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Canada to raise offshore liability cap
Canada’s offshore players — explorers, producers, pipelines and marine shippers — have been told by Environment Minister Peter Kent they can expect a new regime that will include “significant” changes to liabilities for polluters.
He said legislation will shortly be introduced in response to the pressure to diversify Canada’s oil and natural gas markets, offshore drilling and greater pipeline shipments.
Government sources have indicated the liability cap could be raised to “billions of dollars” from the current C$40 million in the Beaufort Sea and C$30 million off the East Coast, which have been described since BP’s Macondo well blowout, as de facto subsidies for offshore operators.
The sources suggest that the industry will have to either buy insurance or “self-insure” to cover the financial risks from a blowout or spill.
Natural Resources Minister Joe Oliver said the liability system is being reviewed “to make certain that Canada’s polluter-pay system remains among the strongest in the world” at the same time the government is strengthening maritime protection by requiring double-hulled vessels, enhanced navigational aids and increasing inspections of federally regulated pipelines by 50 percent.
Pressures intensifying Those pressures have been intensifying as the petroleum industry has advanced plans to export oil sands bitumen and LNG from the British Columbia coast and companies move forward with plans to explore the Beaufort and the Atlantic offshore regions.
Travis Davies, a spokesman for the Canadian Association of Petroleum Producers, said the organization is working with its member companies in Atlantic Canada to develop an industry position on changes to the existing regime in hopes of being consulted on what changes the government is contemplating.
“Once we have a position, we’ll be constructive participants in the government process, submitting input which will be public,” he said.
Will Amos, director of the Ecojustice environmental law clinic at the University of Ottawa, said companies “should face unlimited absolute liability for spills, in accordance with the polluter-pays principle,” arguing that an “offshore spill lingers forever.”
Scott Vaughan, Canada’s commissioner of the Environment and Sustainable Development, is scheduled to release a report in February that examines what systems are in place to protect taxpayers against the cost of accidents in the mining, nuclear, offshore oil and gas and marine transportation sectors.
—Gary Park
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