizing construction of pipelines and international power lines require the approval of the Governor in Council. The Board's decision is either approved or rejected by the Governor in Council, but cannot be altered. A denial of an application by the Board is final and is not subject to Govemor -in- Council approval. NEB decisions do not require Govemor-in- Council approval. Reviews of Decisions Under Section 21 of the NEB Act, the Board may review or alter any decision it has made. Interested parties may apply for a review, but only if specific requirements set out in the NEB Rules of Practice and Procedure are met. If a review is warranted, the Board may hold another pub- lic hearing or call for submissions. Once again, any changes to a licence or certificate resulting from a review must be approved by the Governor in Council. Appeals Board decisions may be appealed to the Federal Court of Canada but only on a point of law or jurisdiction. Permission to appeal must be obtained by applying to the Court within thirty days after the Board's decision is made public, unless the Court grants an extension. Federal Court decisions can be appealed, with leave (i.e. prior permission), to the Supreme Court of Canada. APPENDIX I Step —by —step Summary of the Hearing Process The following is a summary of the steps involved in a typical public hearing conducted by the Board. The Preparation for the Hearing I. A company files its application with the Secretary of the Board. The Board issues a news release to announce the filing. 2. Prior to issuing a hearing order, the Board examines the application to determine whether it is sufficiently complete to set a hearing date. The Board may issue letters requesting information to clarify certain points or to obtain further information. (Note: inter- venors are permitted to do likewise after they offi- cially become participants in the proceeding.) 3. When all required information has been received, the Board issues a hearing order. It contains directions on procedure, including a date and location for the hearing. It provides the deadlines for the fling of interventions, letters of comment and evidence by the applicant and intervenors. The order also directs the applicant to publish a notice of hearing in certain specified newspapers and to serve a copy of the application and hearing order on certain parties. In most cases, the order also pro- vides a list of issues to be considered at the hearing. The Board issues a news release simultaneously with the hearing order. 4. Intervenors file their written interventions with the Board and serve them on the applicant by the time limit specified in the hearing order. Intervenors may suggest additional issues to be considered at the hearing. 5. The Board issues a list of all intervenors and their addresses to everyone involved. 6. The applicant serves its application on each intervenor. INFORMATION BULLETIN 2 7. Intervenors serve their interventions on all other parties. 8. The applicant provides the Board and intervenors with copies of its written direct evidence by the time limit specified in the hearing order. 9. Information requests may be made of the applicant by the intervenors, and the applicant must reply. 10. Subsequently, intervenors provide the Board, the applicant, and all other interested parties with copies of their written direct evidence. 1 I. Letters of comment are filed with the Board and served on the applicant. 12. The Board serves the letters of comment on all other parties. 13. Information requests may be made of the intervenors by the applicant and other parties to the proceeding, and the intervenors must reply. 14. Throughout, the Board can issue information requests to the applicant or to the intervenors. The Hearing 15. At the beginning of the hearing, participants obtain a pre- numbered exhibit list and the order of appearances from the hearing process officer. 16. The presiding member of the hearing panel gives an opening statement. 17. The applicant registers its appearance and enters the application, written direct evidence and all supporting documents as exhibits on the record. 18. Intervenors register their appearances, according to the order of appearances established by the Board prior to the hearing, and enter their interventions, written direct evidence and any supporting documents as exhibits on the record, 19. The Board deals with any preliminary matters or motions. 5 EMERA BRUNSWICK PIPELINE COMPANY LTD. NATIONAL ENERGY BOARD BRUNSWICK PIPELINE APPLICATION HEARING ORDER GH -1 -2006 EMERA BRUNSWICK REPLY EVIDENCE OCTOBER 20, 2006 1 EMERA BRUNSWICK PIPELINE COMPANY LTD. 2 GH -1 -2006 3 REPLY EVIDENCE 4 5 1. INTRODUCTION 6 Emera Brunswick has filed, both within the Application, and subsequently through 7 responses to Information Requests, evidence to support its application for approval of 8 the Brunswick Pipeline. Emera Brunswick has consulted widely with the public and with 9 interested stakeholders regarding their concerns and questions in connection with our 10 Application, and respecting gas pipelines generally. Emera Brunswick has addressed 11 the questions and concerns raised, and has tried to provide to the public and to 12 Intervenors assurance that the Brunswick Pipeline is safe, will not harm the environment 13 and will result in a lasting benefit to both the people who live in direct proximity to the 14 Brunswick Pipeline and to the Maritime Canadian provinces generally. 15 Among the Parties to this proceeding, evidence has been filed by government agencies, 16 commercial interests, community groups and private citizens. This Reply Evidence is 17 structured to address the following themes of common interest to certain intervenors 18 while also responding to specific pieces of intervenor evidence, particularly those 19 prepared by their technical consultants: 20 1. Need for the Brunswick Pipeline; 21 22 2. Safety of the Brunswick Pipeline; 23 24 3. Feasibility of a Marine Crossing; 25 26 4. Adequacy of Public Consultation; and 27 28 5. Environmental Issues. 29 30 This Reply Evidence contains the following Attachments: 31 32 Attachment 1: Bald Mountain Ground Vibrations [Jacques Whitford] 33 Attachment 2: Examples of Existing High Pressure Natural Gas 34 Transmission Pipelines in High Density Areas (Binder) 35 [ Emera Brunswick / Bercha Engineering] 36 Attachment 3: Review of Pipeline Incidents Cited by Intervenors [Bercha 37 Engineering] 38 Attachment 4: Resistance to Puncture Pertaining to the Brunswick Pipeline 39 [Kiefner & Associates] 40 Attachment 5: Assessment of Potential for Pressure - Cycle- Induced Fatigue 41 Pertaining to the Brunswick Pipeline 30 -Inch Class 3 Pipe 42 [Kiefner & Associates] Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 2 1 Attachment 6: In -Line Inspection Reassessment Intervals for Brunswick 2 Pipeline Class 3 Pipe [Kiefner & Associates] 3 Attachment 7: Description of Brunswick Pipeline Integrity Management 4 Plan [Emera Brunswick] 5 Attachment 8: Reply to Saint John Fire Department Risk Analysis [Bercha 6 Engineering] 7 Attachment 9: Reply to Appendix 1 of Saint John Fire Department Risk 8 Analysis — "Comments Regarding A Proposed LNG Plant 9 and NG Pipeline in Saint John, N.B." by Sean A. Tracey 10 [Bercha Engineering] 11 Attachment 10: Reply to "An Independent Analysis of the Proposed 12 Brunswick Pipeline Routes in Saint John, New Brunswick" by 13 Richard B. Kuprewicz (Accufacts) [Bercha Engineering] 14 Attachment 11: Reply to "Evaluation of Quantitative Risk Analysis of the 15 Proposed Brunswick Natural Gas Pipeline, by the Bercha 16 Group (Report P2509, February 14, 2006)" by John 17 Wreathall (John Wreathall & Co., Inc.) [Bercha Engineering] 18 Attachment 12: Reply to Intervenor Marine Crossing Evidence [Emera 19 Brunswick] 20 2. NEED FOR THE BRUNSWICK PIPELINE 21 2.1 Intervenor Claims 22 A number of intervenors challenge the Brunswick Pipeline on Canadian public interest 23 grounds. They contend that it offers little or no benefit to Canadians and that it is a 24 "bullet line" to the United States. See, for example: (i) Evidence of Leland Thomas and 25 Janice Eldridge- Thomas (at pp. 3 -4); (ii) Evidence of Patricia Higgins (at p. 9); (iii) 26 Evidence of Tom Inkpen (at pp. 2 -3); (iv) Evidence of Betty Lizotte (at para. 5); (v) 27 Evidence of Joan Pearce (at pp. 1 -5); (vi) Evidence of Horst Sauerteig (at para. 1(a)); 28 and (vii) Evidence of Linda Stoddard (at p. 3). With respect, the evidence contradicts 29 the intervenors' assertions as more fully detailed below. 30 2.2 Emera Brunswick Reply — "Canada Needs the Brunswick Pipeline" 31 Brunswick Pipeline provides access to a critical new source of long -term gas supply 32 much needed in the Canadian Maritime market. In approving the existing Sable project, 33 the Joint Panel emphasized that a primary objective of that project was to provide 34 access to natural gas for the Canadian Maritime market'. Sable reserves and 35 production are declining. Booked reserves have decreased from initial estimates of 36 approximately 3.5 tcf to current estimates of approximately 1.4 tce. Of that amount, ' NEB GH -6 -96 Reasons for Decision, at p. 7. 2 Shell Canada Limited (31.3% owner) 2001 Annual Report, at p. 15 and 2003 Annual Report, at p. 17. Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 3 1 approximately 1 tcf has been produced to date 3. Declining reserves have resulted in 2 Sable producers turning back 257,258 Dth /d of pipeline transportation capacity on the 3 M &NP US system4. These declines in production give rise to serious concerns about 4 supply security. Moreover, they act to seriously discourage further investment in 5 business and residential heating systems, electricity generation plants and other energy 6 infrastructure necessary to bring the benefits of natural gas to as many consumers as 7 possible in the Canadian Maritime market. 8 Recent projects in New Brunswick (Corridor Resources) and the potential re -start of 9 development work offshore Nova Scotia (Deep Panuke) may provide incremental gas 10 supplies. Their combined scale, however, falls well short of assuring the long -term 11 availability of firm supply necessary to support market growth in the region. Nor does it 12 assure that the present market can be supported. The 25 year firm commitment which 13 Repsol Canada has made to the Brunswick Pipeline offers both supply security and 14 investment certainty which will enhance Canadians' access to natural gas supplies. 15 Enbridge Gas New Brunswick (EGNB), Heritage Gas and Nova Scotia Power have all 16 recognized this critical factor5. 17 Homeowners, small businesses and industrial concerns across the length and breadth 18 of Maritime Canada need to know that, notwithstanding the disappointing production 19 experience offshore on the Scotian Shelf, the Brunswick Pipeline will allow them to 20 continue to enjoy safe and reliable natural gas service long into the future. Indeed, the 21 long -term nature of the supplies available by means of the Brunswick Pipeline will 22 provide the confidence necessary for those same kinds of customers to invest in the 23 equipment and pipeline facilities necessary to convert to this clean- burning fuel of 24 choice. As EGNB noted, the Maritime Canadian market remains in its infancy6. 25 Continued significant expansion of the LDC systems operated by EGNB and Heritage 26 Gas can only be assured with a reliable long -term source of gas supply. Moreover the 27 EGNB and Heritage Gas potential customers, particularly large commercial and 28 institutional customers, need to have secure long term gas supply availability in order to 29 select natural gas as their future fuel choice. Capturing these customers is a key 30 element for the successful growth of the Maritime LDC's. Fostering investment 31 confidence is critical to expanding choice for Maritime Canadians amongst the various 32 fuels available. 33 34 For its part, Emera Brunswick has offered Maritime Canadian customers the option of 35 connecting directly to its system. While gas supply can also be accessed by swaps, 36 exchanges and backhauls, the ability to directly access this new gas supply along the 37 entire length of the Brunswick Pipeline affords welcome new options to diversify existing 38 supply. 39 Major new supply projects, however, must rely on large, mature markets to anchor their 40 development. In this case, those markets are located in the northeastern United States. 41 The Maritimes has the opportunity to benefit from its proximity to that market because it ' NEB 2005 Annual Report, Appendix A4 shows approximately 0.8 tcf produced to end of 2004. ` See Emera Brunswick response to NEB IR No. 2.1. 5 See EGNB Evidence; Heritage Gas October 4, 2006 Letter of Comment; and Nova Scotia Power October 13, 2006 Letter. 6 EGNB Evidence, at Q/A 8. Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 4 1 enables access to those supplies. The evidence amply demonstrates that Repsol 2 would not have made the commitment to provide this critical new supply opportunity to 3 Maritime Canada without the direct connection to the large, mature natural gas market 4 available by means of the Maritimes & Northeast LLC system from Calais, Maine, to 5 Boston, Massachusetts. This is similar to the situation faced by the originators of the 6 Sable /M &NP Project, which were only able to bring gas to the region by anchoring the 7 project in the U.S. Northeast market'. 8 Equally, Repsol made clear the sensitivity of its investment decision to any material 9 increase in its transportation costs. Repsol terminated the arrangement previously 10 negotiated with Maritimes & Northeast Pipeline LLP (M &NP LLP) because it failed to 11 reach a tolling arrangement required to ensure the economic feasibility of its 12 considerable upstream investments. Diversion of the pipeline route either through Saint 13 John Harbour or onto the M &NP LLP negates the feasibility of this important new supply 14 opportunity. If a new source of gas supply is to remain available to Maritime Canadians, 15 then the negotiated pipeline service response of Emera Brunswick to Repsol's cross - 16 border pipeline need should be respected. Respect for market choice has featured 17 prominently in the various submissions which lead to the Board's Ruling #6. 18 From a New Brunswick perspective, the Brunswick Pipeline assists the development of 19 the Saint John Energy Hub. Indeed, the Brunswick Pipeline is a critical element of the 20 energy and economic development strategy of both the Province of New Brunswick 21 and the City of Saint John. No major new gas supply source could locate in the Saint 22 John area without a high - pressure gas transmission pipeline being constructed to 23 connect it to its anchor market. As was the case with the Sable /M &NP project, Maritime 24 Canadians will derive substantial advantage by being able to leverage their proximity to 25 the US market, through a direct connection to this new energy source and then by 26 investing in the infrastructure necessary to take advantage of an environmentally 27 friendlier and generally more economic source of fuel. 28 While there are other direct benefits and economic spin offs associated with the 29 Brunswick Pipeline, it is the access to this new, long -term source of gas supply, which is 30 of the greatest strategic benefit to Maritime Canadians. The Board should not take that 31 new supply source for granted. Other projects appear to have foundered on challenges 32 posed by the long distance from their anchor markets. It would be a serious mistake to 33 assume that additional costs or delays can simply be imposed on the Brunswick 34 Pipeline or on its sole long -term shipper, Repsol Canada, without serious adverse 35 consequences. Market windows now open for this development will not remain so 36 indefinitely. 37 3. SAFETY OF THE BRUNSWICK PIPELINE 38 An underground transmission pipeline is by far the safest and most environmentally 39 friendly way to transport large volumes of natural gas. The Brunswick Pipeline is no The importance of the "anchor" U.S. market was recognized by the Sable Joint Panel — "...the Panel recognizes that markets in the U.S. northeast are a prerequisite to the success of the Projects ". NEB GH -6 -96 Reasons for Decision, at p. 7. e Charter for Change — Shawn Graham's Plan for a better New Brunswick (September 2006) at page 16. Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 5 1 exception. 2 3.1 Intervenor Claims 3 A number of intervenors, however, have challenged the safety of the Brunswick Pipeline 4 and natural gas pipelines in general as well as the Bercha Quantitative Risk 5 Assessment. See, for example: (i) Evidence of Dawn Baldwin (at pp. 1 -5); (ii) Evidence 6 of Ivan Court, including attached Saint John Fire Department Risk Analysis; (iii) 7 Evidence of P.B. Court; (iii) Evidence of Leland Thomas and Janice Eldridge- Thomas 8 (at pp. 18 -20) and, attached to their IR response as Appendix F, the Saint John Fire 9 Department Risk Analysis; (iv) Kuprewicz Evidence; (v) Wreathall Evidence; (vi) 10 Evidence of Joan Pearce (at pp. 1 -2; 5 -6); (vii) Evidence of Dan Robichaud; (viii) 11 Evidence of Linda Stoddard; and (ix) Evidence of E. Jean Thompson. With respect, the 12 concerns over the safety of the Brunswick Pipeline generated by such assertions are 13 misplaced. 14 3.2 Emera Brunswick Reply — "The Brunswick Pipeline is Safe" 15 3.2.1 HO-Pressure Gas Pipelines Are Commonplace in Urban and Rural Settinos 16 High - pressure natural gas pipelines are commonplace across North America in both 17 rural and urban areas. Emera Brunswick has assembled several valid examples of the 18 coexistence of high pressure gas transmission lines in urban settings . These 19 examples are as, or more, congested than the situation confronting the Brunswick 20 Pipeline. It is worth observing that high pressure gas transmission lines are already 21 located under the streets around the Board's hearing location in downtown Saint John 22 and have operated without incident since coming into service in 2000. The close 23 proximity of such facilities to schools, churches, hospitals, refineries, residential, 24 commercial and industrial facilities across North America is irreconcilable with the dire 25 consequence assessments offered by Messrs. Kuprewicz, Tracey and Wreathall. 26 The pipeline industry is rigourously regulated and the principal safeguards upon which 27 the public can rely are reflected in the various codes, rules and regulations, which 28 govern the construction and operation of such facilities. The design factors reflected in 29 the Brunswick Pipeline application meet or exceed all such requirements, reflecting 30 Emera Brunswick's conservative approach to pipeline safety. The Board should take 31 considerable comfort with the breadth of experience brought to bear upon this task by 32 the proponent development team. Emera Brunswick has secured the services of St. 33 Clair (1996) Pipelines Ltd. (St. Clair), which has the most extensive pipeline 34 construction and operating experience available in Maritime Canada. Through St. Clair, 35 it has also been able to access the considerable depth of experience of the Duke 36 Energy Gas Transmission staff, which operate natural gas pipeline transmission and 37 gas distribution facilities across Canada and the United States. 38 As Attachment 2 demonstrates, there are many other locations where high - pressure 39 gas pipelines recently have been approved in urban settings. For example, the Ontario s See Attachment 2 - Examples of Existing High Pressure Natural Gas Transmission Pipelines in High Density Areas (Binder) Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 6 1 Energy Board in 2005 authorized the construction of a 48 inch high pressure gas 2 pipeline which extends into the Milton town limits. The OEB actually issued a decision 3 "from the bench" in order to expedite the construction of this pipeline extension, which 4 was principally supported by demand from United States' local distribution companies10. 5 Similarly, the National Energy Board recently approved, without an oral public hearing, 6 the construction of high pressure gas transmission facilities located, in part, in an urban 7 setting near Stittsville, (Ottawa) Ontario11. 8 3.2.2 Pipeline Design Parameters and Maintenance Programs Ensure Safety 9 Modern pipeline design, advances in metallurgy, improvements in maintenance 10 procedures and pipeline integrity programs have continued to ensure public safety and 11 reliable service. With respect to the Brunswick Pipeline, the evidence shows: 12 0 The grades of steel and the pipeline thickness proposed for the Brunswick 13 Pipeline are highly resistant to third party damage. NEB standards for 14 pipeline wall thickness are exceeded through much of the urban route. 15 The risk of a third party event puncturing the urban pipeline is remote 12; 16 The risk of pressure cycle induced fatigue crack growth is remote 13, 17 0 In -Line inspection intervals are calculated to prevent failure due to 18 corrosion 14; and 19 0 Operational hazards or threats will be managed through Brunswick 20 Pipeline's thorough integrity management plan (IMP)15. 21 In addition, the 100m dimension of the proposed corridor within Saint John was 22 designed to permit the final location of the pipeline to be adjusted to minimize the 23 impact upon local surroundings. This is why Emera Brunswick believes strongly that 24 the preferred corridor along the electric transmission ROW through Rockwood Park 25 should be approved rather than either the north or south variants. Close coordination 26 with local officials is critical to ensure impact upon local utilities and public infrastructure 27 is minimized. Emera Brunswick continues to meet with those officials for that purpose. 28 3.2.3 Emergency Response Plans Ensure Proper First Responder Procedures 29 While pipeline incidents with the potential to impact public safety are highly unlikely, it is 30 critical to have well rehearsed emergency response plans. These emergency response 31 plans are typically developed after the Certificate is issued. The Brunswick Pipeline 32 ERP will be modeled upon the ERP for the existing M &NP Canada facilities, which 33 include the high pressure transmission lateral extending into downtown Saint John16. 34 An outline of the ERP was provided in response to Sauerteig IR No. 1.14. These plans 10 OEB Order EB- 2005 -0201 dated July 6, 2005; June 28, 2005 Transcript, Vol. 2, at p. 75 and following. 11 42 ", 6895 kPa — Order XG- T001 -01 -2006. 12 See Attachment 4 - Resistance to Puncture Pertaining to the Brunswick Pipeline. 