Streamline Your Document Workflows with Pipeline Safety Management Systems for Planning

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good morning my name is Kathleen and I will be your conference operator today at this time I would like to welcome everyone to the line SMS evaluation tool webinar all lines have been placed on mute to prevent any background noise after the speakers remarks there will be a question-and-answer session if you would like to ask a question during this time simply press Start and the number one on your telephone keypad if you would like to withdraw your question press the pound key thank you Tony Cox ed director of safety and reliability government governance you may begin your conference thanks Kathleen thanks everybody for joining us for the next segment of our continuing tools webinar for the pipeline SMS tools and today we're going to focus on the effectiveness tool and the components that are in there we've talked about this tool in the past and given some high-level overview of it and today we're actually going to get into the details of the tool and how it's going to work we have one portion that we still have to work out and so we haven't posted the tool on website yet until we get that one detail worked out and as we go through the presentation we'll let you know what that area is that we still have to us sort out so today there are going to be three of us speaking I'm Tony Clark shut with Enbridge we'll have bill bird from RCP and Sam Menifee from API and we'll also be taking your questions and at the end if we aren't the right people to answer your questions we'll note them down and get an answer back to you so I'm just gonna quickly go through the agenda and what we're gonna cover today so in a moment we'll have the antitrust statement before we get rolling we're gonna talk about the evaluation tool the purpose we're going to give you some of the background as to how it was developed and then we have several slides that are going to actually go through the tool itself and talking about the two main components which is the element protocol and the and the PSMs kpi's and will then cover next steps and we will also spend a little bit of time at the end talking about the third party audit program this is api's program which uses the same tool and then we'll leave time at the end for group discussion Sam Lee give us the antitrust statement and then then we'll move on sure thanks Tony this is a ministry from API just gonna read the API antitrust guidelines for everyone it is api's policy to comply with the antitrust laws API staff and member company representatives should observe the following guidance no discussion or forecasting of prices for goods or services provided by or received by a company no sharing or discussing any company is confidential or proprietary information no discussion of any company's specific purchasing plans merger divestment plans production information inventories or costs no sharing or discussion of specific company compliance costs and less publicly available no agreement or discussion regarding the purchase or sale of goods or services such as the such decisions are independent company decisions no discussion of how individual companies intend to respond to potential market economic scenarios or government action discussion limited to generalities no disparaging remarks regarding specific vendors products or services if a discussion presents an antitrust issue razor concern immediately if the discussion continues announce that you are leaving the meeting because you have an antitrust concern and immediately report your concern to api's office of the general counsel and to your own company's counsel thanks Tony great thank you so I'm going to go through the evaluation tool overview before I turn it over to Bill so some of this may be a reminder for folks you'll notice that there are slightly different names for some of the things that we're going to talk about we made quite a few adjustments based on feedback that we've had from our test audiences but what we have been putting together is is one tool for evaluating the effectiveness of the elements the performance of the SMS and overall safety performance and that the two parts there is an element protocol so that's a series of questions that focuses on each of the elements and identifies the key things that are required to demonstrate performance in those elements and the element protocol is really the idea here is to get a good sense of how is an operator doing at a slightly higher level on each of those elements and the second part is the effectiveness evaluation and so that's where we look at the key performance indicators and score based on the performance on those key performance indicators we're using some common available key performance indicators this is the portion where they're still still in draft is to land on the actual KPIs we know how it's going to work we know how it's going to score but at this point we still have to land on the the actual kpi's we've got several of them picked but we don't have all of them and it's important that as we went through this development we really had some objectives that we wanted to ensure we met so the tools had to be simple and to use and understand and so far what was the feedback that we've had is doing a pretty good job there so the testers have found that yeah they can understand why those questions are being asked why those kpi's are used and that the results that are coming out of the tool match with kind of gut feel for and where I should be it's really important that this works for all scale of operators so small medium and large and we've had some test work from each of those areas the the way the tool gets used is a little bit different for each of those operators but it's it is it is usable for any size of an operator the Third Point point here around it needs to work for self-assessment and the third party audit or some other kind of audit approach we want to make sure that if if an operator