In 2003, TransCanada set an objective to improve overall safety by 50 per cent from 2004 to 2008, as measured by the indicators of Total Recordable Case Rates, Away From Work Case Rates and Vehicle Incident Frequency, for employees and contractors. Four objectives were established to guide the improvement initiative for the five years: Effectiveness of Leaders leading safety, Engagement of Employees in the Transition to Interdependence, Working with only the very best contractors, and Focus Initiatives on Prevention 24/7.
By the end of 2007, overall safety performance has improved by approximately 25 per cent as measured by the indicators since 2004. This was a step change improvement but this is not the entire story. During the four year period, significant new programs were introduced that have now become a part of the daily routine and are fundamental in attaining the improved performance, sustaining that performance over time and forming the new foundation for future improvements.
Some of the new programs include:
- formation of Joint Health and Safety Committees in all operating regions;
- implementation of a formal risk assessment process used by on site work teams prior to commencement of activities;
- implementation of a formal Contractor Safety Management Program for the selection and qualification of all contractors;
- formation of critical incident review committees at the management level;
- emphasis on ‘near hit’ reporting and learning for these before an actual incident occurs; and
- creation and implementation of the Safety 24/7 Program which endeavours to raise safety awareness at home and at play and reduce the risk of an incident for employees or their family members.
Vehicle Incident Frequency (VIF) refers to the number of recordable vehicle incidents recorded for every 1,000,000 kilometres that our employees drive. A recordable vehicle incident is any incident (regardless of fault) involving a fleet or rental motor vehicle that results in an injury to any person or damage to any vehicle or property, unless the vehicle was safely and legally parked at the time of the incident. On average in 2007, TransCanada experienced one incident for every 377,047 kilometres traveled. This compares favourably (53 per cent better) with the industry average in Canada of one incident for every 263,822 kilometres traveled.
The Total Recordable Case Rate (TRCR) refers to the number of recordable cases per 100 full-time employees. On average in 2007, TransCanada experienced one workplace injury for every 90 person-years worked, or approximately 2.5 times better than the industry average in Canada of one medical injury for every 35.6 person-years worked. The majority of these injuries required only minor medical treatment. (Minor medical treatment includes such items as the need for prescriptions, stitches, or restrictions in work; and does not include an individual incurring time away from work.) Recordable cases are illnesses and work-related injuries that result in loss of consciousness, restriction of work or motion, transfer to another job, loss of life or injuries that require medical treatment beyond first aid.
The Away-From-Work Case Rate (AWCR) refers to the number of
away-from-work cases per 100 full-time employees where an employee would have worked but could not because of occupational injury or illness. On average, TransCanada reported 196 person-years of work for every reported case, which compares favourably (44 per cent better) with the industry average of one away-from-work case for every 136 person-years worked.
With respect to Vehicle Incident Frequency, Total Recordable Case Rates, and Away-From-Work Case Rates, we must note that TransCanada’s acquisition of American Natural Resources (ANR) and Great Lakes Pipeline Systems (GLGT) and their subsequent integration into TransCanada operational procedures affected safety performance during 2007. The integration of TransCanada safety procedures and programs into the new pipeline systems began in late 2007. Once the operations of ANR and GLGT pipelines fully comply with TransCanada’s safety procedures and programs, we expect a reduction in operational risk and therefore improved safety performance in the future.
- Tier 1 Activities are the foundation of HSE governance. All activities driven by regulatory requirements, internal risk analysis and best practices are identified, planned and routinely conducted. When well managed, these activities minimize or eliminate the causes for findings in higher tiers. Of the 187,811 tasks scheduled for 2007, 99.2 per cent were completed.
- Tier 2 Inspections include formal inspections at all facilities to identify hazards and findings that must be corrected to eliminate and/or minimize injuries, property damage and substandard practices and conditions. Of the 266 scheduled in 2007 Planned Inspections, 92.3 per cent were completed. Minor trends were found in signage and labelling which regional and local operations are addressing.
- Tier 3 Audits (internal) are biennial internal assessments on the effectiveness and adequacy of TransCanada’s HSE Management System Framework to manage TransCanada’s significant HSE aspects. Audits are conducted utilizing recognized audit principles and company developed protocols.