13 See Attachment 5 - Assessment of Potential for Pressure - Cycle- Induced Fatigue Pertaining to the MBNE 30 -Inch Class 3 Pipe. ` See Attachment 6 - In -Line Inspection Reassessment Intervals for Brunswick Pipeline Class 3 Pipe. 16 See Attachment 7 - Description of Brunswick Pipeline Integrity Management Plan. 16 See Emera Brunswick response to NEB IR No. 2.9(d) and 2.11. Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 7 1 will ensure proper coordination with the City's first responder services, including those of 2 the fire department. 3 Emera Brunswick has been engaged in detailed discussions with those local officials to 4 enhance the collective understanding of how such facilities operate and how best to 5 respond to emergency conditions. Section 3.2.4 of this Reply Evidence details certain 6 commitments already made in that regard. These arrangements will build upon M &NP's 7 own operating experience in the Maritimes and in the Saint John area, in particular, as 8 well as emergency response procedures employed elsewhere in Canada and the 9 United States where the Duke Energy Group of companies operate. 10 3.2.4 Reply to Saint John Fire Department (SJFD) Risk Analysis 11 Recently, the SJFD conducted a Risk Analysis related to the Brunswick Pipeline. The 12 report was filed with Saint John Common Council, and a copy placed on the record in 13 this proceeding by two intervenors, though not by the City of Saint John. Since the 14 preparation of his report, Emera Brunswick has had several discussions with the Fire 15 Chief and his colleagues, including Mr. Sean Tracey, who conducted a risk analysis of 16 the Brunswick Pipeline (see Section 3.2.5 below). While Emera Brunswick disagrees 17 with portions of the report and believes unnecessary public concern has been 18 generated, we are working cooperatively with the Fire Chief to address his concerns. 19 One outcome of those discussions is contained in the Commitments referred to below, 20 which address all of the recommendations made in the report relating to the Brunswick 21 Pipeline. 22 The SJFD Risk Analysis noted a concern with blasting at Bald Hill. Emera Brunswick 23 retained Jacques Whitford to assess ground vibrations at Bald Mountain Quarry. A 24 copy of Jacques Whitford's findings appears in Attachment 1. Based on the distance 25 between the pipe and the blasting activities as well as the data that exists, these 26 blasting activities are not considered to be within a threshold of concern for the 27 Brunswick Pipeline. 28 Attachment 8 contains Emera Brunswick's general reply to the SJFD Risk Analysis. 29 Emera Brunswick has addressed all of the recommendations from the SJFD Risk 30 Analysis pertaining to Emera Brunswick (at Section XIII, pp. 65 -66) as described below: 31 1. Emera Brunswick welcomes the opportunity and is committed to working with the 32 SJFD, the Saint John EMO and other City representatives with the objective of 33 resolving the infrastructure concerns identified. Emera Brunswick commits to, in 34 consultation with City officials, special design solutions for the proposed pipeline 35 where critical City of Saint John or third party infrastructure is in close proximity 36 to the final pipeline location within the Brunswick Pipeline proposed corridor. 37 These solutions could include added pipeline burial depth, increased separation 38 distances and other pipeline or infrastructure protection measures. These will be 39 in accordance with good engineering practice, national engineering design codes 40 and NEB regulations. Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 8 1 2 2. Emera Brunswick will, at its expense and on an ongoing basis, engage SJFD 3 staff in training for emergency response for natural gas transmission pipeline 4 incidents. 5 6 3. Emera Brunswick will provide and pay for Command Staff - Incident Command 7 Training for natural gas emergencies. 8 9 4. Recommendation 4 was based on a misunderstanding by the SJFD regarding 10 the probability of true explosions (detonations). A true explosion requires a 11 critical mass of flammable gas, a hard ignition source, and containment. As 12 portrayed in the event tree in Figure 5.7 of the Bercha QRA, such a set of 13 conditions is not expected to occur in 98% of cases given occurrence of a 14 rupture. And, in fact, from an inspection of the proposed corridor, no locations 15 where this could happen were identified. On the basis of our discussions, we 16 understand that the SJFD now understands this point and has withdrawn this 17 recommendation. 18 19 5. Emera Brunswick will engage SJFD and other first responders in southern New 20 Brunswick in the development and finalization of an Emergency Response Plan. 21 This plan will be compliant with regulatory requirements and achieve the 22 concurrence of the SJFD. Emera Brunswick emergency planning, first responder 23 training and public education will be subject to NEB requirements under the 24 Onshore Pipeline Regulations, 1999 (OPR99) and CSA Z731. As a component 25 of emergency planning, the Emergency Response Plan must also be subject to 26 these regulations, which are consistent with all relevant aspects of NFPA 1600. 27 NFPA includes responsibilities for both private and public entities including 28 protection of critical infrastructure. This Standard outlines duties and 29 responsibilities for not just a private entity such as the Brunswick Pipeline but 30 also for first responders, local government, emergency management 31 organizations etc. As such, the Brunswick Pipeline ERP will comply with those 32 aspects of the Standard which are relevant to a private infrastructure entity such 33 as Brunswick Pipeline. 34 35 6. 0 Emera Brunswick commits to initiating a series of exercises to build 36 response capability within the first year of operation. 37 38 0 Emera Brunswick will fund staff of the SJFD to attend the Natural 39 Gas /LNG /LP Firefighting and Safety Training School offered by the 40 Northeast Gas Association in Massachusetts. 41 42 0 Emera Brunswick will fund the re- instatement of a Training Officer position 43 within the SJFD to the level of $25,000 annually. 44 Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence October 20, 2006 Page 9 1 Emera Brunswick will fund EMO planning costs in the amount of $50,000 2 on a one -time basis. This would support the integration of the Brunswick 3 Pipeline in Saint John emergency planning. 4 5 Emera Brunswick commits to systematically sharing with the City, results 6 of operation, maintenance and integrity management system audits 7 conducted by the NEB, subject to NEB concurrence. 8 9 7. Emera Brunswick commits to adding Mercaptan to the natural gas entering .the 10 Brunswick Pipeline so as to provide citizens an olfactory warning if a gas release 11 occurs. 12 13 8. Emera Brunswick commits to the following protocol with respect to Line 14 Block Valves located along the Saint John urban portion of the Brunswick 15 Pipeline. If a rapid pressure drop is detected through the SCADA 16 monitoring system by Houston Gas Control such that the Gas Controller is 17 able to determine that a serious pipeline incident has occurred, the Gas 18 Controller will initiate remote closure of the appropriate Line Block Valves. 19 Initiation of valve closure in this situation will not require prior field 20 confirmation. 21 22 The Brunswick Pipeline Field Emergency Response Plan will include as a 23 Standard Guideline a Valve Closure Decision Tree. This Valve Closure 24 Decision Tree will serve as an Operating Protocol which will address the 25 closure of Line Block Valves. 26 27 Emera Brunswick is examining the request to place an additional line 28 blocking valve in the City. 29 30 3.2.5 Reply to Appendix 1 of Saint John Fire Department Risk Assessment — 31 "Comments Regarding A Proposed LNG Plant and NG Pipeline in Saint John, 32 N.B." by Sean A. Tracey 33 Attachment 9 contains Emera Brunswick's reply to the comments of Mr. Tracey. 34 3.2.6 Reply to "An Independent Analysis of the Proposed Brunswick Pipeline Routes in 35 Saint John, New Brunswick" by Richard B. Kuprewicz (Accufacts) 36 Attachment 10 contains Emera Brunswick's reply to the evidence of Mr. Kuprewicz. 37 3.2.7 Reply to "Evaluation of Quantitative Risk Analysis of the Proposed Brunswick 38 Natural Gas Pipeline, by the Bercha Group (Report P2509 February 14, 2006)" 39 by John Wreathall (John Wreathall & Co., Inc.) 40 Attachment 11 contains Emera Brunswick's reply to the evidence of Mr. Wreathall. Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence 3.2.8 Safety Summary October 20, 2006 Page 10 2 An underground transmission pipeline is by far the safest and most environmentally 3 friendly way to transport large volumes of natural gas. The Brunswick Pipeline is no 4 exception. Inaccurate information, however, has been disseminated about the safety of 5 modern pipeline systems. Unfounded public concern has been the result. There has 6 never been a public fatality due to an incident respecting an NEB regulated pipeline and 7 only one worker fatality, which was over 20 years ago17. 8 With respect to public concern, there has been a lack of balance in the excessive focus 9 on potential consequences, ignoring the extensive measures employed to minimize the 10 risk of their occurrence. 11 Every day, in household use there are materials, devices, or equipment, which could 12 conceivably result in serious harm to their users. Furnaces, stoves, barbeques and 13 electrical appliances, are examples. The public, however, has become comfortable with 14 their use as they are all designed to comply with codes, which ensure their safe and 15 reliable operation. Should a household or apartment furnace explode at night, for 16 example, the consequences could be dire for the inhabitants and possibly others 17 located nearby. The likelihood of that occurring, however, is so remote that it is a risk 18 readily accepted by people across the continent. 19 It is the provision of codes and regulations, which operate to give the public confidence 20 in the safety of pipeline systems. These safety standards, upon which the public relies, 21 have evolved over the years, based on extensive study, sound engineering practices 22 and experience designed to ensure public safety. 23 The fact that high - pressure gas pipelines are located in urban settings across North 24 America is testament to the effectiveness of these codes, regulations and operating 25 procedures. As noted in Attachment 2, for example there are in excess of 560 km of 26 high - pressure pipelines within the City of Edmonton — another Energy Hub — where the 27 City's normal setback distance for buildings from these pipelines is only 15 metres. 28 Moreover, the fact that neither insurers nor property appraisal experts suggest any 29 safety issue exists with respect to the proximity of high pressure gas pipelines to 30 residences is evidence which indicates that these types of pipelines are safe18. 31 Pipeline construction and maintenance practices are constantly reviewed and monitored 32 for improvements. This accounts for the superior safety record of the kinds of facilities 33 Emera Brunswick proposes to install relative to others involved in the incidents cited by 34 intervenors. Emera Brunswick notes, in particular, that none of the intervenors or their 35 technical consultants have provided a risk analysis which specifically considers the 36 actual design parameters and integrity maintenance programs which Emera Brunswick 37 proposes to use. The Board is familiar with the fact that high - pressure pipelines are 38 safe for operation in urban areas. The higher grades of steel together with the thicker 39 wall pipe that will be used in built -up areas as proposed in this Application (design t7 See Attachment 8, at p. 3. B See Emera Brunswick response to NEB IR No. 34.; Baldwin Evidence, at p. 6, para. 111; Leland Thomas Response to Emera Brunswick IR No. 1, at para. 4.1. Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 11 1 parameters exceed code requirements in many areas) operate to give the Brunswick 2 Pipeline a safety factor greater than that required by the applicable Codes. The Kiefner 3 & Associates analyses, which appear as Attachments 4, 5 and 6, provide a detailed 4 explanation of pipe toughness and resistance to third party damage to virtually any 5 piece of excavation equipment likely to operate along the pipeline route within the City 6 ( Kiefner & Associates conclude that over 99.5 percent of the population of excavators 7 are below the size capable of puncturing the Class 3 wall thickness of the Brunswick 8 Pipeline). 9 For pipeline safety purposes, therefore, the citizens of Saint John will enjoy the same 10 protections as all other urban residents across Canada. Indeed, they already do as the 11 high - pressure Saint John Lateral located within the City's downtown core attests. For 12 the reasons stated above, the infrastructure necessary to establish Saint John as one of 13 North America's principal Energy Hubs will operate safely and will provide reliable 14 service for many years into the future. 15 4. FEASIBILITY OF A MARINE CROSSING 16 4.1 Intervenors' Claims 17 A number of intervenors suggest a preference for a marine route through the Saint John 18 Harbour as opposed to the on -land preferred pipeline corridor. See, for example: (i) 19 Kuprewicz Evidence; (ii) Affidavit of David Thompson; (iii) Evidence of Betty Lizotte (at 20 para. 3); and (iv) Evidence of Horst Sauerteig. 21 4.2 Emera Brunswick Reply — "A Marine Crossing is Not Feasible" 22 Attachment 12 contains a technical reply to the evidence of Horst Sauerteig and the 23 evidence contained in the Accufacts Report. 24 The marine crossing was an option considered to transport the Repsol Canada volumes 25 from Mispec Point to the border. A decision not to pursue the marine crossing was 26 made at an early stage in the corridor selection process. Despite the fact it might 27 technically have been constructible, the cumulative effect of the many safety, schedule, 28 cost, environmental and technical challenges made it a non - starter. The marine 29 crossing, in fact, continued to be looked at as the project developed, from the 30 perspective of both the pipeline owner and the shipper, but the same challenges 31 remained confirming the prudence of the initial decision. Updated information on costs, 32 schedule and the like only confirm that decision. Emera Brunswick, supported by its 33 sole shipper Repsol Canada, will not build the pipeline across Saint John Harbour. 34 In its analysis, the proponent had the benefit of the extensive experience of the Duke 35 Energy Gas Transmission staff and their consultants (including Project Consulting 36 Services, Inc., AK Energy Services, and Jacques Whitford). Their operating experience 37 in North America and internationally should provide the Board with considerable comfort 38 as to their cost estimates and their feasibility assessments. Emera Brunswick questions Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 12 1 whether the intervenor witnesses suggesting a marine crossing have sufficient 2 experience with the realities of the present market for marine pipeline installation. 3 The evidence of intervenors suggesting a marine crossing appears to assume that the 4 pipeline and its shipper face no cost or scheduling constraints. This is an incorrect 5 assumption. The success of the CanaportTm LNG Terminal is very dependent upon the 6 commercial arrangements between Repsol Canada and Emera Brunswick, and 7 achieving a timely in- service date in accordance with the current land route construction 8 schedule for completion of the Brunswick Pipeline. As the evidence discloses, a 9 conclusion was reached early on that the implications of a marine crossing in this case, 10 including the likely costs and scheduling delays associated therewith, were intolerable. 11 As a result, the detailed engineering and environmental studies with respect to a marine 12 crossing were not undertaken. 13 In a competitive marketplace, certainty of costs and timing are both crucial 14 considerations. As noted in Attachment 12, the costs associated with such a crossing 15 would be significantly in excess of those for the onshore preferred corridor. Beyond the 16 higher cost estimate is a greater risk of significant cost overrun. The scheduling 17 challenges and risks of considerable delay associated with a marine crossing were also 18 not consistent with the project's key objectives. This is not an imaginary concern, as 19 Emera Brunswick's consultants with world -wide experience in the current market 20 environment have attested. 21 The incremental hazards associated with a marine crossing in this case compared to an 22 on -land route are described in the Project Consulting Services, Inc. - Feasibility Study of 23 a Proposed Crossing of the outer Saint John Harbour (Appendix 3 to the Application) 24 and the AK Energy Services Feasibility Assessment of Horizontal Directional Drills 25 (Appendix 4 to the Application). Each of the authors of these reports recommends an 26 on -land route be considered in order to avoid significant risk factors associated with a 27 marine crossing. The Jacques Whitford Environmental Assessment (Appendix 12 to the 28 Application) also noted potential environmental effects related to a marine crossing. It is 29 important to recognize that a marine crossing, in this case, involves installing a 30 inch 30 pipeline of 8.8 km in length under the Saint John Harbour, where the impact of tides 31 materially exceeds the tide impacts in other undersea locations. 32 The incremental hazards associated with a marine crossing include the following: 33 1. Construction risks - Construction risks associated with a marine crossing are 34 greater than those associated with an on -land route. The greater construction 35 risks include the potential inability to bury the pipeline by plowing or jetting 36 methods, the high current and large tidal changes in the areas of the marine 37 crossing that could damage the pipeline or its protective coating while being 38 installed on the sea floor, and the possibility that a HDD cannot be installed at 39 the shoreline, thereby requiring an open cut approach. In addition, harsh 40 weather, storm and /or fog would have a materially adverse impact on the 41 construction schedule and present a completion risk. Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence October 20, 2006 Page 13 1 2. Safety risks - Safety risks associated with a marine crossing are greater than 2 those associated with an on -land route. For example, the high currents and low 3 visibility in the Saint John Harbour represent significant risks for divers engaged 4 to install and /or maintain the pipeline. The high currents can push the pipe into 5 the divers and can sweep a diver off the bottom or make the diver's ascent to the 6 surface too rapid, exposing the divers to materially adverse health 7 consequences, including worker fatalities. Protective cover over the gas pipeline 8 can be eroded rapidly over time by the high currents which may wash it away, 9 exposing the pipeline to damage. The presence of the pipeline lay barges in the 10 harbour could create issues for the other normal traffic in the harbour. In certain 11 weather conditions, safety would be threatened to all present in the harbour. 12 Because weather conditions change often and abruptly in the Bay, the 13 abruptness thereby not allowing sufficient time for crews to prepare, work crews 14 could often find themselves working in unsafe conditions. These safety risks are 15 not acceptable. 16 3. Environmental risks - As noted in the Jacques Whitford Environmental 17 Assessment, the potential environmental effects related to a marine crossing 18 could include, but may not be limited to, the following: 19 (i) change in accessibility to the fishery; 20 (ii) harmful alteration, disruption or destruction of marine fish habitat resulting 21 from the harbour excavation, as well as anchor drops and cable sweeps 22 during construction; 23 (iii) direct mortality of marine fish, including commercially fished species; 24 (iv) potential interaction and disturbance of contaminated sediments; and 25 (v) loss of salt marsh or other environmentally sensitive marine shore habitat. 26 4. Schedule risks — The risk of delays to the project when completing marine 27 construction in winter months is very high. Potential delays would be a result of 28 tidal conditions, sea condition, wind, snow and fog. Divers would only be able to 29 work for four hours per day, due to the tidal and current conditions existing in the 30 harbour, which will negatively impact the schedule. Likewise, the likelihood of 31 failure of any of the HDDs would materially impact the schedule and could 32 potentially result in failure of the marine crossing. 33 5. Cost risks — The cost of a pipeline constructed on the marine route would be 34 unacceptably higher than the on -land option. Also, the potential for significant 35 cost increases on a marine pipeline are greater than an on land pipeline. If 36 problems occur due to schedule delays, inability to get proper burial depth, 37 vessel positioning problems, etc., all will result in increased costs. 38 Additional issues related to a marine crossing are: 39 1. Pipeline Operation risks - On -going maintenance to an undersea pipeline, 40 including repairs, if required, would be subject to the same construction and Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence October 20, 2006 Page 14 1 safety risks associated with its installation. In addition, reliability concerns exist 2 for the marine option due to the potential for damage due to marine traffic and 3 general inaccessibility for repair. The time needed to remedy an interruption of 4 supply caused by a problem with an undersea pipeline is likely to materially 5 exceed the time needed to remedy a problem with an on -land pipeline. Because 6 of the frequency of tides and strong currents, divers can probably work only four 7 hours per day. In addition, harbour activities can significantly reduce the time 8 available for underwater construction and maintenance. 9 2. Commercial risks - The commercial implications of a marine crossing in this 10 case, including the cost increases and scheduling delays associated therewith, 11 as detailed in Attachment 12, are intolerable. In addition, gas buyers are unlikely 12 to accept supply interruptions associated with the marine segment of the pipeline 13 as an incident of force majeure. This creates intolerable contracting risks for the 14 gas sellers. 15 The construction and operation of the on -shore pipeline in the preferred corridor 16 described in the Application is environmentally acceptable, economical, safe and 17 efficient as experience across North America has demonstrated over the years. 