06/07/2012 12:57 EDT | Updated 08/07/2012 05:12 EDT

Saskatchewan doesn't do enough to police the pipeline industry, auditor says

REGINA - Saskatchewan's auditor says the government is not doing enough to police the spider web of pipelines criss-crossing the province and that could be putting the environment at risk.

Provincial auditor Bonnie Lysyk said in a report released Thursday that the Ministry of Energy and Resources doesn't have effective ways to ensure pipeline operators follow The Pipelines Act and other regulations.

For starters, Lysyk said, there should be more on site inspections and pressure tests when pipelines are being built.

She said another problem is that the ministry doesn't have a framework to monitor compliance once a pipeline has been constructed.

"It does not request copies of integrity, safety, or risk management processes used by pipeline operators. Without requesting and subsequently assessing this information, Energy and Resources will not know if pipeline operators properly maintain the pipelines or if a pipeline operator could adequately respond to an emergency event," Lysyk wrote.

Failure to follow regulations could harm people or the environment, she added.

Energy and Resources regulates more than 1,700 licensed pipelines, as well as 300 pipelines that are allowed by permit or were exempted under old provisions. These pipelines span 23,500 kilometres.

The auditor's report noted there haven't been any significant spills in recent years but said the number of minor spills has slightly increased over the last four years. Just under 250 spills were reported in 2011.

The auditor also pointed out that one quarter of all pipelines are more than 40 years old.

"We think that aging pipelines would naturally increase the risk that there is the potential for a leak or an explosion," Lysyk said.

Tim McMillan, the minister responsible for Energy and Resources, said the province has a good track record. He said the number of spills has been relatively consistent over the last 10 years, even though oil and gas production has gone up dramatically.

"Where she's recognized that documentation may need to be beefed up, we would agree with her. And we've already actually started to ensure that the documentation is in place," said McMillan.

The auditor also noted that the law currently exempts Energy and Resources from regulating the construction of flowlines — the smaller, shorter pipelines that connect a wellhead to a storage facility. The ministry estimates there are 68,000 flowlines with as many as 4,000 more being added each year.

"Since these can pose the same type of environmental and safety risks as pipelines, we recommended that the ministry consider seeking responsibility to regulate flowlines," said Lysyk.