is evaluating themselves using this tool that went and then they choose to use a third-party to audit their performance that it's the same tool it's so we don't want to be asking different questions we don't want to get different results there is going to be subjectivity involved where an operator may assess themselves slightly different than a third-party auditor would that's that's bound to happen and it's it's okay it's not designed to be a excuse me a hundred percent repeatable but it is it will work for both instances and we've done a little bit of test work to validate that and this tool needs to fit with the other tools that we've developed and there's a good overlap we've used some of the components of some of the other tools they do all fit together and those of you who are familiar with the roadmap that's on the back of the maturity model will there's a little bit of information there around how all those tools fit together the last point here is is also important one of the things that we need to be able to do as an industry is to show our industry performance and the trend in industry performance and we need to be able to do some rolling up of results and this tool will allow us to do that in a way that we can show industry performance without showing any individual operators performance those are the the main objectives that we've used to design this tool excellently Sam excellent there we go so I'm going to cover some of the background development I'm not going to hit everything that's on these two slides we have been working on this tool for quite a while since February we actually started a little earlier than that in 2017 and we've had a several different approaches to frame out the tool how to fit with all the other pieces that were going on in the implementation team and we looked at several other tools as well too to help us we did spend some time looking at the API P SS ap audit approach and the offshore cos maturity model as well so we looked at several other areas to see what we could take in terms of either general concepts or some of the details did also do some work with fins around an audit tool that finsih was considering developing and that work actually was very valuable to validate that going at this kind of approach at a level that is not right at the shell statements but is just above that he's probably going to be the most effective the results of the film's at work would indicate that doing this at a at the shell statement level is going to be less effective and we've had several people involved the team consultant there is is Bill who will speak in a moment we came up with with a tool in January of this year and we started doing some of the pilot testing with team members and we did some desktop tests I was involved in one of those we had one at planes and TransCanada also provided input and as a result of that testing we made some fairly significant changes to the tool itself we've also done a fair number of reviews with our larger team and we have taken some of the information that's developed elsewhere for instance for the KPIs to include in the tool next one please Sam we've got our final draft put together and we do have guidance to go with the tool itself so that's guidance for auditors or for an operator doing a self-assessment it works works for both we also had the PSS ap auditors review the tool and got their feedback from the point of view of an auditor using the tool how how easily or or difficult with this BD use and we have some really good feedback from them generally very supportive and we made again some few changes so we're now heading into some pilots of what we think is pretty well to finish tool we have recently had some test runs of the tool and again we've had really positive comments for that and some really good suggestions for how to improve the or how to reduce confusion when you're using it how to make it more obvious how to self assess and you know cleaning up the question where we don't have the right part of speech etc so there's still some work to do on the final detailed cleanup but it's really in very good shape right now and another key comment that we have at the bottom there we've had that comment from a couple people okay it's good enough let's start using and we will perfect we'll do our own plan do check act cycle on this as we start to use it and find out where we can improve it at this point I'm going to turn the microphone over to bill bird Bill's going to go through some of the components of the tool itself will show you a bit of a demo of the pieces of the tool and and then he'll turn it back to me for for some next steps bill over Q sorry thank you Tony yeah one thing that's been noteworthy during the development of these tools is we started out a couple years ago as a as the hazardous liquid industry team and so the original tools were developed with that those kind of vet focus and then earlier this year with the joint industry team where we're trying to consider all aspects are all segments of the industry so small little gas distribution companies to two large gas transmission and and you know all sizes on the transmission side and the distribution side so the larger team more voices more input which I think it's made a much better tool so what I'm gonna walk you through today we were we were hoping that we would be ready to release the spreadsheet and associated guidance document at the same time we had this webinar but unfortunately got a little bit more tweaking to do and and we don't want to release one that's 98% and then people start using it and then then we fix a couple of little things and we don't know what tool people are using so so apologies for not having it available for today but but I'll show you the the general structure of it and walk you through what's there and why it's that way and hopefully it'll make some sense to you so that when we do finally release a tool and probably a couple three weeks you know you'll you'll know exactly what you're dealing with so what