18 Both Emera Brunswick and Repsol Canada have concluded that a marine crossing is 19 not feasible. The Brunswick Pipeline will not be built across Saint John Harbour. The 20 benefits of the new supply source will not be realized without approval for an on -land 21 pipeline route. The government's ambitions to build upon Saint John's reputation as a 22 North American energy hub would be frustrated and Maritime Canada's developing gas 23 markets would lose a critically needed new supply option to offset the declining 24 production from the offshore and Scotia shelf areas19. 25 5. ADEQUACY OF PUBLIC CONSULTATION 26 5.1 Intervenors' Claims 27 Public consultation and responding to the feedback from stakeholders is important to 28 Emera Brunswick. A few intervenors, however, have challenged the adequacy of the 29 project's public consultation. See: (i) Evidence of D. Gallant; and (ii) Evidence of Tom 30 Inkpen. 31 5.2 Emera Brunswick Reply — "The Project's Public Consultation is 32 Appropriate" 33 5.2.1 General Consultation Activities 34 Emera Brunswick rejects the suggestion that its consultation activities have been 35 inadequate. While some of the intervenors may not agree with the outcome, the 36 development of this Project has featured an open, interactive consultation process 37 which has resulted in changes to the proposed corridors, the introduction of specialized 19 Charter for Change — Shawn Graham's Plan for a better New Brunswick (September 2006) at page 16. Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 15 1 construction techniques and the dissemination of a good deal of information about the 2 construction and operation of pipelines in both urban and rural environments. 3 Initial contacts and personal visits were conducted by Emera Brunswick lands 4 representatives with landowners impacted by the pipeline corridor. Other consultation 5 activities included: 6 0 public open houses; 7 0 community meetings; 8 0 direct stakeholder meetings; 9 0 community newsletters; 10 0 a series of project articles were run in the Saint John newspaper; 11 0 establishing a project website; 12 0 publishing a toll free number for project inquiries; and 13 0 extensive media coverage pertaining to the project and establishing a 14 Lands office in the City of Saint John over a year ago. 15 16 The above activities were all conducted in an effort to consult with area residents who 17 are directly affected by the proposed pipeline route or others who wished to have 18 information about the Project. Emera Brunswick has considered feedback from 19 stakeholders and has amended its application to reflect minor amendments to the 20 preferred corridor20. 21 Emera Brunswick. remains committed to its ongoing consultation program. Should it 22 become apparent that its proposals can be improved, it is quite prepared in an open and 23 cooperative manner to make the appropriate changes, subject to the Board's approval. 24 5.2.2 Rockwood Park 25 The Project has responded to concerns about the preferred route located along the 26 existing electric transmission line within Rockwood Park by proposing alternatives which 27 avoid the Park. Emera Brunswick believes both the north and south variants are inferior 28 to the preferred corridor but is nevertheless prepared to pursue either should the Board 29 determine that the pipeline should not be routed through the Park. 30 Consultation with the Horticultural Society and the City, which together have 31 responsibility for Rockwood Park, has resulted in the proposal of specialized 32 construction plans and improvements within the Park which will enhance public access 33 and enjoyment in the future. Further, Emera Brunswick is prepared to endow 34 Rockwood Park with a grant to fund Park improvements and future Park operations, 35 should the preferred corridor be accepted and the pipeline built. 21 See Emera Brunswick response to Janice Eldridge- Thomas IR No. 2.9 Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 16 1 Despite the issues which may exist with the Friends of Rockwood Park and their 2 supporters, Emera Brunswick has acted openly and in good faith as one would expect 3 of any company seeking to become a good corporate citizen in the community. There 4 can be no doubt that people along the route of the pipeline are aware of its development 5 and that their understanding of the realities of its construction and operation is 6 improving. Unfortunately, much misinformation has circulated. The balance of the 7 hearing process, hopefully, will add to a better understanding of the project. 8 5.2.3 Aboriginal 9 With respect to aboriginal consultation, in its early stages the project engaged in 10 consultations directed at securing aboriginal support for and involvement in various 11 project activities. Careful attention has also been paid to mitigating impacts upon 12 traditional uses along the pipeline route. That process was open and inclusive. Emera 13 Brunswick is pleased that those consultations have resulted in Agreements with the 14 Province's two aboriginal organizations, both of whom have now indicated their support 15 for the timely approval of the project. 16 In evidence submitted by the Union of New Brunswick Indians (UNBI) in a letter dated 17 September 20, 2006 to the NEB, the UNBI states that " the proposed route goes 18 through a burial ground known to us by oral tradition." Emera Brunswick will continue to 19 consult with the UNBI regarding the burial ground and will work with the UNBI to 20 thoroughly review and assess the area referred to as a burial ground. 21 6. ENVIRONMENTAL ISSUES 22 The project's Environmental and Socio- Economic Assessment ( "EA") has been 23 comprehensive and detailed. In Emera Brunswick's view, the EA's conclusion that the 24 project is not likely to cause significant adverse environmental effects remains valid in 25 consideration of the evidence submitted by various intervenors. The mitigation 26 techniques and monitoring programs that Emera Brunswick is committed to implement 27 as part of the project are fully detailed in the project documentation and have been 28 adopted by the Company as construction and operating protocols. 29 One issue which has attracted particular attention is the HDD crossing of the Saint John 30 River. As the Board is well aware, there will be short-term noise impacts associated 31 with the directional drill. Clearly, the HDD crossing is preferable to an open cut 32 crossing. Emera Brunswick will employ various construction and noise attenuating 33 techniques to minimize the effects of HDD related noise on nearby residents. As stated 34 in the EA, Emera Brunswick will implement a noise monitoring program associated with 35 the HDD and will have a program in place whereby residents can contact Company 36 representatives concerning noise related complaints. It is no more possible, however, 37 to eliminate pipeline construction - related noise altogether than it is when engaged in the 38 many other forms of construction which have taken place in the City over the years. 39 Emera Brunswick also notes the Pembina Institute analysis on greenhouse gas 40 emissions. Simply put, there are no greenhouse emissions of significance from the Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 17 1 construction and operation of the Brunswick Pipeline. The Company will employ 2 various techniques and practices during construction and operation of the pipeline to 3 minimize the release of greenhouse gas emissions. Any added or cumulative 4 environmental effect, therefore, is negligible. In addition, to the extent that customers in 5 Canada or the United States use natural gas from the Brunswick pipeline to displace 6 more carbon intensive fossil fuels, the resultant emissions of greenhouse gases may be 7 reduced. 8 7. OTHER ISSUES 9 The balance of this Reply Evidence addresses other issues raised by intervenors or 10 their technical consultants. 11 7.1 Access to the Brunswick Pipeline 12 7.1.1 Intervenors' Claims 13 In its evidence, EGNB sought further clarity over the terms that would apply to EGNB in 14 accessing the Brunswick Pipeline. 15 7.1.2 Emera Brunswick Reply — "EGNB and Others Will Have Access to the Brunswick 16 Pipeline" 17 Emera Brunswick can confirm that it is willing to allow EGNB to design, permit, 18 construct, own, operate and maintain an interconnecting custody transfer station(s), 19 which includes a meter and associated facilities, with the Brunswick Pipeline, provided 20 the custody transfer station(s) are for EGNB's use in their franchise area. This 21 confirmation is subject to: (i) EGNB acting in accordance with all applicable codes and 22 standards; (ii) EGNB designing the stations and providing all necessary operational and 23 metering information required by Emera Brunswick in order for Emera Brunswick to 24 properly measure and manage gas transported off the Brunswick Pipeline to EGNB; (iii) 25 EGNB coordinating the permitting, planning, and construction activities with Emera 26 Brunswick; (iv) EGNB providing Emera Brunswick with any operational and 27 maintenance procedures or protocols that Emera Brunswick deems necessary; (v) 28 EGNB providing Emera Brunswick with all necessary information required in order for 29 Emera Brunswick to receive any permits or approval for any facilities required by Emera 30 Brunswick to connect to the EGNB stations; and (vi) EGNB being responsible for all 31 costs incurred to permit, construct, operate and maintain the custody transfer stations. 32 33 Emera Brunswick can also confirm that it will not require EGNB to provide proof of gas 34 supply under the circumstance where EGNB is permitting, constructing, owning, 35 operating and maintaining these interconnecting custody transfer stations with the 36 Brunswick Pipeline. 37 38 Emera Brunswick can further confirm that it will, within four months of receipt of a 39 certificate pursuant to its Application, develop in consultation with EGNB, appropriate 40 terms and conditions related to pipeline operational matters which may include: services Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 18 1 and corresponding tolls, requirements for balancing and nomination, as well as a 2 procedure for third parties to make reservations for capacity on the Brunswick Pipeline. 3 EGNB will be given an opportunity to provide input into and, if Emera Brunswick and 4 EGNB are unable to resolve any issues, EGNB may refer the matter to the Board for 5 resolution. 6 7 With the above confirmations, Emera Brunswick understands that EGNB supports the 8 Brunswick Pipeline application as it pertains to services and interconnections provided 9 by Emera Brunswick on the proposed system, as detailed in the Application. Emera 10 Brunswick understands that: (i) in the future EGNB still has the right to bring issues 11 related to Brunswick Pipeline services to the NEB, should the parties fail to reach 12 satisfactory arrangements; and (ii) EGNB retains the right to deal with gas supply 13 concerns in this or any other related proceedings. 14 15 In light of the above, there is no need to prescribe tolls or services for third parties in this 16 proceeding. Should a complaint arise, as with any Group 2 pipeline, the Board would 17 be called upon to adjudicate the toll and the terms and conditions of access, as the case 18 may be. 19 20 7.2 Prooertv Values 21 7.2.1 Intervenors' Claims 22 A few intervenors suggest the Brunswick Pipeline will have an adverse effect on 23 property values. See: (i) Evidence of Leland Leland Thomas and Janice Eldridge - 24 Thomas (at para. 5.5); (ii) Evidence of D. Gallant; (iii) Evidence of Rob Moir; and (iv) 25 Evidence of E. Jean Thompson. 26 7.2.2 Emera Brunswick Reoly — "Pipelines Do Not Devalue Property" 27 In response to NEB IR No. 3.4, Emera Brunswick has filed a report by Mr. David 28 Babineau, AACI, P. App., of de Stecher Appraisals Ltd., Saint John, New Brunswick. 29 The report is a thorough study on property valuation near existing and proposed high 30 pressure natural gas pipelines in the Maritimes. Mr. Babineau concluded that: 31 "...after conducting a review of available literature, interviewing 32 knowledgeable appraisers, analyzing relevant market data and 33 investigating the availability of insurance, it is concluded that there is no 34 evidence to suggest that the presence of a natural gas pipeline has any 35 impact on the market value of residential property located in close 36 proximity to a pipeline." 37 A comprehensive 2001 "Natural Gas Pipeline Impact Study" prepared for the Interstate 38 Natural Gas Association of America Foundation reached a similar conclusion: 39 "... It was determined that there is no significant impact on the sales price 40 of properties located along natural gas pipelines in the areas of study. It Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence October 20, 2006 Page 19 1 was further determined that neither the size of a pipeline (diameter) nor 2 the product carried by a pipeline has any significant impact on sales price. 3 It was also concluded that there is no discernable impact on demand for 4 properties located along natural gas pipelines in the locations studied. 5 Furthermore, the existence of a pipeline did not impede development of 6 the surrounding properties in any location researched. 7 The results of the case studies also revealed that the existence of a 8 pipeline has no significant impact on development decisions such as lot 9 size or type of improvement constructed. Furthermore, the presence of a 10 pipeline did not impact any specific property type more or less severely 11 than other property types in the areas studied. 12 Finally, it was concluded that it is very likely the results and conclusions of 13 this study are transferable to other market situations involving natural gas 14 pipelines in other regions of the country. , 21 15 7.3 Anadarko Evidence 16 7.3.1 Intervenor's Claims 17 Anadarko has filed evidence opposing the Application. 18 7.3.2 Emera Brunswick's Reply — "Anadarko Evidence Is Not Relevant' 19 20 21 22 23 24 25 26 27 28 29 30 31 32. 33 34 35 36 In Ruling #6, the Board concluded that the requested further detailed analysis of Repsol's potential use of a different pipeline system (M &NP LLP) was of insufficient probative value to the present application. Anadarko's line of inquiry had been directed at determining "... the outcome of commercial arrangements that are neither in place nor are expected to be in place in the foreseeable future, ... ". Accordingly, the requested evidence was determined to be neither significant, relevant nor reasonable in the context of the present proceeding. The evidence submitted by Bear Head LNG Corporation, Anadarko Canada LNG Marketing Corp. and Anadarko LNG Marketing LLC (the "Anadarko Corporations ") does not ask the Board to reject the Application. Rather, on an assumption that the Board approves the Application, the Anadarko Corporations ask the Board to confirm that Anadarko qualifies for a special toll on the M &NP transmission system22. This request is beyond the scope of matters in issue in this proceeding. The written evidence of Peter J. Milne filed on behalf of the Anadarko Corporations (which has not been revised as a result of Ruling #6), is incompatible with the evidence of his clients seeking confirmation of eligibility for a special toll on the M &NP system. 2' Natural Gas Pipeline Impact Study, prepared for the Interstate Natural Gas Association of America Foundation, March 30, 2001. 22 Anadarko Evidence, at p. 8. 1 2 3 4 5 6 7 8 9 Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence October 20, 2006 Page 20 Instead, Mr. Milne recommends that the Board deny the Application with directives that would force both Repsol and M &NP to contract for service on M &NP23. Mr. Milne's evidence is neither relevant nor probative to the Brunswick Pipeline application since, as the Board found, such commercial arrangements between those parties neither exist nor will they exist in the future. Accordingly, Emera Brunswick has refrained from embarking upon a detailed rebuttal of the Anadarko evidence and the errors in its analysis since the commercial arrangements it seeks to compel are neither relevant nor are they probative with respect to matters in issue in this proceeding. 23 Anadarko Milne Evidence, at p. 21. Emera Brunswick Pipeline Company Ltd. GH-1-2006 Reply Evidence Attachment 1 1 61 P_ P, vn jacqmn 1F, MMISITIMION 14 ATTACHMENT 1 BALD MOUNTAIN GROUND VIBRATIONS Conaber 13,2006 ?A:,. Peter 0. Se-hcult, P.F_n; do Emery Srunw.. ck Pipaegne Cornpany Ltd. 40 Wellington Row. lord Floor Saint Jchn—New B,unsvvjc$: E2L W- Dear Mr. Sahs2t: October 20, 2006 Page I a.. VJS 457 W—W Re: Ground Vibrations Generated by Wasting at the Bald Mountain 1'." .Z` T'"' Quarry, Saint John, New Brunswick Jacques Whhond WNW, at your requezt. has been retained to prcwice information ort pica , vibrations generated by blasthy at the 84d MounlaWn Q-uar,y �r Saint NIB 7�lz !��'t�n7 7_tC��ZCS a oriC! Of tFe lma=mmmls ZZAC =:' a _r'"a� rli =t ,. .s, IIj"' C-'o joupamal p4xTjw -wn. ba exv=vec to aher s=nVnj=ia-, Jawqjes V=urd L& W, :r',, jenaffof GL,.If lze- t)IaFtng act'AieE a' the �Sz_d Am 2WI 5 2MA S=e V W, C.zr.qL:eB, Eng;neenn�- Ltd ha ee,- �orifwkj In WZA& DuAg %e za -Ir.:' rn* lhani '-4,0 a* the 3 te. Dj6f7'7' b. in r7: ninE N'vere at t7' a-d t�'�: 4:'; bt- nut 115 mrvsec JeW, pandc ar�.' «e! the s.rcnt_i-c� lr L . ... T'nc 1o=IL'!cns- -wriere ground l-,,ave bean canz:.cter*.,`� v.n', .11 !z hi, ghest are Grei:r Head Rcad and r *0 TFU MaMhu 549 ne omw d vltratiDns -neasuret at zwel Ms Bong Cheer Head FIcad ha%n rurg& bmwecn 0 and 1 mrnkac� Tnv� rn-, mmrir'!3 dmg Oman Amid h'ave �_" cr. bwn: �ez -I 3c" ..; 9,CQ', rn from to WW WY We A Um mwm.' Mt: asurcmcntz r., so CRO MaAne Swp zwe as htgn as IE,_ r;rVsc-7 1, v';hen the n.. ^Z-Z:e Lt a%vay. However. chsn'gesv'e7 re rn's;je 7' 1 'he!Cac-mg pattem �cr the blas= znv all teen tmvar. Fj-thenrrcra. 3z: 1"se face in the quaro mc%ss:n,. norlaaw ddWan Green , .azz! RRL2�1' grnfx't a'. 'ts hu=we SHY .W�_ ._du -; e' n tre point where' e nzi: ogge:-, jaC4;KM_- i pro;:�Sed P'p-'Aw, c. L-,'Cnic . fl.r , �jjjC j �j Wh-ftf Ord �-[ --,P CiOSLM", ;Joint 1,-., 1 1 r:; I If CrT I ItL- to thi-4 !oaaticn .s ff'!v Dex.to' _td, v.� re have beer set-up as px'rt �,f t# & !rcnitnir � _q. Ground vil-ratiin measurements at fts sc. a ion nave never excescc' an;j fria:juently, the sejsmcgrap^s have not triggered, Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH-1-2006 Reply Evidence Page 2 Attachment 1 ✓Ege 2 Cctober ' , 3, T T r,,rc, b .2 e n past m c. ; fi to H r; g d a a sou 7; 73 Z, i—z i 1, i is t !1,,s Mh re v�- ipe`T-f' 1'i bf f, dc-CA—1 tfj Ile a--!I Mzun, .— Q r4ot be expected to cxceed 4 rnm sec !peak partic-le velocity). Furthe"� ore, zz t 'hc face of ltrf, quarry moves, closer to Green Head FLoad. ground v.bmticns there are exp6zted ic. mcrease- Since tht ineacurementz zt Green -41 r �,e Head Pozid ha,,.,e b6er� C- q - Y Wi*1 1i fY V%e b tn:ed 7 jl fi -e t)insfi ng. Tiv !bt- ,t. mu Ahra.1a ns a: 4he prop;.Sed z7pel;vl� lccI;Iix C' . G-,A F`I'Z;If -at_- ir 41-- ft:U!R > ; =-z- I-Iz arne� ts YOU have iNe teat v--z- r4eetsu--ith, y=, xesert requr, 4 i . e u:Ty 'jons ^. m ii ariv, fc--'rer :)epse contact. uts s"t "cur ea es, JACQ�J=-S VP-MI-FORD UMiTEED Razinev P. McAf!4% PKD., P�E-c. Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 1 Attachment 2 ATTACHMENT 2 EXAMPLES OF EXISTING HIGH PRESSURE NATURAL GAS TRANSMISSION PIPELINES IN HIGH DENSITY AREAS [MATERIALS AVAILABLE IN HARD COPY IN A BINDER FILED UNDER SEPARATE COVER] Binder Table of Contents 1. Edmonton, Alberta Canada — City Maps 2. Calgary, Alberta Canada — City Map 3. Westcoast Energy — British Columbia, Canada 4. Union Gas — Ontario Canada 5. TCPL — Ontario Canada 6. Enbridge — Ontario Canada 7. Texas Eastern Gas Transmission — Pennsylvania & New Jersey, US 8. Maritimes & Northeast Pipeline — Massachusetts & Maine, US Emera Brunswick submits the following mapping evidence binder titled "Emera Brunswick Pipeline - Summary of Existing High Pressure Natural Gas Transmission Pipelines in High Density Urban Areas ". 1. Introduction There is general public concern regarding the safety of the proposed Brunswick Pipeline near high density urban and industrial locations within the City of Saint John, New Brunswick. This document is intended to relieve this concern by providing multiple mapping examples of similar high pressure transmission pipelines operating safely in other urban and industrial locations throughout Canada and Eastern United States. Specifically, the Canadian mapping examples illustrate how similar large diameter high pressure transmission pipelines are common place in other large Canadian cities. Further, it demonstrates how transmission pipelines co -exist with other critical infrastructure and most importantly how they have been operated safely in close proximity to high density populated and industrialized areas. Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 2 Attachment 2 2. Summary of Examples Table 1 below provides a summary of each mapping example contained in the binder identifying the pipeline owner, location, pipeline size, summary of the infrastructure type and proximity to the pipeline, maximum operating pressure and governing regulatory authority for the pipeline. For illustrative purposes, we also note the ATCO Pipelines Rossdale high pressure gas transmission pipeline which was approved in May, 2001 though never built (Alberta Energy and Utilities Board Decision 2001 -34). In its Decision, the Alberta Board observed the fact that in excess of 560 km of high pressure pipelines already existed within the City of Edmonton and that the normal setback from buildings was 15 metres. 