There’s no denying how crucial resource development is to this country. Without it we wouldn’t enjoy the high standard of living that we do – a fact often overlooked amid the rancorous debate that constantly envelops this sector of the economy.
In 2010, it provided Canadians with 750,000 jobs. And the federal government estimates that the more than 600 resource projects either under way or in the planning stages, represent $650-billion in new investments over the next 10 years. In 2011, resource extraction contributed $66-billion toward the country’s gross domestic product.
This is why it’s vital that the government not only safeguard these assets but also do everything possible to meet the challenges being issued by environmental watchdogs rightfully highlighting the risks that these ventures represent. When the government fails on this front, it undermines its case for taking advantage of new resource opportunities – such as the Northern Gateway pipeline.
Which brings me to the release this week of a report by federal Environment Commissioner Scott Vaughan that, among other things, pointed out how important it is that the country’s environmental protections keep up with economic development. Something that hasn’t been happening in recent years.
The observation that received the most attention in B.C. was his assessment that the government is inadequately prepared for an oil spill that could result from a hole opening up on a massive oil tanker.
He said there are only plans in place to handle a leak of up to 10,000 tonnes. The football-field-sized boats that would be coming to B.C. to load up on crude gushing through the proposed Northern Gateway pipeline, for instance, can handle more than 300,000 tonnes.
That bit of news was the last thing Ottawa, or the Alberta government for that matter, needed to hear. It was simply more ammunition for the forces fighting to kill the project and any like it. That’s why it was so dangerous for a Conservative government that sorely needs the tax dollars these projects generate.
Mr. Vaughan was equally concerned about the current level of liability funding in place in the event an accident occurred. Right now that figure is about $1.3-billion per spill. In 2002, a tanker that lost 63,200 tonnes of oil off the coast of Spain produced damage claims exceeding $1.4-billion.
It should also be pointed out that the commissioner said tanker oil spills have decreased over the past two decades and are, in fact, rare because of modern navigation equipment and improved, double hull construction. But that fact was mostly lost in media reports that zeroed in on the alarms that the commissioner was sounding.
Mr. Vaughan issued similar worries about our capacity to handle problems erupting from offshore oil and gas activities in the Atlantic.
“We identified several shortcomings, including insufficient spill response tools across the federal government, inadequately tested capacity, poorly co-ordinated response plans, and out-of-date or missing agreements between the boards and supporting departments,” the commissioner wrote.
He said the liability limits for incidents involving offshore oil and gas development have not been updated in 25 years and range up to $40-million. Our thresholds are significantly lower than other countries. As a bit of context, Mr. Vaughan pointed out that the commission looking into the BP Deepwater Horizon spill (where damage claims exceeded $40-billion US) found that the $75-million liability limit in place in the U.S. was totally inadequate and placed taxpayers at risk.
He found similar liability exposure issues in our nuclear industry.
Meantime, the oversight regime governing resource development in the Far North sounds almost non-existent. The commissioner said that Aboriginal Affairs and Northern Development Canada was not conducting the required inspections essential to ensuring the terms and conditions of project approvals are being met.
In 2011, more than 70 per cent of required site visits were not conducted. It’s basically an environmental free-for-all.
As I say, none of this helps a federal government witnessing increasing hostility toward several major resource development proposals, including Northern Gateway and the Kinder Morgan pipelines in B.C. The government will only damage the prospects for these projects even further – if that’s possible – by playing fast-and-loose with the rules.
The Prime Minister needs to take Mr. Vaughan’s report seriously and assure Canadians that Ottawa will guarantee that natural resource development and environmental stewardship move forward in lockstep. Otherwise, the environmental battles we see now will only grow bigger and more costly.