I'm showing you on this screen is I'm sorry it's kind of an eye chart but I wanted to just show you the big pieces not the individual details so this is the first tab and if you could read the bottom left hand side you'd see it shows implementation scores and that's where we're asking for every one of the elements those 50 questions that Tony mentioned as to have you developed your programs to address this question or that question and so we have 50 big questions so you'll see in column a what I call the short question name so the first one of those is operating procedures and then if you look at the next column over you see that's under element 4 within RP operational controls in section 8 and then you see a long question in the cell below that now if you read that long question carefully you'll see that it has all the key words that are contained in more than a dozen shell statements so if you look over in column E you'll see the Showell number and that's eight point one - one eight point one dash two eight point one nine three eight one - four eight point one point two eight point one point two eight one so on and so on and so forth so we've numbered every one of these shell statements so that we can identify them precisely and link them to the big question so instead of you can you can probably appreciate the fact that when you're coming in and you're evaluating a program maybe evaluating your own program you want to start with do we have good operating procedures or not and the operating procedures need to cover all this stuff that's in the big question and if you want to get really down in the weeds well now you can look at those individual shell statements and say well does it cover this particular aspect of having an operating procedure or does it cover this particular aspect of my operations those kind of things so we're trying to start at the high level and then allow people to drill down and so that's why the tool is specifically structured this way and you'll notice that this is a row three or I guess Row 4 the first question is out of operational controls it's not out of management leadership and commitment so we intentionally reorganized the order of the elements as you go through this and in fact you'll find management leadership and commitment at the very bottom of the spreadsheet which is unlike every other tool that I've seen so far another every tool we've developed so far because everybody just wants to start with a first element and obviously that's a foundational element but but the proof is in the pudding so when you're evaluating program you know whether you have the proper appropriate management leadership and commitment because you got a well designed system and if for some reason you've answered all these questions got a poor score then you have a hard time justifying that you've got the right management leadership and commitment behind this program so so we did that on purpose and first thing out of the box is let's look at your operations you know how are things work in and and so that we ask that long question and at the end of the evaluation column see it's got a score and that score is going to fall from one to four on a maturity model so three is you've fully developed the programs that you need to address that question for your operations level four as a reminder on the maturity model is it's it's currently undergoing continuous improvement and you've been to you know continuous improvement cycles for this and then the evaluator in column D has a place to enter their comments as to what they saw as good or areas they saw as needing improvement there are opportunities for improvement and they so that's your basic implementation score so have you developed a PSMs that addresses the core requirements of the RP 1173 now if you'll go to the next slide I think it's taken a little bit of time for people's screens to load so I'm going to wait just a second hopefully people are seeing that now again it's a it's an eye chart sorry for that but if you look at the bottom you'll see that now we're on the 234 shall statements tab so before we were on the implementation scores tab and every one of those big questions listed all the specific shell statements that that big question referred to well if you want to see the actual shell statement so you just go to the 234 shall of statements tab and there you've got 234 house statements and they're numbered they're organized by section of the RP and then they're numbered we just assign numbers to them ing to the numbering within the RP paragraphs with subdivision is appropriate to make sure you can identify every one and then so we've got the actual question and in column C and those are the actual shall statement and the shell statements are essentially verbatim out of the RP the only changes that were made to them was you know just to make them a complete sentence so you know if the RP said you shall have a program that addresses X you know then the shell statements going to do do you have a program that addresses X and then we have some additional guidance for level 3 and level 4 for that specific shell statement so column D is the level 3 kind of guidance and column E is the level 4 kind of guidance and what we're trying to do is help the evaluator know if the program or the the program's whatever it is that you needed to address that specific shell statement had been fully developed then you would be answering the questions that are you know as appropriate to a column D and if they've been developed and you've been changing them and improving them well then you'd be able to answer the kind of questions that are in column E so so again it helps the evaluator drill then the each one of those self statements was appropriate and you'll see that there's it's a lot of individual guidance for every one of the shell statements and again on column F the evaluator would have a space to comment good or bad on that particular requirement and how they felt like the operators program satisfied that next quest next line