- Six Tier 3 audits were conducted in 2007. There were no critical findings within the audits, and all major findings have been addressed. Work continues on serious and minor findings, and at year end, over 50 per cent of these had been addressed. All action items are assigned and tracked for completion.
- A Compliance Audit Program was developed in 2007. Environmental Audits were conducted in each of TransCanada’s seven operating regions. Action items are assigned and in process of being addressed.
- A Contractor Management Audit was conducted across six of the operating regions.
- Tier 4 (External) Audits are audits or inspections conducted by third parties, including those procured by TransCanada, as well as regulatory inspections. TransCanada conducted an external Management System audit in late 2006. There were no critical issues identified. Audit recommendations were applied to the Safety Priorities in 2007.
Total Giving for 2007 (cash and in-kind): $6,141,094. This giving was achieved through:
Philanthropic Gifts: Intermittent support to a wide range of good causes in response to the needs of charity and community organizations.
Social Investment: Strategic involvement in community partnerships that address a specific range of social issues chosen by the company. These programs often support corporate interests and enhance reputation.
Commercial Initiatives: Partnerships with charities and community-based organizations that directly support the success of the company, promote brand identity and other business goals.
Greenhouse gases (GHGs) — associated with climate change — are emitted by TransCanada operations as carbon dioxide, methane and nitrous oxide.
The main source of TransCanada’s GHG emissions is the fleet of turbine engines that power compressors moving natural gas through our pipelines, consuming natural gas as fuel and emitting carbon dioxide.
Lesser GHG emissions come from methane, the major component of natural gas. Methane emissions occur as small ongoing gas leaks from pipeline equipment, engineered emissions from components designed to release small amounts of gas during normal operations and from blowdowns, when natural gas is vented to the atmosphere to allow for pipeline maintenance. Negligible amounts of methane are emitted by our power facilities.
Very small amounts of nitrous oxide are released as bi-products of natural gas combustion in pipeline and power operations.
TransCanada is committed to responsible management of greenhouse gas emissions from our facilities. Accordingly, we adhere to the greenhouse gas emissions reporting regulations, as administered by
Statistics Canada on behalf of
Environment Canada and by
Alberta Environment. We believe accurate and consistently reported data provides a sound basis for designing policies that are put in place to manage greenhouse gas emissions.
The following table summarizes greenhouse gas emissions from TransCanada’s pipeline and power generation facilities in Canada and the U.S. Greenhouse gas emissions from partially owned entities have been prorated to reflect the percentage ownership that TransCanada holds. Almost 80 per cent of the greenhouse gas emissions noted in the following table are attributable to pipeline operations. We expect that greenhouse gas emissions from our power generation assets will increase when construction is completed on a number of new facilities and as we acquire new assets that consume fossil fuels. On the pipeline side, greenhouse gas emissions will vary from year to year depending on changes to the supplies and demands for clean burning natural gas in North America.
TransCanada 2007 Greenhouse Gas Emissions (millions metric tonnes CO2 equivalent)
Overall, greenhouse gas emissions for TransCanada's pipeline and power facilities are higher for 2007 than reported in 2006, as we have included greenhouse gas emissions estimates for our added U.S. pipeline interests.
TransCanada expects that greenhouse gas emissions from its asset base will increase as it continues to invest in facilities that transport clean burning natural gas to growing energy markets in North America, and as it continues to build a balanced power generation portfolio that will include facilities that consume natural gas.
| Canada – Pipelines |
6.9 |
| Canada – Power Generation |
2.8 |
| U.S. – Pipelines |
5.0 |
| U.S. – Power Generation |
0.5 |
| TOTAL |
15.2 |
During 2007, ongoing and new initiatives positioned TransCanada to improve GHG management on several fronts:
TransCanada has pioneered the development of new X100-grade, large-diameter steel pipe which allows higher pipeline operating pressures using thinner walled pipe.
In pipeline operations, this enables more natural gas to be moved by less energy, reducing fuel consumption and related GHG emissions.
In pipeline construction, the use of high-strength steel also reduces total steel consumption, with a corresponding reduction in material tonnage and transportation costs, especially to remote locations.
Gas-fired turbine engines are the preferred drivers for compressors that move natural gas through pipelines. Performance trials conducted by Rolls Royce and TransCanada on the RB 211-6761 turbine engine show it can deliver up to a nine per cent reduction in fuel consumption and GHG emissions, compared with earlier models.