3. Conclusions The examples identified and described in this document confirm the widespread existence of high pressure natural gas pipelines successfully and safely operating within high density urban and industrialized areas. The examples chosen are representative of many others which have not been included for the sake of brevity. The existing Maritimes & Northeast Saint John Lateral, although not included in the binder, would be another example of a transmission pipeline operating safely in a high density urban setting since being placed in- service in 2000. The mapping examples clearly illustrate that critical infrastructure, residential and commercial developments, schools, hospitals, shopping malls and other public facilities exist in closer proximity to existing gas transmission pipelines that operate in Canada and the U.S. in a fashion similar to how the Brunswick Pipeline will operate. This fact is highlighted by the mapping references below: Hospital(s): Westcoast — Chetwynd, BC (55m); Westcoast — 100 Mile House (65m); Union - Hamilton to Milton, ON (367m); M &N Westbrook lateral (100') Schools: Westcoast — Quesnel (200m & 160m), Chetwynd (25m & 50m); Union Trafalgar (30m, 183m,97m &161m)-, Windsor (185m & 76m), TCPL Oakville & Burlington; Enbridge — Mississauga & Toronto, ON; TE site 1 (50') and site 7 (579') Critical Infra: Enbridge Mississauga (Electrical substation); TE M &R 30 site 2 - Philadelphia airport & Interstate (30'); site 3 — water treatment plant (50') Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 3 Attachment 2 Residential: Westcoast — Chilliwack (30m), Quesnel (25m); Union — Trafalgar, & Waterloo within 30m; TE Marietta (site 1), Eagle (site 4 & 6), Lambertville (site 7), M &N Methuen (site 8) Apartments: Westcoast — 100 Mile House (10m); Chetwynd (50m), Chilliwack (100m); TE Sites 4 & 7; M &N Site 8 Churches: Westcoast — Quesnel (15m), Union — Windsor (116m); TE Marietta Site 1 (415), Refineries /Industrial: Windsor — manufacturing (30m); TE M &R 30 site 3 refinery (30'), tank farms (50'), large auto plant (400') Malls /Department stores: Westcoast — 100 Mile House (100m), Chilliwack (Cottonwood Mall), Chetwynd (155m)-,Union — Trafalgar (87m, 200m), Windsor (142m, 200m), Waterloo (10m); TE - Lambertville (site 7), M &N Methuen (site 9) Commercial Bldgs: Union — Trafalgar (183m), Windsor (26m); M &N Westbrook Lat. distribution center & large factory (150') These examples demonstrate that transmission pipelines similar to the proposed Brunswick Pipeline have been operating safely for many years and that it is common place in many urban and commercial areas to effectively construct and operate these systems. These mapping examples present a proper comparison to the proposed Brunswick Pipeline, given the strict federal pipeline regulations and standards pertaining to transmission pipeline design and material specifications based on surrounding land use, population density and operating pressure and NEB /OEB regulatory governance. This is true even though the mapping examples include various sized gas pipelines operating over a range of different land use and operating pressures. For example, the NEB "Leave to Open" process, which requires transmission companies to supply project related documentation regarding the engineering design, material specifications and certain other key construction performance testing among other things to demonstrate conformance to all required regulations pertaining to class location and proposed operating pressure, prior to authorizing the pipeline to be placed in- service, in essence allows for pressure transmission pipelines regardless of operating pressures to be viewed on an even basis relative to operating pressure. In other words, the federal pipeline regulations and NEB governance criteria dictate certain design parameters an operator must meet for any given class location (i.e., population density) and operating pressure of the facility. 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O V- Oa o= U N m U_ 3 J O L W Q O-0 O V C') ,c c'r1 O m M > C J a `° `h ': o o c o Q a) c -0 rn� ono ) f mfg m E a � �L E Ec' m2o� ns.�- '� 10uE E O L O O U L .0 r m o n U c m y c o c cu N a7 c v N O@ N L E O Y 0 0 O m O �- E c N O S O) 7 O C C O O O L CV 7 L n O` T� 9 ._ (' L L L N N _O y N 0 0 W N O N d m N O L a 3 L_ N V m > M c9 >a7 C U >� w Z 0> m cu o U o U a c LU as H c 0 0 ._ LLB LLB UU C.6 06 C6 0 ¢ N N O N O N O N E m E O E O E O IL 0 jz 2z 2z 2z° cc 00 Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 1 Attachment 3 ATTACHMENT 3 REVIEW OF PIPELINE INCIDENTS CITED BY INTERVENORS By: Bercha Engineering Limited 1. Introduction The purpose of this document is to present results of a comparison between the proposed Brunswick Pipeline and the pipelines for which intervenors have cited accidents. 2. Similarity and Difference Criteria 2.1 Regulator: US or Canada, federal or state /provincial. 22Pipeline Age: Old pre -2000, new post -2000. Many new requirements for training, inspection, operation, become state -of -art in post -2000. 2.3Materials: New materials metallurgy enhances pipeline safety by being tougher, ductile, and fracture resistant. 2.4 Coatings: New coatings. 2.5 Medium: Liquids pipelines are under different regulatory, design, and operational standard than natural gas pipelines. LPG pipelines very different from natural gas lines. 2.6 Location: Pipelines in urban locations are more closely monitored and designed to higher standard than those in rural locations. Industrial locations have higher exposure to third party impacts. 2.7 Operating Pressure Maximum Allowable Operating Pressure (MOP) varies between roughly 100psi (715 kPa) and 2000psi (14280 kPa). High pressure pipelines are considered to be those with MAOP at or exceeding 500 psi (3570 kPa). 2.8 Diameter large diameter lines are NPS 24 or larger 2.91nspection Capability Internal integrity inspection (MFL) capability is used in state of art and retrofitted older lines 3. Summary of Incidents and their Difference Ranking The incidents, along with their similarities and differences, are summarized in Table 2. The following similarity ranking is used: ■ Rank 3 Significantly different (more differences than similarities) ■ Rank 2 Different (roughly same number of differences and similarities) ■ Rank 1 Similar (more similarities than differences) Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 2 Attachment 3 4. Conclusions It can be seen from Table 2 that of the 6 unique pipeline failure examples cited, 4 are associated with significantly different pipelines. The two examples ranked at 2 are still different and correspond to older NEB regulated pipelines in rural locations. All the pipelines cited that experienced failures were constructed prior to 2000 and most of these in the 1960's and 1970's. Since that time, materials including line pipe and protective coatings have improved significantly. Regulators now require the development of integrity management programs and monitor their implementation. Internal inspection procedures have been developed to the point where they have become industry practice, and are highly reliable and occur regularly. The Brunswick Pipeline urban segment will be further protected from third party damage because it will be embedded with sand in a rock ditch. In conclusion, the incidents summarized in Table 2 should not be expected to occur from the Brunswick Pipeline. Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 3 Table 2 Incident Similarity and Difference Summary October 20, 2006 Page 3 DIFF. NO. AUTHOR INCIDENT DATE ' >DESCRIPTION SIMILARITY DIFFERENCE RANK 1 J.Pearce TCPL Rupture, 15/04/96 Ductile overload 2.1 NEB reg 2.2 Old pl 1962 2 St. Norbert fracture from slope P,8 High pressure History of problems Manitoba movement -crack at and retrofits toe of circ weld 2.5 Natural gas 2.4 coating initiated, La Salle 2.8 NPS 34 deteriorating river crossing 2.9 MFL 2.6 rural, river zing NEB P96H0012 2.3 old pipe 2 D. Richard Belgium 30/07/04 LNG pipeline from 2.5 Natural gas 2.1 Belgian 3 port of Zeebrugge 2.7 High pressure regulation through 80bar ERP casualties Ghisglenghien started leaking after 2.8 NPS 40 2.2 Old pl 1970 construction damage 2.3 old pipel (parking lot) and during ER ruptured 2.4 coating old and ignited with 23 2.6 industrial site, ER casualties unmonitored use of machinery 3 D. Richard Carlsbad, NM, El 19/08/00 Microbial Induced 2.5 Natural gas 2.1 US DOT 3 Paso corrosion caused 2.7 High pressure 2.2 Old pl 1954 rupture at river History of problems crossing with 2.8 NPS 30 and retrofits consequent ignition 2.3 old material -not and casualties at crack resistant camp location i 2.4 coating j deteriorating 2.6 rural G 2.9 no MFL 4 D. Richard Bellingham, WA 10/06/04 Gasoline products pl 2.7 High pressure 2.1 US DOT 3 failure restarted in 2.8 Large 2.5 Gasoline error resulting in j, major spill into river diameter Operating error and casualties at River spill camp fire 2.6 rural 5 Wreathall TCPL, 14104/02 Rupture from SCC 2.1 NEB reg 2.2 Old pl 1960's 2 Brookdale, colony at base of 2.7High pressure History of problems Manitoba -alarm pipe - internal MFL and retrofits reached several failed to id problem 2.5 Natural gas 2.3 old pipe - minutes after in 1998 -- caused by 2.8 NPS 36 fragmented at failure occurrence of a disbonded ext site rupture coating 2.4 coating I TSB P02H0017 deteriorating- hand applied asphalt j enamel exterior j coating i 2.6 rural 2.9 MFL failure- obsolete inspection technique was used Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 3 October 20, 2006 Page 4 6 P. Court Same? See #3 Po2h0017 7 Kuprewicz Carlsbad, NM, El See #3 Paso 8 I. Court Belgium, See #2, 3,4 Carlsbad, Bellingham 9 I. Court Flour Bluff, 16/07/06 Rupture of 2.7High pressure 2.1 US DOT 3 Petronilla —ng Tennessee Gas 2.5 Natural gas 2.2 Old pl 1960 pipeline burst- pipeline History of problems fire 2.8 large NPS 2.3 old material -not crack resistant 2.4 coating inadequate 2.6 rural 2.9 no MFL 10 I. Court Clark County, 22/07/20 See #9 Tennessee Gas 06 PL Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 1 Attachment 4 ATTACHMENT 4 RESISTANCE TO PUNCTURE PERTAINING TO THE BRUNSWICK PIPELINE By: Kiefner & Associates, Inc. The "Resistance to Penetration" of a pipeline is an important measure of its ability to withstand third party damage. The pipe toughness is a measure of the pipeline's ability to limit the consequences of such damage. There has been significant research undertaken in North America and Europe regarding the resistance to penetration of pipelines. In particular, the European Pipeline Research Group (EPRG) has developed a "pipeline destructor" which is a large laboratory tool that simulates the mechanism of a tracked excavator and its ability to puncture the pipe. Puncture is taken to mean that the pipe wall is penetrated by a single excavator bucket tooth in contact with the pipe. If the axial dimension of the resulting throughwall hole is less than the critical defect length, the pipe will leak and not rupture. Based on this research an equation has been developed that shows the relationship of pipeline puncture resistance to an excavator tooth. The equation is as follows: Where: RP = C1.17- 0.0029 *(OD))*(L,.)*(Wt*") D � Wt Rp = Puncture Resistance (lbf) OD = Pipe outside diameter (inch) Wt = Pipe wall thickness (inch) L = Length of tooth (inch) w = Width of tooth (inch) Q, = Ultimate tensile strength (psi) A review of the above equation indicates that the controlling factors in the puncture resistance of the pipe (as they relate to pipe attributes) are wall thickness and the ultimate strength. An important point indicated by the research and reflected in the above equation is that puncture resistance is not affected by internal pressure. In addition, the equation also shows that the puncture resistance is influenced by the size of the excavator tooth. As the tooth size increases the shear area of the pipe at the point of contact increases allowing for an increase in puncture resistance. This relationship is reflected in Figure 1. It is important to note that larger tooth sizes will typically be associated with larger equipment and while larger equipment can produce Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 2 Attachment 4 larger loads the puncture resistance of the pipe will also be larger due to the increased tooth size. For the purposes of this assessment we have selected a general purpose tooth typically associated with smaller equipment < 20 tons and applied this through a range of excavator sizes. The use of this smaller sized tooth will be conservative for the assessment of larger equipment. The following graph (Figure1) shows the puncture resistance of 30 -inch pipe with varying wall thicknesses and size of excavator general purpose tooth. As indicated by the dashed lines, a puncture load of 104,500 Ibf is required for a 1.5 inch long by 0.5 inch wide tooth to penetrate the Class 3 wall thickness pipe on the Brunswick Pipeline (30 -inch OD x 0.618" WT Grade X -70). Pipeline Puncture Resistance 30.0" OD, Grade 70 Pipe 140,000 120,000 100,000 c a 0 80,000 J V a 60,000 40,000 20,000 0 I i i L =4.0 "w =1.00" I I ,.` L =1.5 "w =0.50" I ii I L = 2.5" w = 0.50" i I I I I , i II 0.000" 0.100" 0.200.. 0.300" 0.400" 0.500" 0.600" 0.700" Wall Thickness (inch) Figure 1 Puncture resistance of 30" 0.618- inch -wall pipe Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 3 Attachment 4 This puncture force is related to the size of excavator through the following equation. F=1.5 * 1444 * W11.126007 ) Where: Fp = Excavation (Puncture) force (lbf) W = Excavator Weight (tons) As recommended by the EPRG, an amplification factor of 1.5 has been included to account for the potential increase in digging force as a result of geometry of larger machines weighing more than 44,000 lb (22 tons). Figure 2 shows the relationship of excavator weight to digging force. As indicated by the dashed lines, an excavator in excess of 109 tons is required to produce the required puncture force of 104,500 Ibf. Maximum Digging Force Versus Excavator Weight 30.0" OD x 0.618" WT, Grade 70 Pipe 110,000 Indentor dimensions: L = 1.5" w = 0.50" 100,000 1 ' 90 ,000 I I I •I I 80,000 , I I I 70,000 I I I I .G 60,000 - LL , IM 50,000 - I 0 l 40,000 � I 30,000 i I , 20,000 10,000 D 0 20 40 60 80 100 120 Excavator Weight (tons) Figure 2 Digging Force as a Function of Excavator Weight Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 4 Attachment 4 Information regarding the number of excavators and backhoes in different size categories has been collected from industry sources and government statistics in North America to develop a distribution of size of excavator versus population. Figure 3 indicates that over ninety -nine percent of the population of excavators are below the size that are capable to puncture the Class 3 wall thickness pipe on the Brunswick Pipeline. Cumulative Probability Versus Excavator Weight 30.0" OD x 0.618" WT, Grade 70 Pipe 1.0 I I I I 0.9 0.8 0.7 i 0.6 ,I a � o I a 0.5 I � > 75 0.4 P�l E 0.3 0.2 0.1 I 0.0 0 20 40 60 80 100 120 Excavator Weight (tons) Figure 3 Cumulative Probability Versus Excavator Weight Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 5 Attachment 4 Pipe Toughness and Flaw Tolerance Toughness is the measure of the ability of the pipe metal to tolerate flaws that could be caused by equipment such as tracked excavators. The CVN toughness values achieved for all pipe sizes and Location Classes on the Brunswick Pipeline exceed 60 ft. -Ibs at design temperature. As shown in Figure 4, in the unlikely event that the Class 3 pipe on the Brunswick Pipeline (30 -inch OD 0.618" WT Grade X -70) were to be punctured by an excavator tooth (see above discussion), this level of toughness will provide for a leak before break scenario for all throughwall punctures having an axial length less than 13 inches at the maximum allowable operating pressure. In addition, Figure 4 also indicates the pipeline's ability to tolerate mechanical damage inflicted by third party excavations. For example, the Class 3 pipe on the Brunswick Pipeline can tolerate an axially orientated crack -like flaw 39- inches long (1 meter) and 40% of wt deep. 3,500 3,000 2,500 or 2,000 CILm N Y m 1,500 m LL 1,000 500 Critical Crack Lengths of Pipeline Flaws OD = 30.0 ", Wr = 0.616 ", SMYS = 70,000 psi, CVN = 60.0 ft4b, CVN Area= 0.124 sq.in � I I Area Representative of Surface Flaw = 0.785 Area Representation of 7WC = 0.785 - --- -- -- - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - -- -- -- -- - -I - -- - - --- -- - -- - -- ----- ----- ----- - ---- ! ------ I 0.2 0.3 d�c 0.4 I I Rupture os - - -- -- -- -- - - -- - - -- - 4.449pst---- - - - -II , -- -- 0.6 i Leak I I I ____________ __ _______ 07 I 08 I 09 I I, 0i 1 F I } 0.0 5.0 100 150 200 Length of Flaw, inches Figure 4 24" Location Class 1 Pipe Critical Crack Sizes 250 Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 4 October 20, 2006 Page 6 Analysis of Puncture Resistance for Brunswick Pipeline Class 3 Pipeline 1. Research has shown that puncture resistance increases with WT and grade. For 0.618 inch WT, min puncture force = 104,500 lb . 2. Impact force is related to size of excavator. Excavator must exceed 109 tons to develop required puncture force. Pipeline 140,000 120,000 C 100,000 � w J 80,000 c 60,000 7 n. 40,000 20,000 0 0.000" 0.100" 0.200" Puncture Resistance 30.0" OD, Grade 70 Pipe Maximum 110,000 100,000 90,000 80,000 a 70,000 a °u 60,000 0 'M 50,000 a Op 40,000 30,000 20,000 10,000 0 0 Digging Force Versus Excavator Weight w = 0.50' c Id e r I •. ' 100 120 30.0" OD x 0.618" WT, Grade 70 Pipe Indentor dimensions: L = 1.5" L =4.0 "w °1.00' `- L -1.5 "w =0.50" I I I I I L = 2.5' w = 0.50 I i I 0.300" 0.400" 0.500" 0.600" 0.700" Wall Thickness (inch) 20 40 Excavator 60 80 Weight (tons) 3. Excavator heavy enough to puncture pipe is larger than 99.5% of all excavators in use based on survey of US and Canada market. 4. Fewer than 0.5% of excavators are capable of puncturing Brunswick Pipeline Class 3 WT. Such equipment is not typical of general construction usage Cumulative 1.0 0 .9 0.7 z a a w w 00..8 6 I o [L > E u 0.3 I 0.2 i 0.1 0.0 0 Probability Versus Excavator Weight Exceedance t00% 90% I BOk 70 % 60 / m v c A a 0 50%. m x 30%--- 20 10% 0% 0 Probability Versus Excavator Weight Pipe I I i I I I I I i 80 100 30.0" OD x 0.618" WT, Grade 70 Pipe 30.0" OD - x 0.618" WT, Grade 70 , 'I i I I I n I I I I t��l I i I I I I I ' II I I I I � I I i I I I i I 20 40 Excavator Weight 601 (tons) 20 40 Excavator 60 80 100 120 Weight (tons) Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 7 Attachment 4 Conclusion Research has shown that pipeline wall thickness is the most important factor influencing puncture resistance followed by grade of material. Internal pressure has not been identified as a contributing factor. Over 99.5 percent of the population of excavators are below the size capable of puncturing the Class 3 wall thickness of the Brunswick Pipeline. This supports the conclusion that it would be highly unlikely for a puncture of the Brunswick Pipeline system, within urban Saint John, to occur over the life span of the project. Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 1 Attachment 5 ATTACHMENT 5 ASSESSMENT OF POTENTIAL FOR PRESSURE - CYCLE - INDUCED FATIGUE PERTAINING TO THE BRUNSWICK PIPELINE 30 -INCH CLASS 3 PIPE By: Kiefner & Associates, Inc. Introduction Pressure cycle induced fatigue crack growth has historically not been identified as a threat of concern for Natural Gas Transmission Systems and as a result is considered a low risk. This has been demonstrated by an industry- sponsored study, GRI- 04/0178 "Effects of Pressure Cycles on Gas Pipelines ", prepared by Kiefner & Associates, Inc., together with Process Performance Improvement Consultants, LLC. The objective of the study was to determine if gas pipelines, in general, have a significant degree of exposure to failure from defects that could become enlarged by pressure - cycle- induced fatigue. The study involved calculating the fatigue life for several typical natural gas pipelines based upon their actual operating pressure cycles. The pressure spectra of these pipelines were compared to those of liquid petroleum pipelines where pressure - cycle- induced failures have occurred within spans of several years of operation and for which fatigue modeling is a well established procedure. The results of the study indicated times to failure that ranged from 170 years to more than 400 years for hypothetical seam defects that could barely have survived a hydrostatic test to 100% SMYS. In contrast, similar defects may only last 5 years when subjected to typical liquid pipeline pressure histories. All the pipe for the Maritimes and Northeast (M &NE) pipeline was subjected to a pipe mill hydrostatic test at a stress level of 90% SMYS and the post- construction hydrostatic test was such that it produced a minimum stress level of 90% SMYS for Class 3. Therefore, based upon the above described studies, pressure cycle induced fatigue crack growth would not be expected in the M &NE pipeline. As further confirmation of the above, Kiefner & Associates on behalf of M &NE performed an fatigue analysis of the pressure -cycle histories of the most aggressive areas of the M &NE system to determine the overall aggressiveness of pressure cycles and to compare the results of this analysis with methods utilized by the liquid industry. The 30 -inch OD x 0.618 -inch WT, X70 pipe to be used in the construction of the Brunswick Pipeline will be identical in quality to that used previously to construct portions of the M &NE system. Moreover, it is reasonable to assume that the Brunswick Pipeline will be subjected to operation conditions (in particular, to pressure cycles) that will be similar to those that have been experienced to date on the M &NE system. Therefore, the hypothetical fatigue life of the Brunswick Pipeline was evaluated using the most aggressive pressure -cycle histories experienced on the M &NE system. The relevant pressure -cycle data from the M &NE system were analyzed to determine the Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 2 Attachment 5 initial size of flaws that would have to be present in the Brunswick Pipeline to have a fatigue life less than 250 years. Analysis Pressure spectra representing one year's operation at 29 locations on the M &NE pipeline were collected and processed. The pressure fluctuations in each of the datasets do not easily lend themselves to fatigue analysis where it is necessary to have a fairly precise definition of a "cycle ". As a result each dataset was processed using the widely accepted rainflow cycle- counting algorithm to reduce the non - uniform pressure fluctuations into a set of stress reversals. This procedure enables the application of Miner's rule commonly used to assess the fatigue life of a structure subject to complex loading. The worst case spectrum (shown in Figure 1) was selected by comparing the cycle histograms on the basis of Miner's Rule. This spectrum was then applied to ranges of flaw sizes using the program PIPELIFE to establish the range of flaw sizes that could fail within 250 years. The resulting family of flaw sizes was then compared to the maximum sizes of defects that could have escaped detection in the seam inspection applied to each piece of pipe by the manufacturer. Figure 2 shows the comparison between the sizes of defects that the manufacturer was incapable of detecting compared to the sizes that would be expected to fail within 250 years. Clearly pressure cycle induced fatigue crack growth is not a potential threat to the M &NE pipeline. Conclusion Pressure cycle induced fatigue crack growth is not a threat to the Brunswick Pipeline just as it is not a threat to the M &NE pipeline Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 5 1,600 1,400 1,200 1,000 V) CL C d 800 n h d a fio0 400 200 0 October 20, 2006 Page 3 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year2004 Figure 1. Worst -case pressure identified on M &NE pipeline l.V i I I I 0.9 - - - - ----------__._______-_____------- --- ----_--------_-- 0.6 - - - - -,- -------,-------------------------------------- i 9.7 - - - - - , -- - -- ----,------------..