so I'm sorry back up the slide you'll notice that there's also an effectiveness scores tab if you can read it and you probably can't the second tab is the effectiveness scores tab and and I'm not showing you that tab because that one is the one that we're still finalizing and I didn't want people to to fixate on something that's not going to be the exact thing we're gonna have later okay so if you'll go next I'll talk about the KPIs and how we develop them so what we intended to do was come up with KPIs that every segment of the pipeline industry whether it's liquid transmission gas transmission gas distribution would have very similar KPIs and that those would be based off of industry standard information so one company's KPIs would be should be using exactly the same criteria that that in other companies would so that they can be compared to their peers and industry so so what we came up with was was three what we're calling comparative KPIs the first being incident rate ten so reportable and you can see you in a minute kind of how the rate is calculated but these are things that you're already supposed to report difensa as a pipeline operator and then incidents impact in the public four thousand miles and again these are films of reportable incidents but the way we define impact public changes a little bit from segment to segment within the industry and then your injury rate reportable to OSHA for all the personnel within your pipeline SMS scope and we realized that that might be a little different for one company versus another as far as what parts of their organization they consider to be within the scope of the rest of mass but so we felt like that was a manageable thing and the endured injury rate is a you know we've got those numbers from OSHA so we know what the industry averages are and then the operator can compare themselves now one thing that's important to note about these KPIs is this the KPI that's going on your internal evaluation tool these are not KPIs that you're necessarily sharing how you did versus industry with anybody outside of your company that's up for you to do so this evaluation tools for your use so but at least you can see how you're doing versus your peers for your industry segments and then we actually have a scoring formula built into that that gives you credit for being better than the industry peers and perhaps some debits if you're significantly worse than your industry peers but there's a scoring system that that's built into that and that's what we're that we're still finalizing as we speak to make sure we've got good alignment around how that's going to work and then there's the last two are injuries and fatalities that our films are reportable and the important thing there is films are reportable so if you have an employee that's in a truck and drives off a cliff and dies that's an OSHA of reportable fatality and you may have lots of other agencies you need to report to but that's not a fem sort of reportable fatality Simpson reportable fatalities are the ones that start with a pipeline incident and then lead to an injury or fatality so so when you look at the industry and it doesn't matter what segment under sir you're talking about these are relatively rare Massey relatives they're very rare so even a large operator typically would not have a fence or horrible injury or PEM's or a portable fatality over the course of the year so so those are kind of automatic debits off of your KPI score if you'll go to the next slide so I've shown the comparative KPIs that we're currently looking at for each segment of the industry so I highlighted the liquid segments of the industry but the column beside is for gas transmission and then to the right is gas distribution saying see liquid will be Dempster reportable incidents on the right away per thousand miles of pipe now this is a new data I can calculate the numbers for any operator out there because all the necessary information is already reported publicly and posted on fences website the only thing that's a little tricky is exactly how you define an incident on the right-of-way because for liquid pipelines there's not a checkbox for that on the incident report form so we we have a set of criteria that that the liquid industry has been using for many years we just have to explain how you evaluate the incident to know if it was considered to be a right away incident or not and so we'll have that in the guidance document and then there's stems uh impacting people in the environment incidents per thousand miles now for liquid operators IPE is a defined metric that pimsa and the industry have agreed to and it's posted on fences website you can pull up your IPE events for any operator right off of their website that is not the case for gas transmission and gas distribution there there's no fems agreed impacting people in environment metric but we've worked with gas transmission and the gas distribution trade associations and come out with with things that they feel like would be the appropriate criteria to say well this is the kind of thing that we do or kind of incident we have that would impact the public so so we've got those criteria and those will all again be published in the guidance document and then lastly there's the OSHA injury rate which is the same for every one of the operator or every industry segment so next slide one other issue we've been trying to to work on is pretty competitive KPIs say if you're in the liquid industry an operator there's about one reportable incident per 500 miles of pipe per year so if you're an operator that's operating less than 500 miles of pipe well if you're just average you would be expected to have one year with zero and another ear with two and that's still one incident per 500 miles of pipe per year here's completely average but in the year that you're zero you look perfect and in a second year you look horrible because you're twice the industry average and in fact you're just average so what we're trying to do is extend the period of time that