The Evolution of Risk Management at Enbridge Pipelines

Abstract

1999 marks an important anniversary for Enbridge Pipelines Inc. of Canada and its U.S.-based affiliate, the Lakehead Pipe Line Company Ltd.: for 50 years we have been the primary link between the large oil production areas of western Canada and major market hubs in the U.S. midwest and eastern Canada. In retrospect, this strong history of success is chiefly due to thorough and logical planning and choice selection in all aspects of company endeavors.</jats:p> <jats:p>At Enbridge, as in countless other firms in a wide-range of industries, decision making was often the product of expert consensus and years of solid experience in dealing with similar situations. This approach has worked well for Enbridge and our stakeholders for five decades, as evidenced by the reliability, efficiency, and safety record of our pipeline system. However, as the millenium nears, we are increasingly finding formalized processes that integrate quantitative models and qualitative analysis helpful in planning and execution for both the short- and long-term. Several broad trends at the root of this movement include the heightened pace of change; the increasingly complex web of relevant factors; the growing magnitude of the consequences associated with sub-optimal decisions; the need for thorough documentation; and the apparent benefits of a framework that enables objectivity and consistency. In short, an approach that completely and systematically evaluates the multitude of dynamic factors that affect the ultimate outcome of the matter at issue is necessary. Although the term “risk management” is now often used to describe this process, Enbridge — along with many other responsible firms in the pipeline operating and other industries — has always practiced the underlying principles.</jats:p> <jats:p>This paper addresses the background of “risk management” in both the Canadian and U.S. pipeline industry, as well as accepted theory. It also encompasses the progression of risk management at Enbridge Pipelines, up to and including current initiatives. The usefulness of risk analysis, risk assessment, and risk management tools will be discussed, along with the overriding necessity of a well thought-out process, firm corporate commitment, and qualified expertise. Much of the focus will address the ongoing evolution and maturity of a comprehensive and well-integrated risk management program within the Enbridge North American business units. The criticality of maintaining focus on the core business function — in this case, pipeline operations — will also be addressed. In addition, past learning’s as well as future opportunities and challenges will be reviewed.