Canada, U.S. and global patent applications have been filed for TransCanada’s newly-developed Supersonic Ejector, which captures and reclaims engineered methane emissions from dry gas seals on the centrifugal compressors that move natural gas through pipelines.
A prototype of the Supersonic Ejector has been successfully tested at one of our compressor stations and captured emissions in a commercial environment. Since the ejector consumes no energy and requires minimal maintenance, it’s an efficient and economic way of reducing methane emissions. The chief component of natural gas, methane is a highly potent greenhouse gas that traps 21 times more heat to the earth’s surface than the same volume of carbon dioxide.
Ejector technology makes it possible to return low-pressure methane emissions into a high-pressure fuel gas line, partially offsetting compressor engine fuel demand and increasing the volume of natural gas delivered to consumers. TransCanada has signed a memorandum of understanding with a leading compressor engine manufacturer to commercialize this technology.
TransCanada has invested more than $1 million in the Air Emissions Data Management System (ADMS), which provides instant tabulation of emissions data as reports are received from across our pipeline and power businesses. ADMS positions TransCanada to respond promptly and efficiently to the latest government regulations. Over time, tighter tracking of GHG emissions performance is expected to provide increased ability to identify improvement opportunities and limit emissions.
TransCanada’s outage decision model (ODM) plays a major role in minimizing the number of methane release events required when pipelines are shut down for repairs or new connections. These methane venting procedures, called blowdowns, are required to enable safe welding and other work on pipelines.
In these situations, TransCanada routinely uses truck-mounted portable compressors to transfer gas from affected pipeline sections into adjoining or parallel pipeline sections, greatly reducing methane venting.
Although TransCanada has made substantial investments in managing blowdowns, we would rather avoid them whenever possible. For several years, we’ve used the ODM to determine when blowdowns are necessary and to combine multiple repair projects into a single blowdown wherever feasible.
Through a series of field tests, TransCanada has proved the effectiveness of a commercially available portable incinerator that can be delivered by truck to blowdown sites. TransCanada uses this technology wherever accessibility and economic considerations permit.
When a blowdown is performed to vent methane from a pipeline prior to repair work, transfer compressors remove the vast bulk of gas from the affected pipeline section. But there’s always some residual methane left behind. Incineration converts methane to carbon dioxide, dramatically reducing immediate and long-term emissions impacts.
Some examples of TransCanada’s involvement in alternative energy include:
A $55.6 million re-powering project will double power output at TransCanada’s run-of-river Vernon Hydro Development in Vermont and New Hampshire.
Portlands Energy Centre (PEC) is providing the University of Toronto and ARISE Technologies with a parcel of land to create Canada’s largest solar research facility. The solar park represents a total investment of $5 to $8 million in photovoltaic technology and will harvest enough solar energy to power up to 1,000 homes by sometime in 2009.
For more examples see Strategic Growth in Energy [link to this section in document].
New Employees
Net income was $1,223 million or $2.31 per share in 2007 compared to net income of $1,079 million or $2.21 per share and net income from continuing operations of $1,051 million or $2.15 per share in 2006.
Comparable Earnings
Comparable earnings in 2007 increased $182 million to $1,107 million or $2.09 per share compared to $925 million or $1.90 in 2006. TransCanada’s comparable earnings in 2007 excluded favourable income tax adjustments of $102 million and a gain on sale of land of $14 million.
Funds Generated from Operations
In 2007, TransCanada’s funds generated from operations were $2.6 billion compared to $2.4 billion in 2006.
Investing Activities
In 2007, TransCanada invested approximately $5.9 billion in its Pipelines and Energy businesses. This included US$3.4 billion related to the acquisition of ANR.
Financing Activities
In 2007, TransCanada issued approximately $2.6 billion of long-term debt, US$1.0 billion of junior subordinated notes and $1.9 billion of common shares.
Balance Sheet
In 2007, TransCanada’s total assets increased by $4.4 billion to $30.3 billion and shareholders’ equity increased by $2.1 billion to $9.8 billion, compared with 2006.
Dividend
In January 2008, the Board of Directors of TransCanada raised the quarterly dividend on the Company’s outstanding common shares for the quarter ending March 31, 2008 by six per cent to $0.36 per share from $0.34 per share. This was the eighth consecutive annual increase in the common share dividend.
For additional financial detail, see our 2007 Annual Report.