you would look at based on the size of the operator so the smaller operator would say operating less than 500 miles of pipe would compare their incidence over a three-year time period to the industry average that gives them a little more time to average out their performance so one good year one bad year don't make them look like they're a different kind of operator when really they're just the same operator and then if you're more than 500 miles less than a thousand miles you'd use a two year average more than a thousand miles you just use the most recent 12 months or your prior years data whichever is available now again I wouldn't you know say this is cast in stone so this averaging the the break points that we have for averaging may also be tweaked a little bit as we're finalizing the KPIs so 500 miles might be 750 or something like that so so so I wouldn't say this is absolutely the way it's going to work but I think we have pretty good consensus around that next slide and then then I mentioned that fatalities and injuries that are in that are films are reportable would be automatic deductions so if you had an injury fencer a reportable injury that knocked a quarter of a point off your KPI score overall and if you have a fence or a portal injury with a fatality it knocks a half a point or if your KPI score now if you don't get dinged twice for the same incident so if you have an incident that has injuries and fatalities well then you just get a half point knocked off the score you don't get 0.75 knocked off your score next slide so the so the idea is you take your comparative averages and you get credit for being better or if you're significantly worse you might get a debit for being worse and then you average all those comparative KPIs to get your KPI score and then you take the deductions for injuries or fatalities if you have any deductions to come up with your final KPI score and I'm not showing you the exact formulas because those are still I think being tweaked next slide so then so you take these three kpi's averaged them together do your deductions for fidelity to injuries and there's your final KPI score and if you go to the next slide you see this is again back on the spreadsheet so you see the tab that we're on is the summary tab so that's the third tab on the bottom and that's it we're just automatically rolls in these are your scores for the elements and this time we have them listed on the order during the RP so you can see your score for leadership and management commitment your score for stakeholder engagement here store for risk management and so forth and you get a overall company implementation score that somewhere between zero and for the example I'm using here is somebody who's still in the process of developing their program so they're not quite a three and most anywhere and then their effectiveness score and in this case to show how it might work for you or against you this particular example as a minus 0.5 on effectiveness so then there would be combined company score of a 1.9 and that would range from 0 to 5 if they were had perfect implementation and great KPI results you know better than average on all these metrics well then they they can be 5 and and it's kind of like the Olympics used to be which is nobody ever got a perfect team in the Olympics and now they do but so so we don't expect operators to actually get Fox you know 5 is aspirational but but it's out there and we know how to get there and Tony I'll turn that back over you know great thanks Bill and you know Bill's point there was is really important getting to five and I'm done is not what this is all about we know when we designed the tool in a way that we want to get it to scores around four four and a half is great we also recognize that there's going to be a year where your performance just isn't that that's good and you may fall back you may also fall back a little bit well just through realizing that hey I thought that we had all these requirements met now that I understand them a little bit more I understand what's required I'm thinking that maybe we have some adjustment to do to in order to get there and so as a result you score me may fall back a bit and then next year advance forward so we really want to get to that point where there's the plan do check act cycle working really well and and as the scores go down we do more evaluation to figure out what do we need to do to change to bring it back up again I'm going to cover the the next steps here so through the summer we're going to continue to receive feedback as bill said earlier we're probably about three weeks or so from actually releasing the tool and it'll it'll be released on the website we'd encourage you to look at it play with it try it out and we're definitely really interested in hearing more feedback on it there is a pilot of the third party audit program that API is putting together that will be happening in September and we've got a we've got a volunteer Colonials volunteer to do that and we'll have our actual auditors to do the or the API auditors will be doing that pilot October 10th mark your calendars we're actually having a tools workshop where we'll have a workshop I believe we're in Galveston for that and we'll be going through all of the tools and we would really like if those of you who have used tool or piloted it are available to share your experience at that workshop that would be really valuable and that will make the workshop much more valuable and then post workshop we'll look at all the feedback that we've received we'll look at how well the workshops gone and we will consider how we need to revise the the tool next one please turn it over to Sam to talk a little bit about the third party audit program before we move to questions Sam go ahead thanks Tony so I just want to give a quick update on the API voluntary third party audit program so we're in the process developing a recognized consistent industry-wide protocol and process for the program and we're going to be using the evaluation