----,----------;-----,------ u) N 2 Range of flaws for 250 years of life. F0.5 I - - - - - - - - - - - - - L - - - - -- --1 --- ----------- 1----- - - - - -I m i 30.4 - - - - f - - - - - - - - -- - - - - - - - - - - - - - - - - -- - - - - - - - - - = IMill Hydrostatic Test a i 0.2 - - - - - - - - - - - @90.OhSMYS 0.1 - Tolerance on Mill - -' -- - --- - - - - - - - - - - - - - - - -- - - - - - - - - - Inspection 0.0 0 inch 2 inch 4 inch 6 inch 8 inch 10 inch 12 inch 14 inch 16 inch 18 inch 20 inch Length of Flaw, inches Figure 2. Comparison of sizes of defects needed to cause fatigue failure in 250 years to those that could have escaped the manufacturer's inspection for 30" OD x 0.618" wt, X70. Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 5 October 20, 2006 Page 4 Fatigue Analysis for M &NE Class 3 Pipe (30" x 0.618 ", X70) • Pressure spectrums representing 29 locations on M &NE collected & analyzed • A relative ranking of the severity of each spectra was determined by utilizing Miners cumulation rule in combination with a rainflow count. • Worst case spectrum utilized to perform fatigue analysis using crack growth model (Pipel-ife) • Range of flaws sizes that could survive > 250 years established • Comparison of 250 yr boundary with mill inspection requirements 1.600 1.400 1.200 •� 1.000 a C 800 N N 600 IL 400 200 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oc Nov Dec Year 2004 M i 0.8 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ .. _ _. - - - - -i ;Fb.7 - -- -- - -- - -- - -- -- -- -- - - - -- .0 .6 - - _ _. _ _ _ - - - _ - - - - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - u (Range of flaws for 250 years of life. H0.5 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 304 - - - - - - - - - - - - - - - - - - - - - - - - - - - L !Mill Hydrostatic Test 0,0.3 - - - - - - - I 0.2 _ _ _ _ _ _ _ _ _ _ _ _ _ 90.0% SMVS_ 0.1 Tolerance on Mitl _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Inspection � � 0.0 0 inch 2 inch 4 inch 6 inch 8 inch 10 inch 12 inch 14 inch 16 inch 18 Inch 20 inch Length of Flaw, inches Fatigue Analysis for Maritimes NE Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 1 Attachment 6 ATTACHMENT 6 IN -LINE INSPECTION REASSESSMENT INTERVALS FOR BRUNSWICK PIPELINE CLASS 3 PIPE (30" OD x 0.618" WT, X70) By: Kiefner and Associates, Inc. This document presents the basis for establishing the In -Line Inspection (ILI) interval for external corrosion for the Brunswick Pipeline class location 3. The critical corrosion flaw size as a function of operating stress level can be determined for any pipe using standard defect analysis methodologies, such as the NG -18 "log - secant" equation, ASME B31 G, Modified B31 G, or others. Figure 1 shows the relationship between critical flaw size and operating stress level for the Brunswick Pipeline 30 -inch OD x 0.618 -inch Grade X70 pipe based on the NG -18 equation and considering defects having an elliptical profile. At any stress level, critical flaw sizes range from short- but -deep to long- but - shallow. As the stress level is increased, the critical flaw sizes are seen to decrease. Consider that the operator of a pipeline elects to use in -line inspection (ILI) to assess the integrity of the pipe against the threat of metal loss due to corrosion, which is the principal time - dependent threat operative on a gas pipeline having a nonshielding coating. The ILI will inform the operator about all anomalies having metal loss in excess of 10% of the wall thickness, and perhaps even shallower metal loss. The operator will establish a threshold on size and severity for anomalies that will be investigated and repaired in the field. For purposes of this example, consider a remediation plan for the Brunswick Pipeline Class 3 pipe whereby anomalies having a computed failure stress below 100% of SMYS or indicated metal -loss depth exceeding 40% of the wall thickness are investigated following an assessment. The lower part of Figure 1 shows the curve representing the remediation criteria for Class 3. Anomalies less severe than the remediation criteria will not be investigated in the field, and if they are active corrosion, will continue to enlarge over time at some corrosion rate. This process is shown by the vertical block arrows in Figure 1 showing corrosion growth from the remediation threshold to the critical depth. It follows that the time necessary for an unremediated anomaly to grow to critical size is a function of the remediation threshold the operator selects and on the corrosion rate. Based on this information it is possible to determine an assessment period for the pipe segment. ASME B31.8S suggests three default corrosion rates (low, moderate, and high), depending on soil resistivity and the perceived intensity of corrosion activity. A corrosion rate of 0.003 inch /yr (3 mils per year) is suggested for soils with high resistivity or situations where the coating is basically sound, the CP system is functioning effectively, and no significant shielding factors are present. At the other extreme, a corrosion rate of 0.012 inch /yr (12 mils per year) is suggested for soils with low Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 6 October 20, 2006 Page 2 resistivity or situations where aggressive corrosion is presumed to occur for whatever reason. Figure 2 presents the estimated times to failure for Brunswick Pipeline 30 -inch OD Class 3 pipe operating at the maximum operating pressure, where corrosion is assumed to occur at a rate of 3, 6, 9, & 12 mils per year. The corrosion is assumed to grow from the remediation threshold to the critical defect size. The results of the analysis indicate the estimated minimum time to failure is on the order of: • 94 years @ 3 mils /yr, • 47 years @ 6 mils /yr, • 31 years @ 9 mils /yr, and • 23 years @ 12 mils /yr, Conclusion Therefore based on this information a reassessment interval via In -Line Inspection would have to take place within these time frames. Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 6 1.0 0.9 0.8 0.7 o, 0.6 C V 0.5 m 0.4 CL 0 0.3 0.2 0.1 Maritimes and Northeast Pipeline OD = 30 ", WT = 0.618 ", SMYS = 70,000 psi October 20, 2006 Page 3 I I II I I I I � I I i - - - - -- - ----- - - - - - - - - -- ---- - - - -r- - -------- - - - - - - - - - - - - - @1,440 psig, 50% SMYS - - - - - - - - - - - - -,- - - - - - - - - - - - - _ - - - - - - - - -. - - - - - - -i I o I - - - - - - - - - ' - - - ' c �291mi1s - - - - -,- - -,- - - - - - - - - - - - -, - - -- - - - --- - ,- - o - I I I O I I O I -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - I I - - -- - - - - -- I I c 308 mils I I I p I i I Anomalies investigated over 40% I I V � I I I -- -- - - Remediation - I -' - I - - -------------- - ; - - - - -- - - - -- - - --- - - - - - -' - Criterion for 100 %6MYS - - - - - - ' Class -- I - - -- - - -- - - - -- - - - - - - - - - - - - - - - - - - - - - '- - - - -- - - - -- - - - -- - - - - - - - '- - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - { 0.0 i-- 0 inch 2 inch 4 inch 6 inch 8 inch 10 inch 12 inch 14 inch 16 inch 18 inch 20 inch Length of Flaw, inches Figure 1. Critical Defect Sizes Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 6 140 120 WIT R d 80 7 LL 0 60 H 40 20 Maritimes and Northeast Pipeline Class 3 Pipe OD = 30 ", WT = 0.618 ", SMYS = 70,000 psi October 20, 2006 Page 4 I I I I Corrosion Rate - -- -- --------------------------------- 3mil /yr� I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I - ---- - -} - -- - - - - - -- -------------- '- - - - - -- - - - - -- ------ + - - - -- 6 mil /yr -� I I I I I - ---- - -' - -- -- ' - - - - -- - - - - -- ----- L-- - - - - -- I I I I 9 mil /yr - -�—: I I I I I I I I - - - - -- - - - - -- - - - - -' ---- - I II I I I I I I I I 0 i-- 0 inch 2 inch 4 inch 6 inch 8 inch 10 inch 12 inch 14 inch 16 inch 18 inch 20 inch Length of Flaw, inches Figure 2. Times to Failure Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 1 Attachment 7 ATTACHMENT 7 DESCRIPTION OF BRUNSWICK PIPELINE INTEGRITY MANAGEMENT PLAN (IMP) The operational hazards and threats will be managed as a component of the Brunswick Pipeline Integrity Management Plan, (IMP) which is expected to contain the following components: 1. IMP Scope 2. Corporate Policies, Objectives, and Organization 3. Documentation and Information Methods 4. Pipeline Integrity Management Program Records 5. Competency and Training 6. Management of Change Plan 7. Incident Investigation 8. Hazard identification and Control 9. Risk Assessment 10. Hazard Control and Risk Reduction 11. Pipeline Integrity Management Program Planning 12. Integrity Assessment Methods 13. Inspections, Testing, Patrols, and Monitoring 14. Mitigation and Repair 15. IMP Review and Evaluation The IMP itself is not typically required to be filed for approval by the NEB, but is subject to audit by the NEB as per the OPR -99, s 46. In addition the IMP and associated activity is discussed with NEB staff on an informal basis, typically on an annual basis. With respect to hazard identification, possible threats will be identified. There are typically nine threat categories which are further delineated by three time related defect types. A risk assessment process will be used to address all nine threat categories. The nine threats categories are as follows: Time Dependent — Capable of growing with time unless they are identified and mitigated. External Corrosion Internal Corrosion Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 2 Attachment 7 Stress Corrosion Cracking Stable — Stable unless acted upon by an outside force or an increase internal pressure Manufacturing Related Defects Construction /Fabrication Related Equipment Time Independent— Can occur at any time. Third Party Damage Incorrect Operations Weather Related and Outside Forces With respect to hazard control, the following will briefly describe management of each identified threat category. External Corrosion External corrosion will be managed through use of a high performance fusion bonded epoxy pipeline coating as well as through a state of the art corrosion protection system utilizing a series of rectifiers and an associated impressed current. The pipeline coating will undergo rigorous testing at the pipe mill as well as during construction to ensure its integrity. The corrosion protection system will be designed by qualified corrosion engineers and current readings will be regularly taken and evaluated over the life of the pipeline to check the system's effectiveness and to identify any required modifications. On an annual basis, the entire pipeline will be inspected with a flame ionization leak detection unit capable of detected parts per million of combustible material. This inspection would clearly detect any pinhole leaks caused by corrosion. In addition, the pipeline will undergo regular in -line inspection with a high resolution magnetic flux "smart pig" which is capable of detecting very small amounts of internal or external corrosion. This in -line inspection program will involve an internal cleaning of the pipeline as well as tools that look for dents as well as metal loss. Presence of a dent with associated metal loss is a strong indicator of third party damage. It is expected that a baseline series of internal tool runs will be conducted in the first three years of pipeline operation and that subsequent runs will be conducted every seven to ten years. This in -line cleaning and inspection process is conducted with the pipeline in- service, and is non - intrusive in that it causes no harm to the internal coating of the pipeline. Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 3 Attachment 7 Internal Corrosion Internal corrosion will be managed through continual monitoring of the gas quality at the LNG terminal receipt point. This equipment will include a gas chromatograph as well as moisture and sulphur analyzers. It is expected that the gas quality at the LNG terminal receipt point will be of high quality and be free of any appreciable moisture content. It must be in line with the gas quality parameters contained within the Brunswick Pipeline Tariff or supply will not be permitted to enter the pipeline. As mentioned above, internal inspection tools will be looking for any internal corrosion, which is typically at slower corrosion rates than external corrosion. Stress Corrosion Crackinq Stress Corrosion Cracking is not considered to be a viable threat for the Brunswick Pipeline. This issue has been found to be associated with older lines that did not employ fusion bonded epoxy coating systems. Equipment, Manufacturing, and Construction Related Threats Equipment, manufacturing, and construction related threats are to a great extent managed through prevention. Quality material and construction specifications that require the use of modern materials and modern construction techniques are proven prevention methods. The Brunswick Pipeline will have extensive engineering standards and specifications to prevent these threats from occurring. These measures include identification of any susceptible materials or construction anomalies, hydrostatic testing of all pipeline components to 150% of planned maximum operating pressure, and 100% x -ray inspection of all field welds. Third Party Damage Third party damage can occur because of events such as heavy equipment crossing over the pipe or excavation near the pipe and will be accordingly aggressively managed in order to prevent any occurrence. Prevention measures will include: Pipeline Patrols — Low altitude regular inspections looking for encroachment, unauthorized crossing activity, erosion, missing line marker signs, forest harvesting activity, and any excavation activity. In the urban areas, these patrols will be conducted on a daily basis by vehicle and /or on foot. Crossing Administration — Brunswick Pipeline representatives will act as agents for the NEB in administering s.112 of the Pipeline Crossing Regulation. This program will include a defined process to apply for the safe crossing over the pipeline by heavy equipment or by other buried utility infrastructure. Pubic Awareness Program — This Program will target contractors, excavation firms, consulting engineers, forest harvesting firms, landowners, and municipal officials and Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 4 Attachment 7 will clearly outline acceptable and unacceptable activities on the easement and within a 30 meter control zone. One -Call Program — Brunswick Pipeline will participate in the Saint John One Call Program for locates within the urban area. In rural areas, a toll free telephone number will be in place and clearly communicated to provide locates free of charge and within two business days for all non - emergency locate requests. Saint John Buried Utilities Committee — Brunswick Pipeline will participate in this group which consists of all entities with buried plant within the City and which meets regularly to discuss upcoming excavation activity for construction or maintenance. Pipeline Markers — Signs will be erected warning of the presence of a high pressure gas transmission pipeline. The rule of thumb for this signage is that an individual can stand at one sign and clearly observe the next sign with line of sight. Line maker signs will also be erected at all road crossing locations Vegetation height will be controlled such that this signage is clearly visible. This signage will be regularly inspected and any damaged or missing signs will be promptly replaced. Third Party Oversight — Brunswick Pipeline personnel will be on -site and continually monitoring any excavation activity that is in close proximity to the operating pipeline. Material Selection — The Brunswick Pipeline itself will be constructed of high strength steel which is extremely resistant to damage from typical excavation equipment and has very high puncture resistance. Incorrect Operations Incorrect Operations is managed through a periodic review of all polices, plans, and procedures used by Emera Brunswick operating personnel in the performance of their work. An internal audit function will periodically review operator actions for compliance with policies, plans, and procedures. All operating personnel will be fully trained in all aspects of operation and maintenance activities that are within their role description. Weather Related and Outside Forces Weather related and outside forces will be managed through quality material and construction specifications as well as terrain and environmental considerations and provisions. Brunswick Pipeline will employ extensive engineering standards and specifications to mitigate the occurrence of these threats from occurring or to control their impact during the operational life of the pipeline. In addition, many operations and maintenance procedures provide for the management of this threat. These include patrolling, soil stabilization, stress monitoring where warranted, depth of cover reviews, grounding to manage lightning strikes, and the review of blasting plans and subsequent monitoring of any blasting activity. Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 8 ATTACHMENT 8 RESPONSE TO SAINT JOHN FIRE DEPARTMENT RISK ANALYSIS By: Bercha Engineering Limited 1. Introduction October 20, 2006 Page 1 The purpose of this document is to comment on the risk analysis aspects of the above risk analysis (SJFD RA). The SJFD RA was carried out by the Saint John Fire Department (SJFD) with reference to the "Quantitative Risk Analysis of the Proposed Brunswick Natural Gas Pipeline" (QRA) but without adequate consultation with Emera Brunswick or the experts who prepared the QRA. It should be noted that since the publication of the SJFD RA, extensive discussions between Emera Brunswick and SJFD personnel and experts have taken place with a view to resolving many of the discrepancies between the SJFD RA and QRA. This document addresses the SJFD RA as if these discussions had not taken place, with only brief notes indicating the issues that have been explicitly resolved. 2. General Discussion of SJFD RA The SJFD RA is a document directed at explaining the risks associated with a possible pipeline rupture and what can be done to mitigate them both at the incident prevention and at the consequence reduction level through emergency response. Because the document was prepared without adequate participation of pipeline and risk analysis experts it contains numerous faulty statements and conclusions. In the course of our meetings, we were advised that these faulty statements and conclusions have been acknowledged and have generally been resolved. This document deals primarily with the risk analysis related aspects of the SJFD RA and leaves the practical recommendations and emergency response plan (ERP) aspects to other documents. Emera Brunswick's reply to the SJFD RA recommendations applicable to Emera Brunswick are addressed in Section 3.2.4 of this Reply Evidence. 3. Specific Issues 3.1 1. Items 3.2 ll. Definitions The definitions given in II do not substantially differ from those in the QRA, but are however, in some cases, rewritten to fit the SJFD context. Also some definitions differ from those in the QRA. Examples are: Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 2 Attachment 8 (1) Risk Assessment, which in the QRA means the quantification of risks. In the SJFD RA, Risk Assessment, is redefined to mean: "A report that shows assets, vulnerabilities, likelihood of damage, estimates of the costs of recovery, summaries of possible defensive measures and their costs and estimated probable savings from better protection. A "risk analysis" is the process of arriving at a risk assessment, which is also called a "threat and risk assessment ". It is not clear why the SJFD RA has devised significantly different definitions. (2) Hazard. Another definition for hazard, which in QRA means the potential for creating harm is redefined in the SJFD RA as: "An unknown and unpredictable phenomenon that causes an event to result one way rather than another." It is not clear why such definitions are created when the ones commonly acceptable were identified in the QRA. 3.3 Ill. Product Characteristics Under Failures there is a clear differentiation between leaks and ruptures which later disappears. 3.4 IV. Analysis of Applicable Standards No comment. 3.5 V. Event Causation A short discussion on terrorist acts is given in the SJFD RA. It has been explained in the QRA that, as there are no historical data in Canada for pipeline failures caused by such acts, they would fall under the "Other" causes, which historically are substantial at 8.7% and in the QRA are estimated at 4.7% or equivalent to operational causes of ruptures. Although a discussion on terrorist - induced pipeline failures is germane, there is no justification for assigning a specific causal component proportion to these. 3.6 Vl. Probabilities and Possibilities — Types and Events Under leaks, the SJFD RA states "the highest probability in the event of a leak is that the leak will become a rupture very quickly." This is incorrect — leaks remain as leaks until detected and repaired. If the SJFD RA statement were accurate, the probability of ruptures would be at least as large as that of leaks, rather than the historical fact that ruptures are at least 10 times less frequent than leaks. In the course of our meetings, we were advised that the SJFD now understands and accepts this fact. The SJFD RA suggests that it generally accepts the QRA hazard and consequence evolution analysis. 3.7 Vll. Documented Natural Gas Pipeline Incidents The SJFD RA presents a table of U.S. and Canadian pipeline incidents. It fails to point out that no casualties occurred for any of the Canadian incidents. The major differences between the U.S. and Canadian incidents cited are discussed by Bercha elsewhere-, the differences are such that one would not expect such incidents from the proposed Brunswick Pipeline. Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 3 Attachment 8 The SJFD RA presents extensive information on pipeline failure- induced casualties in the United States. The pipeline industry in the United States does not have the same safety record as the Canadian industry, which is superior. In Canada, for example, there has never been a public fatality due to an incident respecting an NEB regulated pipeline, and there has only been one worker fatality, which was over 20 years ago. The dates presented for the United States show 60 fatalities over the same period. The use of data from the United States presents a dramatically different picture of the safety record of the industry than if applicable Canadian data had been used. There is no rationale provided for the use of U.S. data or comment made on Canada versus U.S. differences. 3.8 Vlll. lmpacUConsequence of the Worst Case Failure Event — Saint John The SJFD RA indicates that the worst case event is a rupture with immediate ignition. In fact, the QRA indicates a somewhat delayed (3 minutes) ignition of a rupture release is the worst case; and it demonstrates this in Table 4.3, where, for example the greatest hazard distance for high intensity radiation is 876m. A QRA calculation of the comparable greatest hazard distance for immediate ignition indicates only 114m, the approximate radius of a fireball effect. Also, radiation from such a fireball is generally highly transient, lasting tenths to a few seconds and often inhomogenous so that a complete area is not affected. It is not clear why the SJFD RA failed to identify the worst case accurately given the analysis provided in the QRA. 3.9 IX. Response and Consequence Analysis — Saint John The SJFD RA uses the acronym HCA for Hazard Consequence Area while in risk analysis HCA is an acronym for High Consequence Area (CFR 195.452). Here we will use the acronym CA for what the SJFD RA means by HCA to avoid the misleading conclusion that every consequence area is a high consequence area. The SJFD RA identifies a critical zone of 300m as the CA. It incorrectly states: "300 meters each direction from the perimeter of the proponent's preferred corridor and (given the worst case event), anyone that is within 300m will receive serious or fatal injuries ". This is incorrect because: (1) people sheltered and people in transient flame zones (which is most people in the zone) would not be seriously hurt, and (2) because the immediate ignition zone of effect is over a 114m radius, not 300m. As indicated above, if there is an immediate ignition, high thermal radiation occurs only out to 114m. If the worst case were selected from strictly QRA consequences, then the distance to the furthest acute isopleth would be downwind (not in all directions) approximately 850m. In any case, if one bases a response zone on risk levels, 300m is a reasonable estimate for the emergency preparedness zone (EPZ) based on the QRA results, which Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 8 at 300m show an individual risk level of just over not a "serious or fatal injury" zone. October 20, 2006 Page 4 in 10 million. But 300m is definitely Reference is made to the Tracey Appendix 1 — all probability and scenario claims in this have been refuted as described elsewhere in Attachment 9. 3.10 X. Review of Bercha Group's Quantitative Risk Analysis Document The SJFD RA generally agrees with the QRA, although Appendix 1 greatly differs with the QRA. As noted above, the Tracey Appendix 1 has been fully refuted in Attachment 9. The SJFD RA notes that effects of natural forces were partially reduced relative to the historical data proportion in the QRA. This reduction was made due to the expected geophysical stability of the pipeline location. SJFD RA suggests accelerations from blasting at Bald Hill may exacerbate the effect of geophysical forces; we believe this is incorrect and understand that accelerometer measurements in the vicinity of the route will be taken to demonstrate this. 3.11 Xl. Input from Other Sources Mr. Tracey's criticisms of the QRA have been fully rebutted. The concerns of SJ Energy, SJEMO, and SJ Water, are being addressed through discussions between their personnel and appropriate Emera Brunswick personnel. 3.12 Xll. Finding and Concerns The SJFD RA states: " 1. There are a number of transmission line failures in North America each year. 2. When there is a failure of a transmission line, it is often catastrophic. 3. Given that the vast majority of transmission pipeline infrastructure is located in rural areas, failures to date have occurred in these areas; the consequences of these failures are not comparable to what could happen in an urban setting. 4. Given the footprint of a pipe line failure and its Hazard Consequence Area (HCA), in comparison to that of an industrial /residential property, the operational challenges associated with mitigation are significantly greater." In regard to 1, Canadian experience should be used. There were no transmission line failures under NEB jurisdiction in the last 3 years, and there have been in the order of 1 or 2 per year in prior years. In regard to 2, this is totally incorrect. In fact, most transmission line failures are leaks which are inconsequential; and there has never been a catastrophic failure causing public fatalities in the history of Canadian transmission lines. In regard to 3, there are extensive lengths of transmission lines in urban locations (see Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 5 Attachment 8 Attachment 2); and although there have been numerous leaks in these, there has been no reported damage or casualties. In regard to 4, we agree that for the SJFD, the CA challenges are different (but not necessarily greater) than what they are used to. We believe that with proper orientation, discussion with FD personnel in jurisdictions where pipelines are common (such as Edmonton), and with cooperation among the pipeline operators and all stakeholders, these challenges will be diminished. 3.13 Xlll. Recommendations Recommendations have been discussed between Emera Brunswick and the SJFD, and have (we understand) been largely resolved. Emera Brunswick's reply to the SJFD RA recommendations is addressed in Section 3.2.4 of this Reply Evidence. We only comment here specifically on #4. Recommendation 4 was based on a misunderstanding by the SJFD regarding the probability of true explosions (detonations). A true explosion requires a critical mass of flammable gas, a hard ignition source, and containment. As portrayed in the event tree in Figure 5.7 of the QRA, such a set of conditions is not expected to occur in 98% of cases given occurrence of a rupture. And, in fact, from an inspection of the proposed corridor, no locations where this could happen were identified. On the basis of our discussions, we understand that the SJFD now understands this point and has withdrawn this recommendation. 3.14 XIV. References It would be useful for the SJFD to review the QRA references which are directly relevant to the SJFD RA. 3.15 XV. Appendix 1 — Sean Tracey, Canadian Director of NFPA Dealt with in Attachment 9. 3.16 XVI. Appendix 2 — NFPA 1600 Dealt with in Section 3.2.4 of this Reply Evidence. 3.17 XVII. Appendix 3 — Andrew Easton, Dir. of Securities & Emergencies Directorate Dealt with in discussion of VI. 3.18 XV111. Appendix 4 — Canada's Critical Infrastructure No comment needed. 4. Conclusions Generally, the transmission pipelines cited that experienced failures were constructed prior to 2000 and most of these in the 1960's and 1970's. Since that time, materials including line pipe and protective coatings have improved a significantly. Regulators Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 8 October 20, 2006 Page 6 now require the development of integrity management programs and monitor their implementation. Internal inspection procedures have been developed to the point where they have become industry practice, and are highly reliable and occur regularly. The Brunswick Pipeline urban segment will be further protected from third party damage because it will be embedded with sand in a rock ditch. In conclusion, incidents capable of significantly harming SJ public and property should not be expected to occur from the Brunswick Pipeline, but an emergency response plan should be developed and implemented in the remote likelihood that such incidents occur. Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 1 Attachment 9 ATTACHMENT 9 REPLY TO APPENDIX 1 OF SAINT JOHN FIRE DEPARTMENT RISK ASSESSMENT "COMMENTS REGARDING A PROPOSED LNG PLANT AND NG PIPELINE IN SAINT JOHN, N.B." BY SEAN A. TRACEY By: Bercha Engineering Limited Introduction This document reports the results of a review of Appendix 1 by Mr. Tracey to the Risk Analysis by the Saint John Fire Department. As authors of the Emera Pipeline QRA, the reviewers focus on the sections dealing with pipeline risk assessment. 2. General Comments on Appendix 1 The LNG plant was not part of the Bercha QRA so sections dedicated to it are not considered in this review. Appendix 1 deals with the following in relation to the Brunswick Pipeline: • The first 3 sections, Background.... LNG Plant..., and Regulatory approvals give some general but incomplete information • Hazards of the Product under pipelines provides some information that is valid but mixes leaks and ruptures and again is incomplete • Probabilities and Possibilities suggests that ruptures will be dealt with but this is not so as leaks are again included with ruptures in the following sections • Risk Assessments - Mr. Tracey ignores the essential results of the risk analysis which are, not surprisingly, the risks to the public. In the QRA, these have been quantified and found to be in the acceptable region using a methodology that integrates the effect of significant risk factors including pipeline failure types and rates, location characteristics, consequences and consequence evolution including ignition, damage criteria, and human exposure factors. Mr. Tracey, however, attempts to extract various intermediate results, incorrectly and in a piecemeal fashion, to try to show arbitrarily that elements of the analysis give unacceptable results and therefrom he reaches the incorrect conclusion that the QRA underestimates risks. Specifically, Mr. Tracey: argues against the credibility of fault tree analysis inputs commonly used for increasing the applicability of historical data to specific situations; Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 9 October 20, 2006 Page 2 then proceeds to incorrectly estimate the occurrence of a significant pipeline failure using incorrect assumptions and a faulty method providing a meaningless and grossly misleading conclusion; and finally concludes that based on his incorrect assumptions and faulty methodology, results of the Bercha QRA are invalid • The balance of the discussion in Appendix 1 is general, and when dependent on Mr. Tracey's faulty probability results is of limited value. 3. Key Assumption and Methodology in Mr. Tracey's Risk Assessment Mr. Tracey assumes the following: • Historical data as analyzed do not apply to the proposed pipeline; • Significant pipeline failures include leaks; • The probability of failure of a system with a constant failure rate in a given number of exposure units (such as km -yrs) is simply the product of the failure rate and the number of exposure units; and • Failure probabilities alone determine risks to the public- rather they constitute one element of a robust and complex model for the integration of risk factors leading to the estimation of risks. All of these assumptions are incorrect. The method of analyzing historical data and the assumptions made are well founded and constitute a refinement to the analysis to make the results more realistic. However they do not substantially change the results. This analysis can be substantiated from review of the NEB incident reports discussed elsewhere. In any case, the historical data without adjustment give substantially the same risk results. Leaks are small inconsequential releases which occur fairly frequently for most pipelines. They usually do not pose a hazard to public safety and therefore should not be included in the estimate of significant pipeline failures. The release orifice used (1 cm) in the Bercha QRA is a very conservative value; most leaks are pinhole orifices which pose no hazard to public safety. Including the leaks in the significant failures results in roughly a ten -fold increase in the failure frequency for both historical and derived significant failure frequencies. Inclusion of the leak frequency in the estimate of significant failure probabilities is the most incorrect assumption made by Mr. Tracey. Calculation of the probability of 1 or more or at least one occurrence of failure of a system with constant failure rate in a period of n km -years is calculated by the following formula: Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 9 P = 1 - (1 -p)" Where: • P = Failure probability p = Annual per km constant failure rate n = Number of km -years in estimation exposure October 20, 2006 Page 3 Clearly this formula for values of p less than 1 and greater than zero (any significant failure rates) will give positive values less than unity. Mr. Tracey simply multiplies the failure rate by the number of years and kilometres giving his result of 97% probability for a 50 year 40km exposure. That this approach is incorrect is illustrated by an example in which the exposure number is such that the product gives a number greater than one, which gives a probability greater than one so it is clearly flawed. For example, take Mr. Tracey's 4.87 per 10,000 km yrs but use an exposure of 100 years (rather than his 50 years) and 40 km. This gives the surprising value of probability of 1.96 or 196 %. Probability by definition cannot exceed 1.00 or 100 %. A slightly higher exposure period of say 60 years yields the strange result of 117% probability. Mr. Tracey's methodology has no merit. And finally, failure probabilities alone do not determine risks to the public. Rather they constitute one element of a robust and complex model for the integration of risk factors leading to the estimation of risks. In the QRA, risks have been quantified and found to be in the acceptable region using a methodology that integrates the effect of significant risk factors including pipeline failure types and rates, location characteristics, consequences and consequence evolution including ignition, damage criteria, and human exposure factors. 4. Correct Failure Probability Values The purpose of the Bercha QRA was to quantify public risks and it did this. No attempt was made to estimate the probabilities of pipeline failures over different segments and time periods although this information can easily be determined from the QRA using appropriate methods. It appears that Mr. Tracey focuses on failure probability using a faulty approach and erroneously equates his results to risk estimates. We will here rectify the probability component which Mr. Tracey incorrectly calculated. Appendix A gives the Bercha calculations for pipeline failure probability using different exposures. Table A.1 gives the failure probabilities for ruptures, holes and ruptures, and leaks and holes and ruptures for various exposure times for the estimated exposed urban Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 4 Attachment 9 segment length of 16.5 km. For the 50 year exposure the following probabilities of 1 or more failures of each of the 3 types are given: R 0.4% H and R 1.5% L, H, R 14% v Clearly the 14% is academic as it includes inconsequential leaks; the maximum significant release probability is 1.5% for holes and ruptures and we believe this is the value Mr. Tracey should have used to conduct his assessment correctly. Of course this is the probability of unignited releases, which are not hazardous: ignited release probability is lower. Table A.2 gives the same information but based on the unaltered historical failure rates giving the following: R 1.0% H and R 4.0% L,H, R 31% The 4% is the number Mr. Tracey should have presented had he used the correct method and correct urban length, but disregarded the historical data analysis as he did. Again these values are for unignited releases which are generally harmless. In regard to the historical data adjustments to better reflect local conditions, recalculation of the risks using the raw or unadjusted historical data have shown that the risks do not change significantly, increasing slightly, but still remaining in the insignificant region below 1 in one million. Finally if a 40 km exposure is used the correct calculation shown in Table A.3 give a 50 year H or R probability of unignited releases of 9 %. S. Conclusions The following conclusions can be summarized from the review • The LNG plant was not included in the scope of the Bercha QRA. We agree that others should carry this out for both onshore and offshore components. Mr. Tracey ignores the essential results of the risk analysis which are, not surprisingly, the risks to the public. Rather, Mr. Tracey attempts to extract various intermediate results, incorrectly and in a piecemeal fashion, to try to show arbitrarily that elements of the analysis give unacceptable results and therefrom he reaches the incorrect conclusion that the QRA underestimates risks. In contrast, the risks to the public have been quantified in the Bercha QRA Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 9 October 20, 2006 Page 5 and found to be in the acceptable region using a methodology that integrates the effect of significant risk factors including pipeline failure types and rates, location characteristics, consequences and consequence evolution including ignition, damage criteria, and human exposure factors. • Mr. Tracey misunderstands the significance of pipeline leak and rupture releases, apparently considering leaks to be a major hazard. • Mr. Tracey is not familiar with basic probability calculations as he uses an incorrect method for estimating failure probabilities for multiple km -year exposures. • The combination of the above gives incorrect and potentially grossly misleading numbers, which upon examination are meaningless. • Realistic results for leak and rupture probabilities for different km -year exposures are given in section 5 and Appendix A. A realistic probability for a significant pipeline failure event in a 50 year period ranges from 0.4% to 1.5 %. Without considering the historical data analysis, the range is 1% to 4% in the 50 year period for urban segments totaling 16.5 km. These probabilities are for the nonhazardous unignited releases; ignited release probabilities are lower. • In any case, failure probabilities alone do not determine risks to the public - rather they constitute one element of a robust and complex model for the integration of risk factors leading to the estimation of risks. The risks as reported by Bercha, and their significance, are unchanged by Mr. Tracey's work. Generally the discussion of pipeline risks in Appendix 1 is based on faulty assumptions and methodology, giving grossly incorrect and potentially misleading results. The discussion, therefore, lacks credibility and should be corrected or disregarded. Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 9 October 20, 2006 Page 6 APPENDIX A SUPPORTING CALCULATIONS CORRECT CALCULATIONS TABLE A.1 CORRECT CALCULATIONS WITH ANALYZED FAILURE RATES PROBABILITY OF 1 TIME URBAN R AND H PROBABILITY OF 1 TIME URBAN RUPTURES OR MORE # OF YRS L N P(N) # OF YRS KM /KM -YR P(N) 1 16.5 4.85E -06 8.0022E -05 10 16.5 4.85E -06 0.000799932 20 16.5 4.85E -06 0.001599224 50 16.5 4.85E -06 0.003993265 100 16.5 4.85E -06 0.007970584 200 16.5 4.85E -06 0.015877639 500 16.5 4.85E -06 0.039222664 1000 16.5 4.85E -06 0.07690691 PROBABILITY OF 1 TIME URBAN R AND H OR MORE L N # OF YRS KM /KM -YR P(N) 1 16.5 1.86E -05 0.000306856 10 16.5 1.86E -05 0.003064324 20 16.5 1.86E -05 0.006119258 50 16.5 1.86E -05 0.015228006 100 16.5 1.86E -05 0.03022412 200 16.5 1.86E -05 0.059534742 500 16.5 1.86E -05 0.142257574 1000 16.5 1.86E -05 0.26427793 PROBABILITY OF 1 TIME URBAN L,R,H OR MORE L N # OF YRS KM /KM -YR P(N) 1 16.5 1.81 E -04 0.002982314 10 16.5 1.81 E -04 0.029426071 0.40% 1.50% Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 9 20 16.5 1.81 E -04 0.057986248 50 16.5 1.81 E -04 0.13872249 100 16.5 1.81 E -04 0.258201051 200 16.5 1.81 E -04 0.44973432 500 16.5 1.81 E -04 0.775388976 1000 16.5 1.81 E -04 0.949549888 TABLE A.2 October 20, 2006 Page 7 CORRECT CALCULATIONS WITH HISTORICAL FAILURE RATES PROBABILITY OF 1 TIME URBAN H,R PROBABILITY OF 1 TIME URBAN RUPTURE OR MORE # OF YRS L N P(N) # OF YRS KM /KM -YR P(N) 1 16.5 1.27E -05 0.000209529 10 16.5 1.27E -05 0.002093319 20 16.5 1.27E -05 0.004182257 50 16.5 1.27E -05 0.010422868 100 16.5 1.27E -05 0.0207371 200 16.5 1.27E -05 0.041044172 500 16.5 1.27E -05 0.099473481 1000 16.5 1.27E -05 0.189051988 PROBABILITY OF 1 TIME URBAN H,R OR MORE L N # OF YRS KM /KM -YR P(N) 1 16.5 4.90E -05 0.000808193 10 16.5 4.90E -05 0.008052601 20 16.5 4.90E -05 0.016040357 50 16.5 4.90E -05 0.039619761 100 16.5 4.90E -05 0.077669796 200 16.5 4.90E -05 0.149306995 500 16.5 4.90E -05 0.33252938 1000 16.5 4.90E -05 0.554482971 PROBABILITY OF 1 TIME URBAN L,R,H OR MORE L N # OF YRS KM /KM -YR P(N) 1 16.5 4.50E -04 0.007399162 10 16.5 4.50E -04 0.07157596 14% 1% 4% Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 9 October 20, 2006 Page 8 20 16.5 4.50E -04 0.138028803 50 16.5 4.50E -04 0.310186189 100 16.5 4.50E -04 0.524156906 200 16.5 4.50E -04 0.773573349 500 16.5 4.50E -04 0.975603987 1000 16.5 4.50E -04 0.999404835 TABLE A3 CORRECT CALCULATIONS WITH HISTORICAL FAILURE RATES AND 40KM EXPOSURE 31% 9% PROBABILITY OF 1 TIME URBAN H,R OR MORE L N # OF YRS KM /KM -YR P(N) 1 40 4.90E -05 0.001958128 10 40 4.90E -05 0.01940964 20 40 4.90E -05 0.038442545 50 40 4.90E 05 _ 0.093353273 100 40 4.90E -05 0.177991713 200 40 4.90E -05 0.324302376 500 40 4.90E -05 0.624697913 1000 40 4.90E -05 0.859148343 31% 9% Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 10 ATTACHMENT 10 REPLY TO AN INDEPENDENT ANALYSIS OF THE PROPOSED BRUNSWICK PIPELINE ROUTES IN SAINT JOHN, NEW BRUNSWICK BY RICHARD B. KUPREWICZ (ACCUFACTS) By: Bercha Engineering Limited 1. Introduction October 20, 2006 Page 1 The purpose of this document is to comment on the above Analysis and rebut points with which we differ. The Analysis was carried out by Mr. R. Kuprewicz with reference to the "Quantitative Risk Analysis of the Proposed Brunswick Natural Gas Pipeline" (The QRA) Bercha Group, February 14, 2006. The Analysis, as implied by the title, deals largely with pipeline route selection, but also takes issue with the QRA of the proposed onshore pipeline route. In the balance of this document, discussion is restricted to those aspects dealing with the QRA. 2. General Discussion of Evaluation Mr. Kuprewicz appears to have expertise in public regulatory and risk communications related to pipelines but demonstrates limited expertise in pipeline quantitative risk analysis. Much of his commentary is based on his generic interpretation of the QRA and other reports on pipelines. The Kuprewicz document, partly because of the above shortcomings, is general and vague, with no quantitative substantiation for its claims. The lack of experience with pipeline risk analysis is further confirmed by his strong but incorrect and unsubstantiated claim that immediate ignition of a pipeline rupture natural gas release is the worst case. In fact, for a rupture, the worst case initial flow rate occurs neither immediately nor late, but in the first few minutes. It is interesting to note that the second critique of the Bercha QRA by Mr. Wreathall comes up with the diametrically opposite claim, that the worst case is the significantly delayed ignition -- -which is also incorrect as discussed in the relevant rebuttal. The two diametrically opposite and incorrect claims by two reviewers cast doubt on both reviews. In the analysis, Mr. Kuprewicz sets out to show that the QRA is flawed by "understating the risks associated with an on -land route through the city." We differ with this opinion. In the balance of this rebuttal, sequential sections of the Kuprewicz analysis are addressed. Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 2 Attachment 10 3. Specific Issues 3.1 Vb Ruptures (p 13 -17) The discussion of ruptures is conceptually adequate although numerically incorrect. On page 13, Mr. Kuprewicz correctly states that rupture release flow velocity is restricted to the speed of sound, and several lines later contradicts this by giving the range of release flow velocities of 1,400 to 1,500 ft/sec," which is significantly higher than the speed of sound in air (1,087 ft/sec). Although this in itself does not significantly impair the argument, it casts doubt on Mr. Kuprewicz's analysis. Mr. Kuprewicz extensively reproduces aspects of the Carlsbad pipeline rupture details on pages 14 to 17. However, he fails to mention the important statement from the US National Transportation Safety Board, which differentiates the Carlsbad incident from the Brunswick Pipeline, stating that: "Transportation Safety Board determines that the probable cause of the August 19, 2000, natural gas pipeline rupture and subsequent fire near Carlsbad, New Mexico, was a significant reduction in pipe wall thickness due to severe internal corrosion. The severe corrosion had occurred because El Paso Natural Gas Company's corrosion control program failed to prevent, detect, or control internal corrosion within the company's pipeline. Contributing to the accident were ineffective Federal pre - accident inspections of El Paso Natural Gas Company that did not identify deficiencies in the company's internal corrosion control program." In addition to the above, showing clear disregard for corrosion management by the operator, he fails to mention that the El Paso line was an aging system, designed for rural not urban conditions (including unlimited valve spacing, high stress levels, manual valve operations), under US regulatory jurisdiction (which Mr. Kuprewicz correctly points out is less stringent than Canadian), inadequately maintained, inspected, and monitored, - - -in so many ways different from the proposed Brunswick Pipeline as to disqualify its rupture as a credible comparable occurrence. Thus, the reproduction of selective details of the El Paso tragic accident occupying 3 full pages (a reference with a summary of salient facts would suffice), and no comment on the distinguishing characteristics of that system from the huge repertoire of safe and successful high pressure natural gas pipelines in urban locations (see Attachment 2), appears to be an attempt to present a one -sided view of the pipeline safety picture. 3.2 Vbi Rupture Impact Zone Determination Mr. Kuprewicz states on page 17, (agreeing with our statement regarding the limited effect of segment length on blowdown rates in the first few minutes following a rupture) "Accufacts agrees with this statement, but we believe the critical factor for a rupture is time to ignition as early ignition generates the greatest heat flux and largest thermal impact zone most injurious or fatal to the public." Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 10 October 20, 2006 Page 3 It is not obvious how he arrives at this statement. The facts from the QRA are: Rupture delayed ignitions are assumed to occur in 3 minutes, however the maximum hazard zone from immediate ignition occurs for a jet fire and this is also included in the analysis. With respect, this may not be entirely clear from the QRA report -- -but on page 4.7 the first 2 bullets clearly state "delayed ignition times" which as one can see from Figure 5.7 (QRA page 5.13) lead to flash fire or explosion, while immediate ignition times lead to jet fires as the selected (maximum) impact hazard. We have modeled the fireball and associated thermal radiation, and found considerably smaller hazard zones as given in the table below. Please note that the acronym for ruptures has been corrected from the QRA report Table 4.3 by substituting "R" for "H" Maximum lsopleth Distance (m) Jet Fire Thermal Radiation (kW/ ) Explosion Overpressure (kPa) 50 20 10 35 25 7 R -M U 560 623 689 411 555 2090 R -MN 448 508 573 43 58 219 R -MS 572 63 702 182 246 926 Fireball Thermal Radiation (kW/ ) Explosion Overpressure (kPa) 50 20 10 35 25 7 R -MU 114 128 256 105 150 367 R'-MN 1 114 128 256 105 150 367 R -MS 114 128 256 105 150 367 ■ It should be noted that the hazard distances for the fireball are independent of the atmospheric stability conditions (MU,MN,MS) so that all 3 entries at each radiation level are the same — clearly the fireball immediate ignition hazards are smaller (e.g. 114m vs 560m) than the jet fire immediate ignition hazards which were used in the QRA. Therefore, the quoted claim by Mr. Kuprewicz that we have not selected the worst case hazard scenario is incorrect and not based on the facts given in the QRA. There also appears to be some confusion in the Kuprewicz analysis regarding the illustrative examples and the values actually used in the QRA. Mr. Kuprewicz states on page 17 "Figure 5 is also taken from the submitted Q R A " In comparing this "Typical" Jet Fire Thermal Isopleths (boundaries of constant heat flux), against Table 2, developed from information provided in the Bercha QRA, it appears that the QRA "Typical" Jet Fire Thermal Isopleths seriously confuse, misrepresent, and understate the thermal impact zones associated with a rupture." Clearly this is argumentative Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 4 Attachment 10 only, since he later implicitly accepts that, as stated in the QRA: "These graphics are shown primarily for illustrative purposes. The tabular results described below [Table 4.3] are the primary source of the consequence results utilized in this study" and in fact cites Table 4.3 as indicated above. So we can ignore this allegation. Finally, in regard to thermal loads used in the analysis, ones very similar to those cited by Mr. Kuprewicz were used -- -Table 4.1 is intended primarily to illustrate the effects of thermal radiation. The early ignition case is explained above, so needs no further comment here. 3.3 VI QRA and Gas Transmission Pipelines This section is general and unsubstantiated by any specific reference to the QRA or to other publications, other than the philosophical and excellent work on Three Mile Island by Perrow, which deals with hazards from new technology rather than those of well tested technology such as pipelines. The "QRA Application Test Questions" are desirable for discussion but fail to support in any way the claim that the QRA underestimates risks, particularly in view of the apparent risk scenario misjudgments and quantitative errors by Mr. Kuprewicz. 3.4 Vll Conclusions The only comment in Mr. Kuprewicz's conclusion not addressed above is the overlay of estimated impact zones on the proposed route. The mechanical process of overlay on routes is being done by the mappers. However, the important application of the juxtaposition of structural and demographic features with impact zones, to define the emergency planning zone and the ERP is being undertaken jointly but stakeholders including the SJFD, the first responders, and the pipeline proponents. This essential component of risk management, the ERP, is not part of the QRA scope but rather, as recommended in the QRA, is one of the most important applications of the QRA results. 4. Conclusions The QRA clearly defined potential impact zones, used appropriate damage criteria, and based its results on the worst case scenarios, thus resulting in conservative but realistic estimates of the risks. Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 1 Attachment 11 ATTACHMENT 11 REPLY TO EVALUATION OF QUANTITATIVE RISK ANALYSIS OF THE PROPOSED BRUNSWICK NATURAL GAS PIPELINE, BY THE BERCHA GROUP (REPORT P2509, FEBRUARY 14, 2600) BY JOHN WREATHALL (JOHN WREATHALL & CO., INC.) By: Bercha Engineering Limited 1. Introduction The purpose of this document is to comment on the above Evaluation and rebut points with which we differ. The Evaluation was carried out by Mr. John Wreathall with reference to the "Quantitative Risk Analysis of the Proposed Brunswick Natural Gas Pipeline" (The QRA) Bercha Group, February 14, 2006. 2. General Discussion of Evaluation Mr. Wreathall appears to have expertise in nuclear, health, and some process applications of risk analysis but lacks expertise in pipeline risk assessment. This is evidenced by his attempt to exemplify natural gas pipeline accidents with polyethylene plant heavy gas industrial complex accidents (Section 3 Phillips 66), and by his general lack of understanding of linear risk source analysis. The Evaluation, partly because of the above shortcomings is general and vague, with no quantitative substantiation for its claims. Even in areas where we would expect Mr. Wreathall to be competent, such as the UK HSE risk tolerance criteria, he only offers negative comments with no useful suggestions (Section 4c). The lack of experience and competence with pipeline risk analysis is further confirmed by his strong but incorrect and unsubstantiated claim that a significantly delayed ignition of a natural gas release is the worst case. In fact, for a rupture, the worst case initial flow rate occurs neither immediately nor late, but in the first few minutes, after which the reduced flow if ignited poses little or no threat. It is interesting to note that the second critique of the Bercha QRA by Mr. Kuprewicz comes up with the diametrically opposite claim, that the worst case is the immediate ignition -- -which is also incorrect as discussed in the relevant rebuttal. The two diametrically opposite and incorrect claims by two reviewers cast doubt on both reviews. In the balance of this rebuttal, sequential sections are addressed. 3. Specific Issues 3.1 1. Frequency of pipe failure In relation to the fault tree analysis of historical date, Mr. Wreathall states" the Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 11 October 20, 2006 Page 2 applicant states that there is room for debate on these factors, and that, if no reduction were taken, the overall failure rates would be approximately double those used in the QRA but, nonetheless, the resultant risks "would be of no more or less significance in terms of risk acceptability than the ones given." (In the case of the suburban leak the increase is actually a factor of 2.5, and for the urban rupture the increase is a factor of 3.) Indeed the failure rates are approximately double - - -at 2.5 and 3 times. When the risk analysis was conducted with the unaltered historical data, substantially the same results were obtained. Specifically, individual risks for the urban case with the analyzed data inputs were .0.61 E -7 while those with the un- analyzed input data were 0.95 E -7. In risk terms these are both just below 1E-6 so they can be considered substantially the same. Mr. Wreathall says the analysis which we described in some detail (pages 3.6 to 3.14) "..is considered specious" but fails to substantiate his statement with anything but vague disputable suggestions. He suggests that we have not considered negative effects of changes or new developments in technology. We contend that usually new developments in technology reduce risk and increase reliability. Indeed, we have not explicitly considered such improvements thereby making our results more conservative. 3.3 2. Duration of re /ease for Rupture Mr. Wreathall states "Therefore the assumption that the release will be effectively stopped at 5 minutes is unsubstantiated. As a result, the potential for larger releases and explosions, such as directly affecting the population and structures at risk needs to be reconsidered, including the Saint John Regional Hospital since it would provide the care for any casualties resulting from such an event. " It is not obvious how he arrives at this statement. The facts from the QRA are: • rupture delayed ignitions are assumed to occur in 3 minutes, however the release continues until all gas in the pipeline is at atmospheric pressure which can be roughly 15 minutes for ruptures and in the order of one hour for holes. • Immediate ignitions, as the term suggests, occur quickly after the initial rupture. These were also modeled but are not the worst case. • We have assumed (page 4.12) that valve shut in is delayed by 15 minutes following rupture or hole. This, in fact, only occurs if the SCADA and /or shut -in sequence is compromised. if one models a rupture ignition after 5 minutes there is a much smaller hazard zone as much of the initially released vapour cloud is dispersed by then. The 5 minute ignition of a rupture has no impact at locations 600m downwind as the cloud is dispersed there by 5 minutes. Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 11 October 20, 2006 Page 3 From QRA Table 4.3 it is obvious that we have considered hazard distances in excess of 800m for ruptures. These occur for a 3 minute ignition. For a 5 minute or more ignition delay these hazard distances shrink significantly. Therefore the quoted claim by Mr. Wreathall above is incorrect and not based on the facts given in the QRA. 3.3 3. Consequence Analysis Mr. Wreathall contends that ignitions at 600 m are not considered (at hospital). Yet, clearly, flash fires reaching and therefore ignitable at locations in excess of 800 m are modeled and considered (QRA Table 4.3). At wind speeds of 5.2 m /second the gas cloud can reach 900m in 3 minutes. Next, Mr. Wreathall cites the example of the Phillips 66 polyethylene plant heavy gas release within a chemical complex in Pasadena Texas, 1989, and suggests this is a scenario that could apply to the proposed pipeline. Although this was a delayed vapour cloud ignition, it has no relevance to a natural gas pipeline release scenario - - -the Phillips 66 cloud was heavy gas (ethane, hexane, hydrogen -- heavier than air so it did not rise like methane), was released in a chemical plant where sequential effects were easily initiated, and came from a central point source. The suggestion that a similar incident could affect the Saint John hospital is totally incorrect. Mr. Wreathall's conclusion that the scenario we used is inappropriate, is incorrect and unsubstantiated. 3.4 4. Risk Assessment a. Completeness and Accuracy of Risk Assessment The concerns expressed by Mr. Wreathall in regard to frequency and consequence analysis in the QRA are dealt with in Sections 3.1 and 3.3 above. In regard to human performance, in the worst case, that of a compromised 15 minute valve closure, includes consideration of human error, system failure, or both. Mr. Wreathall also suggests that the QRA is incomplete because it does not deal with sabotage explicitly. First, there are no known incidents of natural gas transmission pipeline sabotage induced ruptures in North America. So there are no supporting data. However in the "other" cause category in our analysis, which allows for up to 11 % of all ruptures, there is adequate room for causes such as sabotage. Accordingly, the QRA should not be deemed incomplete as we have shown consideration has been given to shut -in failure, the reductions in historical data have been substantiated, and there is an allowance for other causes such as sabotage. Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 4 Attachment 11 b. Risk Acceptance Criteria Mr. Wreathall suggests we refer to generic concepts such as those by Fischoff and attempts to negate the criteria set out in the QRA, but fails to identify any pragmatic broadly accepted risk criteria such as those of the HSE in his country. We quote from Professor Fischoff "there are no universally acceptable options (or risks, costs, or benefits)" from his philosophical work on "Acceptable Risk," but in our previous study of his work, found little guidance on what we can use as broadly acceptable risk thresholds. In the QRA we are not suggesting the risk criteria we use are acceptable, rather we state " that the criterion we propose "is representative of that adopted by numerous Canadian oil and gas projects." It seems Mr. Wreathall avoids pragmatic criteria such as the HSE risk acceptability criteria in "Guidance on ALARP decisions in control of major accident hazards" 2006 which are in agreement with those the QRA uses for guidance. c. Collective and Other Types of Risks Mr. Wreathall suggests the QRA should have assessed the collective risks at the Saint John hospital. However, since the individual risks in the QRA were found to be insignificant and less than 1 E -7 or 1 in 10 million at locations such as the hospital, assessment of the collective risks would only show that these are also insignificant. 3.5 5. Conclusions Refuted in Section 3.1 2. Refuted in Section 3.2 3. Refuted in Section 3.2 and 3.3 4. Refuted in Section 3.4a 5. Refuted in Section 3.4b 6. Refuted in Section 3.4c 4. Conclusions The Evaluation of the QRA by Mr. Wreathall does not demonstrate its stated claim that the "QRA fails to demonstrate that the risks to the hospital and thus, to the community it serves, are acceptable." Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 1 Attachment 12 ATTACHMENT 12 REPLY TO INTERVENOR MARINE CROSSING EVIDENCE 1. Cost Estimate Mr. Horst Sauerteig takes issue with Emera Brunswick's marine costs and proposes costs of his own with respect to his suggested marine route. As stated in Emera Brunswick's response to Horst Sauerteig Information Request No. C62 -HS 1.7, estimated marine costs have increased. The cost for this item reflects order of magnitude increases based on recent quotes received for similar marine projects. The updated costs provided below confirm the volatility of the marine costs as referenced in the Application Section 4.3.2.3.1 on page 36. Categories (1) Preferred Corridor 2 ) Marine (May 2006 3 Marine October 2006 4 Urban Portion Pipe, Coatings 21.3 20.5 20.5 Misc. Fittings and Material 6.6 4.7 4.7 Installation 5 59.9 251.8 322.4 Engineering, Permitting and Project Management 21.3 26.1 26.1 Inspection, Non Destructive Testing, Survey 5.6 12.4 12.4 Legal, Regulatory, Marketing, PR, etc. ! 2.7 6.4 6.4 Contingency 6.2 48.0 58.7 AFUDC 5.4 49.7 160.4 Sub total urban 129.0 419.6 511.6 Rural 231.4 231.4 231.4 Total 350.4 650.0 743.0 Notes: 1 Categories from response to Fran Oliver C55 -FO 1.15 2 Total cost from Application Section 2.6 3 Total cost from Application Section 4.3.2.3.2, page 36 4 As stated in the response to Horst Sauerteig C62 -HS 1.7, estimated marine costs have increased. The cost for this item reflects order of magnitude increases based on recent quotes received for similar marine projects. 5 For the Marine May 2006 cost, the value is comprised of Marine - $118.9 million; HDD's - $92.9 million; and Onshore - 40.0 million. For the Marine Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 12 October 20, 2006 Page 2 October 2006 cost, the value is comprised of Marine - $176.4 million; HDD's — $106.0 million; and Onshore - $40.0 million. The cost estimate provided by Mr. Sauerteig in his evidence does not: (i) convert the costs in the PCS Report from US to Canadian dollars (Emera Brunswick used a 1.18 exchange rate); (ii) take the costs to as spent dollars (the calculations on the detailed estimate for the Brunswick Pipeline resulted in an approximately 8% inflation increase); and (iii) include all the items noted above. Also, in the estimate provided by Mr. Sauerteig, he references a cost of approximately $3 million to complete the two beach approaches (Section 5(e)(i) of his evidence states: "I carried $53 million to allow for the 2 Open Cuts...". From this, subtract the 50,009,861 listed earlier in the reference for the mobilization, demobilization and installation of the marine crossing). Emera Brunswick prepared a cost estimate for the two open cut beach approaches of approximately $10.5 million for the approach near Canaport and $13.3 million for the approach near Sheldon Point. Emera Brunswick reviewed the approaches with both PCS and AK, and forwarded a description of work, mapping and photographs to an experienced Canadian marine contractor to obtain their input. The combined input was used to prepare the above estimates for open cut approaches. Based on the methodology used by Emera Brunswick to prepare its estimates, the validity of the ... "generous assumption of an anticipated cost..." (Reply from Sauerteig to Emera's IR, Preamble item (d)) of approximately $3 million is highly suspect. 2. Marine and Land Based Pipelines A pipeline is a link between a start point and an end point. In other words, a pipeline goes from Point A to Point B. If both Point A and B are offshore, then a marine pipeline is a necessity. For example, the Highlander pipeline once proposed for offshore Nova Scotia or any other offshore header pipeline. Similarly if either Point A or B is offshore, then a marine pipeline is a necessity. Examples include pipelines in the North Sea, Gulf of Mexico, Cook Inlet of Alaska, offshore Nova Scotia, and other areas that connect offshore wells to onshore facilities. The Irving monobuoy pipeline is another example. The proposed Brunswick Pipeline connects two onshore points — the CanaportTm LNG Terminal, and a point on Maritimes & Northeast Pipeline in the US. The interconnect point of the Brunswick and Maritimes pipelines is in the St. Croix River, but this should not be represented as an offshore location. For a pipeline of this type, all alternatives Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 3 Attachment 12 need to be evaluated as Emera Brunswick did for the various routing alternatives put forward in the Application. These alternatives need to be evaluated on all aspects of safety, environmental impact, cost, impact on schedule and technical feasibility. The preferred route is the best overall route when looking at each of the above aspects. 