Pipeline companies to be liable for $1B even when not at fault

The federal government is introducing legislation to make companies on all federally regulated pipelines responsible for the first $1 billion in cleanup costs from an oil spill, even when they're not at fault.

Speaking Wednesday in Vancouver, Natural Resources Minister Greg Rickford said the government is building on pipeline safety legislation it introduced last year.

The new measures will ensure companies are fully liable and provide compensation for damage to the environment.—Greg Rickford, federal natural resources minister

"All companies will continue to have unlimited liability when at fault or negligent," he said.

Rickford said the government will also introduce legislation to give the National Energy Board (NEB) expanded powers, including the authority to take over and fund pipeline spill cleanups in worst-case scenarios.

"The government of Canada will ensure that the National Energy Board has the resources it needs for spill cleanup and that those costs are recovered from industry to ensure that taxpayers are protected," said Rickford.

"In these exceptional circumstances, the government is prepared to cover the initial cost of incident response, and the National Energy Board will recover costs from pipeline companies."

Rickford said the NEB will be given the authority to order reimbursement of any cleanup costs incurred by government, communities or individuals.

"The new measures will ensure companies are fully liable and provide compensation for damage to the environment and property in the event of a spill," he said.

The NEB will also be given the power to provide guidance on the use of best technologies when building federally regulated pipelines, including construction methods, and emergency response techniques.

Under the proposed legislation, companies would be required to maintain a cleanup cash reserve of at least $100 million to ensure they have the financial resources to respond to incidents and remedy damage without delay.

A key part of today's announcement is a pledge by the government to include aboriginal communities in pipeline safety and planning and any related opportunities they might present.

It's the latest in a number of changes to marine and pipeline safety as British Columbia is divided by debate over two major pipeline proposals in the province.

On Tuesday, Transport Minister Lisa Raitt announced changes to marine safety regulations around oil spills, including a $400 million compensation fund to cover the costs of a marine spill.

B.C.'s 5 conditions

The province has set out five conditions for supporting any oil pipeline project, including an undefined "world-leading" oil spill response and prevention on land and at sea.

B.C. Environment Minister Mary Polak released a consultation report last month on the land-based spill regime, which was described as a "complex matrix of regulations and policies." The provincial emergency management department, the B.C. Oil and Gas Commission, the National Energy Board, Transport Canada, municipal governments and others all have a role.

There are gaps in the existing regulations, the report said. And there will be an increase in the movement of oil and other hazardous materials through the province. In fact, there already has been.

From February 2012 to February 2013, there was a 60 per cent jump in the amount of crude oil being shipped by rail in Canada, "with continued growth being forecast."

Earlier this week, the B.C. government and the City of Vancouver openly questioned Kinder Morgan's ability to handle a heavy oil spill from its proposed $5-billion expansion of its Trans Mountain pipeline through B.C.

In April, the town of Kitimat, B.C., also concerned about a major oil spill, voted no to Enbridge's Northern Gateway pipeline proposal.

The $6.5-billion Northern Gateway project proposed by Calgary-based Enbridge would transport about 525,000 barrels a day of diluted bitumen from the Alberta oilsands to a marine terminal in Kitimat, on the northern B.C. coast.

The $5.4-billion Trans Mountain expansion proposed by Texas-based Kinder Morgan would almost triple the current capacity from Alberta to Port Metro Vancouver, from 300,000 barrels a day to almost 900,000.

Opponents of the pipeline proposals point out that together, they would result in more than 600 additional oil tankers a year plying the B.C. coast.

Supporters point out that the export capacity from the West Coast would contribute an estimated $131 billion US to Canada's gross domestic product between 2016 and 2030, according to a University of Calgary study.

The federal government is expected to announce its final decision on the contentious Northern Gateway pipeline next month.