May 14, 2014 6:42 pm

Pipeline firms to pay all costs, damages in new spill safety rules

WATCH: With just weeks to go until the federal government makes a decision on the controversial Northern Gateway pipeline, the Conservatives are announce new pipeline safety legislation that will apply to all old and new pipelines. Vassy Kapelos explains.

VANCOUVER – Pipeline companies will be liable for all costs and damages related to oil spills, regardless of whether they are at fault, the federal natural resources minister announced Wednesday as he unveiled the latest change to Ottawa’s pipeline regime.

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Natural Resources Minister Greg Rickford said pipeline operators will also be required to have a minimum amount of cash available to pay cleanup costs, and the National Energy Board will be given the power to order reimbursement for those affected by a spill.

“Pipeline companies will be held fully liable for all incidents,” Rickford said at an event in Vancouver.

“The idea here is that even in the most extreme, rare or unlikely circumstances (of a major spill), the government will ensure that the environment, landowners and taxpayers are protected and that the polluter pays.”

A day earlier, Transport Minister Lisa Raitt was in Saint John, N.B., to announce changes to marine safety regulations. Those measures included a $400-million compensation fund to cover the costs of a marine spill.

Rickford made Wednesday’s announcement in a province that is in the midst of a divisive debate about two major pipeline proposals – Enbridge’s Northern Gateway and Kinder Morgan’s expansion of its Trans Mountain line – both of which would traverse B.C. carrying heavy crude from Alberta.

Alberta Premier Dave Hancock issued a written statement applauding the changes announced Wednesday, which he said would “build on the principles of prevention, liability and preparedness.”

“Pipelines are a safe, efficient and reliable way for Canada to move its oil and gas products, and are critical to accessing key global markets for Canada’s energy products,” the statement said.

“Every Canadian, no matter what province or territory they call home, expects that energy development is done with a high degree of environmental safeguards and the province of Alberta supports initiatives like those announced today that strengthen the responsible development of energy resources.”

In B.C., the provincial government 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, it 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.”

The consultation paper issued by the B.C. Environment Ministry said the province intends to develop clear and effective standards for preparedness, response and restoration in the event of a spill even though regulations on issues such as rail and pipeline safety fall under the jurisdiction of Transport Canada and the National Energy Board.

The $6.5-billion Northern Gateway project proposed by Calgary-based Enbridge (TSX:ENB) would transport about 525,000 barrels a day of diluted bitumen from the Alberta oil sands 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 US$131 billion 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.

© The Canadian Press, 2014

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