3. Cook Inlet Pipelines The Cook Inlet pipelines were referenced in the Accufacts report. A few additional pieces of information about those pipelines are as follows: The Cook Inlet pipelines are mostly gathering lines to offshore wells therefore there is no land based alternative. The weather and tidal conditions described by Accufacts are correct and contributed to construction and operational problems on these pipelines. The most significant problems encountered during installation of at least some of the Cook Inlet pipelines were because the pipeline routes were forced to be perpendicular to the strong currents generated by tide changes because of relative positions of initiation and termination points. The lay vessels, of necessity, were broadside to the current, which required significant additional anchors on the up- current side, and additional tugboats to maintain barge position against the tide. While this configuration is certainly feasible, it compounds the installation challenges by having to coordinate more numerous pieces of equipment. Several times, the pipelay stingers were actually broken by the transverse tide forces. This difficulty would be compounded if the proposed Brunswick Pipeline were laid offshore, because a more massive stinger would be required for the larger diameter pipeline. The pipelines in Cook Inlet are mostly less than 12" in diameter. Different issues with 30" pipeline make the proposed Brunswick Pipeline much more challenging and risky to install. Primarily because the larger diameter pipeline is much "stiffer ", it makes shallow water installation particularly challenging. In deeper water, the surging (linear fore and aft displacement) motion of the laybarge is absorbed by the "S- shape" profile formed by the pipeline as it leaves the stern of the laybarge. The smaller diameter pipelines, being more flexible, will more easily absorb this barge motion in shallower water, whereas the larger diameter pipeline will act more like a stiff beam and any surging motion, whether caused by seas, swells, current or barge movement due to pipelay operations typically translate into the pipeline "running" fore and aft in the assembly line. Not only is quality welding more difficult, but an extremely dangerous work environment may be created for personnel working on the laybarge. Furthermore, if the running movement of the pipeline is in any way impeded (tension machine cannot "pick -up" quickly enough), and the forward end of the pipeline contacts an immovable object (handrail, stanchion, even Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 4 Attachment 12 a line -up station roller), then the pipeline may be buckled, which always results in significant recovery and repair problems. Some Cook Inlet pipelines were installed with a stiff- or truss - stinger that was sized for the smaller diameter pipelines. (A stinger is a structural framework that supports pipeline rollers used to guide the pipeline to the seabed during marine pipelay.) The Cook Inlet stingers of which we are aware were further modified by installing a skid assembly at the bottom or aft end of the stinger to allow it to safely drag along the seabed in locations of extreme shallow water. 4. Schedule Mr. Sauerteig suggests that the Emera Brunswick can plan for an in- service date as late as November 1, 200924. That is not the case. The Precedent Agreement between Emera Brunswick and Repsol initially allows for an in- service date between November 1, 2008 and August 1, 2009. This 270 day in- service window will be narrowed down to a specific date as the project moves forward. The window will next be narrowed to 180 days, then eventually to a specific date. Each successive smaller window must be within the bounds of the previous window (i.e. the next window can start no earlier than November 1, 2008, nor end later than August 1, 2009. The implication to the project is that it must always be working towards the earliest date that in service could be required. From the PCS Report, the duration of construction on the marine section of a proposed pipeline would be 214 days. Following completion of marine construction, there would be approximately 14 days to complete tie -ins to the two shore approach sections and to complete final commissioning of the entire pipeline and purge /pack with gas. From the above durations, marine construction would have to start in early March 2008, with equipment mobilization two months prior in early January 2007. This assumes that all required permits and clearances would be obtained for a corridor with a marine component prior to late 2007. This also assumes that the construction can proceed uninterrupted through the April 1 to June 30 lobster season. This assumption has not been vetted through environmental agencies, nor through any associations of fisher or lobstermen. If construction had to be interrupted for any part or all of the lobster season, the start date for mobilization and construction would have to be earlier, and the cost of the downtime is not included in the estimate. This schedule information backs up the statement that the schedule would have a high degree of risk as the initial few months of mobilization and construction would be in winter conditions that could be severe. In his evidence, Mr. Sauerteig takes issue with the estimated 40% downtime used in the PCS report. To ensure everyone is of the same understanding, downtime is not equivalent to equipment and personnel being completely shut down. The estimated duration and cost of the project is initially based on performing the work without any 24 Sauerteig Evidence, at p. 7, para. 5(d). Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 5 Attachment 12 delay or interference from weather related conditions — in effect construction on a clear, sunny day with calm seas. Downtime is defined as delays to the construction activities resulting from seas, winds, currents, snow, ice, fog, etc. These delays may result in complete cessation of ongoing marine construction activity, or may cause an ongoing activity to be performed less efficiently than planned. As reference, contractors working in the Gulf of Mexico historically experience 10 — 15% downtime due to weather in summer months, a year round downtime average of 25% and a 50% winter downtime due to persistent winter storms and prevailing swells. Duke Energy experienced similar downtime as a percentage of work while constructing the Hubline project in Massachusetts Bay. The 40% downtime estimated for a marine crossing of the Saint John Harbour is based on the 25% year round average with an additional allowance for the weather conditions anticipated in Saint John. These include delays caused by current resulting from the substantial tidal conditions, sea conditions, fog, snow and ice. 5. Fishermen Mr. Saurteig states in his evidence (para. 5(c)) that estimates from knowledgeable persons place the number of professional fishermen who at one time or another might work in the Saint John Outer Harbour at about ten, maybe less. Please see below a copy of a letter from the Fundy North Fishermen's Association, noting their opposition to a marine route and indicating that, with respect to the lobster fishery, the region that would be crossed by the marine route "...is fished in both seasons by roughly 8 boats (though up to 60 boats may be fishing in the general area of the inner and outer harbour in the spring season)." July 13, 2006 Ernest V. Shields Manager- Birmingham Operations Project Consulting Services, Inc. One Perimeter Park South, Suite 330N Birmingham, Al 35243 USA Emera Brunswick Pipeline Company Ltd. October 20, 2006 GH -1 -2006 Reply Evidence Page 6 Attachment 12 Dear Ernie, After discussions with the Fundy North members that fish inner Saint John Harbour, our association is clearly opposed to a marine gas pipeline route for a number of reasons. With one caveat, we favour the tunnel option for the pipeline. Both the proposed Northern and Southern Routes run through good lobster grounds throughout its length. The lobster fishery is by far the most important fishery today in the area accounting for 75- 100% of local fishermen's annual income. There are two lobster seasons here, mid November to mid January, and April 1 to end of June. The region crossed by your proposed pipeline routes is fished in both seasons by roughly 8 boats (though up to 60 boats may be fishing in the general area of the inner and outer harbour in the spring season). Each boat would fish up to 150 traps in that area each season. An average haul is $300 per trap per season. A very rough estimate, based on today's situation, is a $90,000.00 loss of income per year if fishermen are not allowed to fish over the pipeline or are unable to fish during construction of the pipeline. It is important to note that fisheries change significantly over time. 30 years ago there would have been 25 boats fishing that portion of the inner harbour and fishing most or all of their gear there. There are more fishermen today pursuing the lobster fishery than ever before, especially in the Saint John region. Boats from as far away as Campobello Island and Alma are now fishing for lobster in Saint John Harbour, because the fishing is very good there presently. In a few years lobster fishing patterns could change and /or another species could become the big cash crop. The fishery has always been very dynamic and therefore it is our position to oppose all projects that result in a loss of access to fishing grounds for our members. Upon reading the pipeline proposal, we were struck with the tunnel possibility. We feel this route would provide the most minimal impact on all stakeholders with one proviso. Our members are very concerned about where the dredge spoils will be disposed of. We are very opposed to the dumping of marine dredge spoils at Black Point in the Harbour. We have been working with DFO and Environment Canada for the past 2 years on a research project which concluded that dumping at Black Point kills, maims and stresses lobsters. And that there is an important lobster migration path that runs right across the Black Point site (both adults and juveniles). The result is potentially large numbers of lobsters are being harmed throughout the dumping season. We are very opposed to any increase in the use of Saint John Harbour for ocean dumping. We feel that the tunnel option is a very good one provided all dredge spoils are dumped on land. Thank you for you time and interest, and please let us know if we can provide any further information. Sincerely, Maria Recchia Staff for Fundy North Fishermen's Association 6. HDD Beach Approaches In his evidence (para. 4(d)), Mr. Sauerteig proposes a marine route that dispenses with HDD shore approaches and replaces them with Open Cuts. The applicant used prudent engineering and environmental analysis when it made the assumption that the permitting agencies and key stakeholders would require an HDD for the shoreline crossings and that an open cut would not be the preferred option for the reasons described below. It has been our experience that prior to regulatory agencies considering granting permission to cross a shoreline with an open cut method, the applicant needs to demonstrate that an HDD is not viable based upon the results of Emera Brunswick Pipeline Company Ltd. GH -1 -2006 Reply Evidence Attachment 12 October 20, 2006 Page 7 geotechnical and geophysical surveys or that while an HDD shoreline crossing may have initially appeared viable, the method failed during the attempt to execute the drill. Typically, the permitting agencies have indicated that an HDD is the preferred method for beach approaches since it results in less environmental impact. The following are some of the items typically considered when determining preferred shoreline crossing methodology: • Reduce ground disturbance (onshore and offshore), • Reduce turbidity in the water column which could effect shellfish, • Reduce impact to the benthic community, • Reduce change in near shore contours, • Reduce erosion problems on the beach, • On -going maintenance required in the near shore area due to erosion, • Reduce effects of blasting (if required). From an engineering standpoint an HDD should eliminate any issues associated with blasting in the nearshore area (should it be required) and the extensive dredging that would be required to obtain the necessary cover over the pipeline. An HDD would also eliminate on -going erosion issues in the shoreline crossing area caused by tidal changes and severe storms. ILA# e BRUNSWICK PIPELINE An Emera Companc Brunswick Pipeline responds to Fire Chief's risk analysis recommendations At Brunswick Pipeline, and all Emera -owned companies, the safety of the public and our workers is our first priority. We are committed to working with landowners and community leaders and are confident we can address concerns through ongoing dialogue and cooperation. An underground transmission pipeline is the safest and most environmentally friendly way to transport large volumes of natural gas. A feasible pipeline route that is safe and respects the environment is essential to support development of the CanaportTM LNG terminal. In late September, Saint John Fire Chief Rob Simonds presented the Saint John Fire Department's risk analysis report to Saint John City Council, in which he made a number of recommendations for measures that would help address various public safety concerns relevant to the natural gas pipeline corridor proposed by Brunswick Pipeline. Eight recommendations were directed at Brunswick Pipeline and two were directed at the City of Saint John. City Council voted to adopt the recommendations. Since that time, Brunswick Pipeline officials have continued to work cooperatively with the Fire Chief and other City officials to deal with as many of their concerns as possible. We have thoroughly discussed the various recommendations in the original report, while at the same time reviewing the research and analysis used to arrive at risk conclusions. On October 23, 2006, the Fire Chief and City Manager filed an Update Report with City Council on the status of the our joint discussions and Brunswick Pipeline's official response to the recommendations put forward in the September 22 Risk Analysis prepared by the Saint John Fire Department and which are outlined below. Brunswick Pipeline confirmed a number of commitments in response to the recommendations, and these commitments, as outlined below, have now been presented to Council by the Fire Chief. Recommendations (Emera) SJFD and officials with SJEMO continue to meet with Emera Brunswick's representatives with the objective of resolving the concerns identified in this Risk Analysis; should the parties fail to come to an agreement on resolutions to the concerns; Common Council direct the City Manager and appropriate staff to present the remaining concerns to the NEB for final disposition. Brunswick Pipeline Commitment in Response to Recommendation #1 ➢ Brunswick Pipeline welcomes the opportunity and is committed to working with the Saint John Fire Department (SJFD), the Saint John Emergency Measures Organization (EMO) and other City representatives with the objective of resolving the infrastructure concerns identified. Brunswick Pipeline commits to, in consultation with City officials, special design solutions for the proposed pipeline where critical City of Saint John or third party infrastructure is in close proximity to the final pipeline location within the Brunswick Pipeline proposed corridor. These solutions could include added pipeline burial depth, increased separation distances and other pipeline or infrastructure protection measures. These will be in accordance with good engineering practice, national engineering design codes and NEB regulations. .../2 -z- 2. The proponent (Emera Brunswick Pipeline Company Ltd.) provide hands -on tactical training for natural gas transmission pipeline emergency response to all Saint John Fire Department personnel (such courses to be funded by the proponent on an ongoing basis). Brunswick Pipeline Commitment in Response to Recommendation 42 ➢ Brunswick Pipeline will at its expense and on an ongoing basis, engage SJFD staff in training for emergency response for natural gas transmission pipeline incidents. 3. The proponent will provide and pay for Command Staff - Incident Command Training for natural gas emergencies. Brunswick Pipeline Commitment in Response to Recommendation #3 ➢ Brunswick Pipeline will provide and pay for Command Staff - Incident Command Training for natural gas emergencies. 4. In recognition that the Bercha risk analysis document outlines structural collapse as a likely event ( Bercha, p.4.3), the proponent provide SJFD with funding to acquire full capabilities in NFPA 1670 competencies for structural collapse and technical rescue; This is to include all applicable structural collapse rescue equipment. (SJFD currently does not have such emergency response equipment). Brunswick Pipeline Commitment in Response to Recommendation #4 ➢ We understand that the SJFD has put this recommendation in abeyance to be discussed further during the detailed routing phase of the project if necessary. Generally, there is an improved understanding about the safety record of NEB regulated pipelines and the safety measures built into modern pipeline design, construction and operation which significantly reduce risk. The pipeline industry has advanced substantially over the past 20 years. Modern pipeline design, advances in metallurgy, improvements in maintenance procedures and pipeline integrity programs help ensure public safety and reliable service. 5. Should the NEB grant an operating permit for the proposed pipeline, then as a condition of operation (and in compliance with the Onshore Pipeline Regulation, 1999), the proponent be required to obtain the concurrence of the City of Saint John with respect to the development and implementation of the Emergency Response Plan (ERP) and related public safety requirements, to include public notification capabilities. The scope and nature of the ERP and related public safety requirements must fully comply with all aspects of NFPA 1600 - Disaster & Emergency Management and Business Continuity Programs. The costs associated with the development of the ERP shall borne by the proponent. Brunswick Pipeline Commitment in Response to Recommendation # 5 ➢ Brunswick Pipeline will engage SJFD and other first responders in southern New Brunswick in the development and finalization of an Emergency Response Plan. This plan will be compliant with regulatory requirements and achieve the concurrence of the SJFD. EBPC emergency planning, first responder training and public education will be subject to NEB requirements under the Onshore Pipeline Regulations, 1999 (OPR99) and CSA Z731. As a component of emergency planning, the Emergency Response Plan must also be subject to these regulations, which are consistent with all relevant aspects of NFPA 1600. .../3 -3- 6. The proponent provide or fund fixed site pipeline training props, to be situated at the Saint John Fire Department Training Academy. This is to include access to a defined supply of natural gas for training scenarios purposes. Brunswick Pipeline Commitment in Response to Recommendation # 6 ➢ Brunswick Pipeline further commits to initiating a series of exercises to build response capability within the first year of operation. ➢ Brunswick Pipeline will fund staff of the SJFD to attend the Natural Gas /LNG /LP Firefighting and Safety Training School offered by the Northeast Gas Association in Massachusetts. ➢ Brunswick Pipeline commits to systematically sharing with the City, results of operation, maintenance and integrity management system audits conducted by the NEB, subject to NEB concurrence. 7. Consideration be given to adding Mercaptan to the natural gas entering the pipeline so as to provide citizens with an olfactory warning of a leak or line breach. Brunswick Pipeline Commitment in Response to Recommendation # 7 ➢ Brunswick Pipeline will add Mercaptan to the natural gas entering the Brunswick Pipeline so as to provide citizens an olfactory warning if a gas release occurs. 8. Consideration be given to adding additional line blocking valves so as to minimize exposure to thermal energy should a ruptured line ignite (in the urban corridor). Brunswick Pipeline Commitment in Response to Recommendation # 8 ➢ With respect to Line Block Valves located along the urban portion of the Brunswick Pipeline, Brunswick Pipeline commits that if a rapid pressure drop is detected through the SCADA monitoring system by Houston Gas Control such that the Gas Controller is able to determine that a serious pipeline incident has occurred, the Gas Controller will initiate remote closure of the appropriate Line Block Valves. Initiation of valve closure in this situation will not require prior field confirmation. Brunswick Pipeline is examining the request to place an additional line blocking valve in the City. Recommendations (Common Council) It is recommended that: 9. Common Council give consideration to reinstating a Training Officer's position in Training Division. 10. Common Council give consideration to establishing the position of "Emergency Planner" within SJEMO. Brunswick Pipeline Commitment in Response to Recommendations # 9 &10 ➢ Brunswick Pipeline will help fund the re- instatement of a Training Officer position within the SJFD to the level of $25,000 annually. ➢ Brunswick Pipeline will help fund EMO planning costs in the amount of $50,000 on a one -time basis. This would support the integration of the Brunswick Pipeline in Saint John emergency planning. .../4 -4- Brunswick Pipeline is a 30 -inch diameter, 145- kilometre underground natural gas pipeline which would connect the CanaportTM LNG terminal at Mispec Point to the North American pipeline network west of St. Stephen, New Brunswick at the New Brunswick -Maine border. Brunswick Pipeline is owned by Emera Inc., an energy company based in the Maritimes. We are proud to support the addition of a new and abundant supply of clean- burning natural gas in our region. Thanks to some of the toughest industry regulations in the world, our country's pipeline network has an excellent public safety record. Over the past 20 years, pipeline safety has advanced substantially. There have been no fatalities caused by failures of NEB regulated transmission pipeline in Canada in the past 20 years. -30- For more information, contact: Steve Rankin Tel: 902 425 -4293 Email: srankin @duke - energy.com -Or- Nancy MacLeod Tel: 902 428 -6902 Email: nancy.macleod@emera.com