A CBC News investigation has learned that TransCanada Pipelines — the Canadian company behind the controversial U.S. Keystone XL pipeline proposal — was troubled by quality-assurance problems on another recent American pipeline that exploded.

The Bison natural-gas pipeline exploded in a remote area near Gillette, Wyo., on July 20, 2011, six months after it went into service.

The explosion blew out a 12-metre section of pipeline and shook buildings more than a kilometre away, but caused no injuries or death.

Documents obtained by CBC News detail a pipeline project with problems relating to welding and inspection.

"We are in trouble on the Bison project," the pipelines’ construction manager wrote in a Sept. 18, 2010, internal email that lists problems related to welding and inspection. Construction of the project had started in August 2010.

The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) inspected the Bison project in September 2010, and took issue with the quality-assurance of inspections, the qualifications of people working on the pipeline and the procedures used to test the coating on the pipe.

PHMSA later said that the "construction activities affecting safety" appeared to be corrected before the pipeline went into service, the documents show.

Blast caused by "mechanical damage"

CBC News also obtained an all-staff internal memo issued by TransCanada CEO Russ Girling on Aug. 11, 2011, in which he acknowledged problems with an earlier phase of the existing Keystone line, and the ill-fated Bison pipeline.

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"We have experienced some challenges with the startup of our Keystone and Bison pipelines which has been disappointing for both TransCanada and its customers," he wrote. "I know our operations teams are working hard to address these reliability and integrity issues to ensure the safe return to full operation."

In May 2012, nine months after that internal memo, Girling wrote to the New York Times stating that TransCanada had "safely and reliably operated pipelines and other energy infrastructure across North America for more than 60 years."

Two months before the Bison line rupture, TransCanada's director of pipeline integrity was quoted in an industry trade journal saying that Bison was built with "state-of-the-art" technology. "They [the pipelines] will be in place for 20 or 30 years before they need any repairs," the director said.

A day after the 2011 explosion, PHMSA issued a six-page "corrective action order" to TransCanada.

Such an order is usually issued only after a hearing but in this case the regulator found that "failure to issue order expeditiously will likely result in serious harm to life, property, or the environment."

PHMSA has yet to determine the cause of the rupture, but in a statement to CBC News, TransCanada says "the damage most likely occurred during backfilling at the end of construction."

However, TransCanada says no damage was noted by its own inspectors, nor did it receive any reports at the time.

Whistleblower worried about inspections

In particular, emails obtained by CBC News revealed concerns with inspections.

"I worry with the poor welding inspection that we may have a problem, but getting it done is a pretty significant problem as well," TransCanada engineer Evan Vokes wrote in response to the Sept. 18, 2010, email from the manager.

Metallurgical engineer Evan Vokes went to Canada's energy-industry regulator with allegations of poor inspection practices at TransCanada. (CBC)

TransCanada fired the metallurgical engineer and inspection expert this May for undisclosed reasons. But not before Vokes sent general concerns about poor inspection practices within the company to the National Energy Board (NEB), Canada's energy-industry regulator.

The NEB investigated and found "many of the allegations of regulatory non-compliance with NEB regulations were verified by TransCanada’s internal audit."

But it said none of the identified problems posed an immediate risk to the public and it confirmed a TransCanada statement that many of the problems were either fixed, or in the process of being fixed.

Still, the federal regulator warned TransCanada it would not tolerate further infractions of regulations related to welding inspections, the training of pipeline inspectors and internal engineering standards. It also announced a further audit of the company’s inspection and engineering procedures.

TransCanada had sent Vokes, the metallurgical engineer, down to Wyoming in September 2010 to help sort out problems with poor inspections on the Bison pipeline.

Vokes found what he said were examples of shoddy welding and poorly trained inspectors who were not identifying all the welding problems.

"There was a problem with everything," Vokes told CBC News senior investigative correspondent Diana Swain in an exclusive television interview. "It seemed like every time you turned around, there was a new one."

In a statement to the CBC, TransCanada said safety requirements "resulted in increased inspections and audits by PHMSA" and that they "worked co-operatively with the regulator to improve construction practices accordingly." The statement says that in the end, "TransCanada was commended for its exceptional performance" around welding.

Rushed construction troubled ranchers

These latest revelations about TransCanada's inspection and engineering practices come in the midst of a U.S. presidential election campaign in which the proposed Keystone XL pipeline is a major issue.

Landowners in Montana complained about trenches left after the soil on top of the Bison Pipeline sunk in the spring of 2011. (Bob Zellar/The Billings Gazette/Associated Press)

A subsidiary of Calgary-based TransCanada Corp. is proposing to build the controversial $12-billion pipeline to transport 830,000 barrels a day of mostly Alberta oilsands crude to refineries on the U.S. Gulf Coast.

The Bison pipeline passes through Montana rancher Cody Johnson’s land and the proposed Keystone XL extension would also cross his land.

"I pray about every night, that the Keystone one, that they don’t let them come through," Johnson told CBC News. "I don’t want the Keystone line after the Bison one. I didn’t want the Bison line either to be honest with you."

The $630-million US, 487-kilometre Bison pipeline snakes underground from eastern Wyoming to southwestern North Dakota, passing through southeastern Montana.

If you have more information on this story, or other investigative tips, please email investigations@cbc.ca.

Below is a statement from TransCanada Pipelines to CBC News: