When an audit occurs we will explain what they are looking at and what you will need to do!
Hello, and welcome back to the latest installment of WiQ’s Waste Wizard Wisdom series.
Today we will be discussing the most common deficiencies we see from regulatory waste audits that are performed on oilfield generators. This blog is going to be pretty specific to our oil and gas producing friends, but the concepts behind the words are very much applicable for other types of industry in Canada.
As we all know - or are about to find out - the Alberta Energy Regulator (AER) is tasked with overseeing energy and mineral resource development in Alberta. As part of their purview the AER is “responsible for ensuring companies meet our requirements and stay incompliance”. The requirements of course being the applicable Acts, Rules, Regulations, Directives and other such eloquent mechanisms that they use to ensure the safe and responsible development of Alberta’s oil & gas industry.
To ensure the AER meets their mandate they conduct various types of compliance assurance activities on producers which could include:
If they find that an oil and gas producer is not following the rules, an enforcement action may be taken. The enforcement action you can receive will depend on a few things like the severity of the noncompliance and how many times you have had issues in the past, but can include:
For today, we are going to focus on the audits we see come through from the AER and we will explain what they are usually looking at and what you will need to do, while highlighting the most common deficiencies we see when working with our customers.
As a quick FYI before we start, we want to highlight 2 things:
The scope of any audit can be quite broad, but we typically see a consistent theme when it comes to waste management audits.
Usually we see:
Now let's break down what information the AER typically requests and how to best respond.
Essentially, the AER is looking to ensure you know, or have an idea of, what your waste generating processes are.
They are looking for:
Since these audits usually go to someone on an Environment & Regulatory, whoever responds to an audit will usually have to work closely with operations to determine the above information. You may also have to reach out to the transporter to determine what type of truck was used and the waste receiver to verify how the materials were managed at the disposal.
When collecting the information, ensure that you are detailing everything so that it is clear, concise, and accurate – because a follow-up questions from the regulator may come.
Mature waste programs will typically have waste profiles or some sort of document that has all the relevant information to respond to an audit, but in cases where these are not available, discussions with operations will be required.
Since you are already discussing with operations on the generating description, it might be a good time to document the information for future use!
The next piece of information they will ask for is the waste classification. This is your determination of whether the materials are Dangerous Oilfield Waste (DOW) or Non-Dangerous Oilfield Waste (non-DOW) and what waste code was chosen.
They will ask you to provide any documentation that is relevant for determining the classification such as analytical data, waste profile sheets, Safety Data Sheets, and they will also require you to provide the context and rationale used to explain how the classification was determined.
This is where we see a lot of organizations run into trouble.
If you have no backup or rationale explaining the classification determination, you are in for a noncompliance.
If you do not have proper documentation or rationale on hand, you may need to work with the appropriate people, like WiQ’s waste tracking and professional services experts, to come up with something for your response. Again, providing details in a way that are clear, consistent, and accurate while also ensuring that aligns with the generating process that you just detailed.
It wouldn’t make sense to call something non-DOW, but you ended up sending it to a Class I landfill or calling it DOW and sending it to a Class II landfill. Your information must be lined up.
Again, now that you have it written down for the audit, this is your chance to use this as a starting point to start the documentation process to improve your overall waste management program.
With Generator Knowledge being formalized as a mechanism for classification in the updated D058, producers should be aware of the requirements for using this mechanism. You can’t just say its DOW or non-DOW and be done with it, you have to provide context, back up, and rationale. I still owe you a blog post about what Generator Knowledge actually entails, this is coming soon.
The last piece of information they will ask for is all the applicable shipping records that demonstrate compliance with Section 3 of D058.
They will want to see what form you used, what information you put on the form, and if you used an Equivalency Certificate for the movement.
Sometimes organizations will struggle to produce shipping documents. Paper can get misplaced, lost, or it wasn’t filled in at all. Digital systems improve your accessibility to your documentation but if push turns to shove your waste receiver is more than likely to have a copy that they can share with you.
Shipping documentation is another common area where we see deficiencies.
There are a variety of deficiencies we see here – the most common being:
Waste Classification and Waste Codes MUST be listed on all document types.
Oilfield Waste Forms have a spot for it so usually it ends up on there, but if you are using a non-standardized form – think Bill of Lading or a truck ticket– you must ensure this information ends up on the document somewhere.
The incorrect UN #s and Shipping Names is a common error we see all the time, and it is something they will bring up.
