Canada's energy industry regulator is investigating allegations that Calgary, Alberta-based TransCanada Corp. skirted a law requiring outside inspectors for pipeline welds.

National Energy Board Chief Engineer Iain Colquhoun says metallurgical engineer Evan Vokes complained in March that his former TransCanada employers ignored his concerns. After following "the chain of command to CEO Russ Girling's office with his allegations…he thought the next line of escalation was to engage the regulator and that is why he officially contacted us," Colquhoun told ENR.

TransCanada says in a statement that its own investigations show that Vokes' concerns had already been identified and addressed "well before any facilities went into service."

Unpersuaded, the NEB in a letter earlier this year expressed its concern with "TransCanada's noncompliance with NEB regulations, as well as its own internal management systems and procedures." The NEB further warned it "will not hesitate to impose appropriate corrective actions" for "residual or additional noncompliances." An announced audit of those systems quickly followed.

A 1999 NEB regulation clearly stipulates pipeline welds must be examined by inspectors who are independent of the prime contractor to avoid potential conflicts of interest, Colquhoun says. Vokes alleges TransCanada circumvented the regulation to avoid production slowdowns and increased construction costs.

More startling, regulators add, is TransCanada's reported admission that it had not always adhered to the regulation requiring outside third-party inspections of its pipelines and that this was common practice among energy companies.

"All companies have to comply," says Colquhoun, "so clearly that statement did cause us some concern. We certainly don't take that position."

Earlier this year, President Obama denied a subsidiary of TransCanada permission to proceed with construction of the $12-billion Keystone XL pipeline between Alberta's oil sands and refineries on the U.S. Gulf Coast.