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Oil industry on hook for future spill cleanup costs

An ocean supertanker is seen docked at the Irving Canaport Facility in Saint John, New Brunswick, March 9, 2014.


The federal government says it will force industry to pay all cleanup costs in the event of oil spills from super tankers as it tries to build support for proposed energy-export projects on the East and West coasts.

In a speech in Saint John on Tuesday, Transport Minister Lisa Raitt announced a series of measures aimed at bolstering tanker safety.

The Harper government is expected to make a decision next month on Enbridge Inc.'s Northern Gateway pipeline project, which would carry 525,000 barrels of oil sands bitumen per day to Kitimat, B.C., to be loaded onto tankers for export to Pacific markets. It is widely expected to approve the project in light of a federal review panel report issued in December that the pipeline and resulting tanker traffic would not pose undue environmental risks.

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"These new measures, once implemented, will make Canada a world leader in tanker safety and, in effect, ensure Canada has a world-class tanker safety system," Ms. Raitt said.

The new safety measures reflected recommendations made to the government by a blue-ribbon panel, which reported last December and concluded Canada still had considerable work to do to create a world-class safety system, saying there were serious gaps in the industry's ability to respond to a worst-case tanker accident.

The government will raise the liability limit on ship-sourced pollution costs from $161-million to $400-million, to be paid from an industry fund. The Transport Minister said that, in the event a company exhausted domestic and international pollution-related funds, the government would pay costs to eligible claimants and recover the money through an industry levy.

Ottawa will also establish four area-specific response plans for southern British Columbia, the Bay of Fundy, the Gulf of St. Lawrence and Port Hawkesbury, N.S. Eastern ports can expect a surge in tanker traffic if TransCanada Corp. succeeds in building its proposed Energy East pipeline, which would carry 1.1 million barrels a day of western crude to eastern refineries and export terminals.

A spokeswoman for Ms. Raitt said the four designated areas are already well-travelled. "Should tanker traffic increase in Kitimat, we will immediately undertake expedited area-response planning at Kitimat and in the [nearby] Douglas Channel so that a risk-based regime is in place," Jana Regimbal said in an e-mail.

B.C. Minister of Environment Mary Polak welcomed the changes, but said she is not yet sure if they will meet her province's demands for a "world-class" oil-spill response system.

The B.C. government has set out five conditions that must all be met before it will approve any new heavy oil pipeline construction. "We're very pleased to see this significant step," she told reporters in Victoria.

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To date, none of the five have been met, and the province says it can block any pipeline construction by denying environmental certificates if it believes risks are not being adequately mitigated.

"But when you consider where we were at the beginning when we announced our five conditions and where we are now with the federal government, we are feeling very pleased with the way in which they have worked toward our goals," Ms. Polak said.

In Ottawa, NDP MP Nathan Cullen welcomed the safety measures but said they do not address concerns of people in northern British Columbia regarding the risk posed by the Northern Gateway project. "There are some places tankers should not go at all," he said.

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About the Authors
Global Energy Reporter

Shawn McCarthy is an Ottawa-based, national business correspondent for The Globe and Mail, covering a global energy beat. He writes on various aspects of the international energy industry, from oil and gas production and refining, to the development of new technologies, to the business implications of climate-change regulations. More

B.C. politics reporter

Based in the press gallery of the B.C. Legislature in Victoria, Justine has followed the ups and downs of B.C. premiers since 1988. She has also worked as a business reporter and on Parliament Hill covering national politics. More


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