Feds aim to calm public fears over pipeline safety

Major pipeline companies will have to prove they have access to $1 billion to cover the costs of an oil or gas spill under new rules announced by Nature Resources Minister Joe Oliver.
Major pipeline companies will have to prove they have access to $1 billion to cover the costs of an oil or gas spill under new rules announced by Nature Resources Minister Joe Oliver.

Natural Resources Minister Joe Oliver says new rules for pipeline companies make a safe system safer and the companies more accountable.

But even as he touted tougher penalties and expectations of corporate transparency, he said there’s no need for the National Energy Board to beef up enforcement or publish its own investigation and inspection reports.

“I don’t think were talking about that,” Oliver told Global News in an interview Wednesday. “The system is quite transparent now. It’ll become even more transparent in the future.”

Video and transcript: Full interview with Joe Oliver

The new rules, announced in Vancouver a day after U.S. President Barack Obama issued an unclear ultimatum on the fate of TransCanada’s Keystone XL pipeline, require companies to prove they can cover $1 billion worth of damages.

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The changes also require energy companies to police themselves more strictly: They’ll need to make their emergency and environmental plans publicly available and appoint an “accountable senior officer” to ensure they’re following the rules

Ottawa will also formalize a “polluter pay” provision to keep corporations on the hook for damage; and, as of July 3, increase penalties for rule-breaking companies to a maximum of $100,000 a day “for continuing infractions, as long as they haven’t corrected them,” Oliver said (the government can also take companies to court, where they could face fines of up to $1-million).

The National Energy Board, which is responsible for all pipelines crossing provincial or national borders, has come under fire for failing to enforce its own rules: As a Global News investigation laid out, both national and provincial energy regulators in Alberta have been accused of being lax in enforcement and not keeping pace with energy industry growth.

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A 2011 audit found the board wasn’t sufficiently documenting its inspections and, even when it found deficiencies, wasn’t always following up.

“The National Energy Board is enforcing its rules,” Oliver said. “What we’ve done, as well, is added administrative monetary penalties.”

Both energy companies and oilsands opponents have argued that regulator opacity makes it tough for the public to stay informed.

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It emerged earlier this year that most of Enbridge’s pump stations weren’t in compliance with a safety requirement the board hadn’t checked for previously.

(At the time, Enbridge said it would never knowingly break the rules – and that the board itself had signed off on their safety standards and hadn’t enforced this measure before.)

These new rules are “long overdue and it’s promising to see,” said Pembina Institute policy analyst Nathan Lemphers. “The real question will be whether the government enforces its safety measures, as well. Ottawa has a history of failing to enforce its pipeline safety rules.”

Oliver said the board has “world-class standards” when it comes to pipeline safety regulation. He noted that 99.9996 per cent of oil is transported safely.

“Yes, [pipelines] are safe. … We can’t be complacent, and we’ve got to make them safer still.”

The safety of Canada’s growing pipeline network has come under increasing scrutiny as hydrocarbon giants try to gain approval for ambitious projects.

TransCanada’s Keystone XL, which would carry crude from the oilsands to the Gulf of Mexico, has inspired vocal opposition. Its fate remains uncertain: President Barack Obama said Tuesday the State Department should approve it only if it doesn’t “significantly” add to greenhouse gas emissions. Both the pipeline’s boosters and opponents called that caveat a victory.

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“We are encouraged that the State Department’s draft Supplementary Environmental Impact Assessment concluded Keystone XL would not increase greenhouse gases,” the Alberta government said in a statement.

But the Sierra Club said in a release that Obama’s statement “could spell the end of the project.”

“If the federal government wants Keystone to be approved,” Lemphers said, “it needs to come up with a credible plan to address carbon emissions, as well as pipeline safety.”

Energy executives and the Alberta government say Canada is losing billions of dollars a year because an oilsands glut is keeping Canadian oil from markets in Asia and elsewhere.

Also on the table are major pipeline proposals carrying crude oil from Alberta to New Brunswick (TransCanada’s Energy East) and from Sarnia, Ont. to Montreal (Enbridge’s Line 9).

Federal review panel hearings just concluded on Enbridge’s Northern Gateway project from Alberta to B.C.’s cost. The BC government rejected the project as is, but Oliver thinks it can still go through.

“BC didn’t reject Northern Gateway,” he said. “What the government of British Columbia said is that the pipeline as currently planned doesn’t meet their environmental criteria. But that does not preclude the possibility that, with changes, it might well do so.”

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TransCanada spokesman Shawn Howard said the company, displaced from its Calgary offices by devastating floods, is still trying to ascertain the impact of the new rules.

“In the unlikely event of a spill, we are required by law to pay those costs and keep landowners whole. If there are legislative or regulatory changes that the Government of Canada is considering putting in place to provide additional protection for Canadians, we will wait to see what those proposals are and how they can be achieved,” he said in an email.

“In principle, we support having strong, robust pipeline safety regulations in place to help improve public confidence and measures that demonstrate our ability to operate our energy infrastructure networks safely and reliably.”

With a report from the Canadian Press

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