tool questions as part of the audit with qualified competent safety management system auditors so a couple of timelines coming up for everyone you see that's July to August of this year or finalizing the audit process and vetting auditors by September we hope to be piloting the process and tools with liquids operator Steve oil has volunteered for any thankful and graciously for that in the fourth quarter of this year we're going to we're going to launch the pilot to industry and that's gonna be audits billed at at a cost plus an administrative fee which is which includes the daily auditor rates plus expenses so API is GIS the global industry services program management is gonna oversee this and lead the direction of that and for questions or interest in the audits Erin Duke is going to be your point person for all this and his email is up on the screen here it's Duke a at API org and he's only willing to feel any questions for anyone that's interested in partaking in the process or in piloting so I'll turn it back over to Tony for some question and answer thanks Sam and the you're also welcome to contact Erin if if you're interested now in finding out more about the third party audit or if you want to get in line to to have a third party audit done contact Erin he'd be delighted to hear from you so we're now going to open the lines for questions answer we have about 15 minutes you to cover questions Kathleen if you would open the lines and we'll see if we have any questions at this time I would like to remind everyone in order to ask a question press star then the number one on your telephone keypad well pause for just a moment to compile the Q&A roster again if you would like to ask a question press star and the number one on your telephone keypad your first question comes from the line of a participant whose information was unable to be gathered if you've queued up for a question please state your name your line is open if you've queued up for a question please put your name hey yes this is Mark Weiser I'm representing P pick I'm a consultant and can you hear me yeah okay here's my question is for Bill he built just a quick question I know you don't have the effectiveness tool out there I just want to make sure if you when you when you are comparing your implementation and then moving into your effectiveness is the effectiveness is affected this is not by element but it's a overall effectiveness score that you put together is that how I sort of read that document it's a it's a bit of both so thanks for asking that because it's a it's common common kind of a question people have so when we first started out you know a few years ago looking at conformance versus effectiveness and we actually broken a two different teams so conformance is on the maturity model one two three so when you get to three you conform with you built programs to do what the RP says you're supposed to do so then if they have effectiveness and effectiveness we saw that there are two pieces to effectiveness there was effective nosov implementation and an effectiveness of results so so you got the level three the programs are written there on your land or printed up in notebooks whatever okay that doesn't mean but people actually do it okay so level four is you can demonstrate that this program is actually working and it's actually being continuously improved so so it's a real live continuously improving you've effectively done what you said you're going to do and it's working it's not necessarily working perfectly in part of the continuous improvement process is you continuously identify things that could be better that's fine but you can at least demonstrate that yes this is a real live program and it's and and we we all do it it's used everywhere it needs to be used so so that would be effectiveness of implementation which gets you to level four so that's part of an effectiveness evaluation is am i effectively doing what I said I was going to do and then the last part is kind of the proof is in the pudding when it comes to okay I'm doing all this work and I've written all these programs and I've got all my people trained and we're all measuring stuff and getting feedback on stuff and continuously improving stuff well you know the end of the day the the prize is that your performance as an industry and Burkes certainly as an individual operator gets better over time you know that we're actually affecting the safety of the industry so that's affect what we call effectiveness of results and that's where we get the KPI comparisons so if a company is doing this effectively then over time not to say that every operator will have a good year or a bad year but over time their performance trends better than the rest of Industry who maybe isn't doing it as well so so there's two pieces to the effectiveness evaluation so so the implementation tab gets you to level four which includes that first part of effectiveness and then the KPI tab gets you to level 5 which is the the results okay so all right I understand and that's that's the tie-in then with the score from the from the KPIs okay thanks Bill there are no further telephone questions at this time I will turn the call back over to the presenters thanks Kathleen we would be quite welcome other questions so if you have questions that you would like to contact us individually about please please go ahead if you can't find out how to get a hold of us you Aran's email is in the presentation you can contact Aaron and he will get the question to Bill or I or Sam or or one of the other folks who is representing the area if you are interested in doing some more pilot work with us or if you're really interested in talking at the tools webinar on October 10th we'd really like to hear that and until our next webinar I'd like to thank everyone for attending and look forward to hearing your comments as you get a chance to use the tool thanks again to Bill and Sam for participating in this as well and so long everybody good today's conference call you may now disconnect