Mr. Chair, and members of the committee, we are Cylo Technologies, just a small software company. We want to thank you for inviting us here this afternoon. Mr. Gerling, beside me, is our company’s president and chief technology officer. I'm Cam Spady. My role is principal investor in a small company.
Cylo fits the scope of this study under the Natural Resources Canada definition of clean technology in the category of preventing any type of environmental damage, and more specifically as preventing environmental damage due to pipeline leaks and failure. We offer software and support services to oil and gas companies as well as petrochemical companies in Canada and the United States, and assist them in handling the volumes of data that they gather under the provisions and regulations of the applicable governing body, such as the National Energy Board and the various provincial regulators, and in turn enable their using that data to pinpoint pipeline defects and correctly target them for repair. What sets Cylo Technologies apart from systems currently in use with this same objective is an innovative solution, whereby we process all available data into a 3-D spatial model.
To explain why this is important to pipeline safety, I just want to talk a bit about the current industry methodology.
In-line inspection data, or ILI data, is the information gathered by pipeline inspection devices known as smart pigs. The information collected by these devices is high-value data capable of detecting very tiny flaws, but in doing so they generate burdensome reports. Pipeline operators then use these reports to evaluate the overall condition of the pipe and categorize, target, and locate specific flaws for repair. The data is processed in systems using a current industry standard known as the geographic information system, or GIS. Interestingly, the world’s first true operational GIS was developed here in Ottawa by Dr. Roger Tomlinson, for the federal Department of Forestry and Rural Development, and was called the Canada geographic information system, or CGIS. The year of its development was 1960.
Geographic information systems evolved from this made-in-Canada innovation and are the bedrock upon which pipeline integrity programs currently run, but GIS is a system with a host of limitations. The two main limitations are the amount of data that can be processed using this technology and the spatial accuracy of trying to locate pipeline defects in a system that uses a two-dimensional implementation. To ease the burden, ILI data is filtered to be processed, and meaningful defects are missed entirely. The consequence of this is shown in just a few statistics compiled by the Canadian Energy Pipeline Association, or CEPA, for their most recent 2016 performance report for the period 2011 to 2015.
Unpreventable incidents, like external interference such as unauthorized excavation and geotechnical and natural disaster, account for only 18% of the total. The remaining preventable causes account for 82% of incidents. These include pipe cracking, metal loss, and materials, manufacturing or construction, and are all causes detected and reported by smart pigs, but are only of value if evaluated properly.
I propose that the technology Cylo has developed does just that. Reports now available publicly seem to indicate that the spill of 220,000 litres of oil into the North Saskatchewan River in July 2016 was a preventable incident based on the post-event analysis of data that the pipeline operator had in its possession before this significant leak occurred.
To quickly address some of the specific questions put forward in the clean technology focus document, I'll answer the question of whether the technology will perform as expected. The answer is yes. Cylo Technologies software has been available and in use commercially since 2011. In this time, none of our clients has had a reportable event.
Which institutions and instruments can the federal government leverage to de-risk clean technology adoption? We believe the National Energy Board, the NEB Act, and the recently enacted Pipeline Safety Act all currently have very effective provisions to ensure pipeline safety, but I believe the NEB is hobbled by practical limitations of current investigative tools, and is thus reactive rather than proactive when it comes to pipeline situations that lead to environmental damage.
Last, I invented this question a bit. Could new regulations improve pipeline safety? Our position as a solution provider enables us to be intimately familiar with the industry while not being biased by the public responsibility that falls on the pipeline operators. From that perspective, we believe that any further regulations that aren’t designed to foster a deeper understanding of the data would be counterproductive. Mandating more data collection and more frequent pipeline inspections would further compound the current industry challenges, where the answer to stopping the flow of pipeline incidents is in more thorough use of existing data collected and reported under current regulations.
Furthermore, we suggest the possibility of the NEB being able to use and/or recommend specific technologies. As Cylo has demonstrated, some of these technologies are developed and owned privately and are thus currently prevented from being used as investigative tools.
Mr. Chair, in conclusion, I would like to say that Cylo Technologies understands and promotes the evidence that pipelines are the safest and most efficient way to transport all fluid commodities in Canada, and they do so with the lowest carbon footprint of all the various methods. We would also like to say that there is still room for improvement in the industry through the use of clean technologies, such as ours, which are the focus of this study.
Thank you so much for the opportunity to present to the committee.