When you use a UN# like 1993 or 1267 or whatever, you must use the correct corresponding shipping name for that UN #. These are a one-to-one relationship.
You can’t put 1267 slop oil, or 1993 sludge hydrocarbon – you have to use the correct shipping name listed in Schedule1.
For example, UN 1267 PETROLEUM CRUDE OIL or UN 1993 WASTE FLAMMABLE LIQUID N.O.S.
Also, Packing Groups are Roman Numerals, don’t use numbers.
The last thing we commonly see is discrepancies between the different shipping documents used for transport.
Depending on your process and your waste, you will either give the carrier an Oilfield Waste Form (aka manifest), or a Bill of Lading / Truck Ticket. This is used to ensure compliance and to track your waste from cradle to grave.
BUT
Usually, the transport company will ALSO fill out their own documents to track the labour, equipment, materials and services provided to your organization. This is intended to be used for invoicing.
So, what ends up happening, and what we consistently see, is that the information on one document does not match the information on the other document.
This comes back to the proper roles and responsibilities. Generators are supposed to determine appropriate classification and provide the carrier with the appropriate documentation. Carriers should not be classifying your materials for you – they should be ensuring they are writing on their form what you have on yours.
Carriers are well within their right to challenge your classification, and that’s a whole other scenario, but they should not be making classification decisions for your organization.
Coming back to how this applies to auditing.
When the receiver gets 2 pieces of documentation for the load, they accept both for receipt of the materials, they will fill out Part Con the waste manifest and then use either the transporter bill of lading or the AER manifest for the rest of their receiving process. If the information on the documents does not match this may cause a discrepancy further down the line when you request the information back for your audit.
Additionally, if you submit both documents for the shipment, because we must send “all applicable shipping records”, the regulator will easily spot a discrepancy, if the documents and the disposal records do not align, and flag it as a deficiency or will ask a follow up question.
So, you must ensure that the information you provide to the carrier is exactly what they are writing on their documentation to ensure alignment.
Once you have sent all the details, the AER will review everything and then typically either follow up with more questions, issue a Notice of Noncompliance (or other enforcement action), or accept your information as satisfactory and close the file.
One thing to note here – you have just now submitted for review all the information on how you generated, handled, transported, and disposed of the material.
You have submitted the generating process, the classification determination, the shipping documents, and (probably) the load disposal report.
All this combined information allows the regulator to pokehole and find inconsistencies – which they will follow up on.
Everything should already match, and if it doesn’t this is where deficiencies occur.
If you are issued a Notice of Noncompliance, again, don’t freak out! It is a learning opportunity for your organization to determine where you have process gaps.
The AER will usually ask you to take corrective action to address the noncompliance and require the development and implementation of an action plan that details the causes of the noncompliance and measures being considered or taken that would prevent similar events from reoccurring. This action plan of course is required to be shared with the regulator.
Corrective actions are to be determined by the producer as they pertain to the noncompliance and can include:
If the regulator is not satisfied with your corrective action plan, they will definitely let you know and may ask you to improve on your plan.
Just remember, what you tell the regulator now becomes a compliance obligation. You said you will do something, and now you MUST do it – so ensure what you are committing to is attainable within a reasonable timeframe.
I say this because if you consistently have the same issues, and you have shown inaction on taking any meaningful steps to address the issue, your Notice of Noncompliance may increase into something more substantial that can drastically impact your business.
Thanks again for taking the time to learn more about waste.
I hope you use this information as a consideration on what you have to do and how you can proactively take steps to improve your programs.
Continual improvement is the name of the game, and you can choose to be proactive or reactive.
Waste Wizard out
P.S. – The updated D058 has been in effect for ~4 months (at the time of this posting), so industry should be well on their way in implementing the required updates to their waste management programs. The coming months will be a good time for the regulator to check in on industry to see how well they are complying.
After industry discussions with the AER, it was indicated that the total number of audits or inspections will stay the same, but it was confirmed that all the updated requirements will be auditable. The AER did allow a grace period for the waste code updates, but it was indicated that industry should have had enough time already to make the appropriate changes. I.e., updated waste codes are something they will be looking for and auditing on.
Auditing can come with complexities, and we here at WiQ are here to support. Whether you need help responding to an audit, improving your waste management programs, or implementing digital waste systems, your friends at WiQ are only an email away.
Reach out to us at support@wiqtech.com
