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Canada in a hurry Government unveils back-to-back actions to improve safety of overland, tanker petroleum transport; industry to carry cleanup costs Gary Park For Petroleum News
As the Canadian government faces an early and landmark decision on moving crude bitumen to Asia it is scrambling to win over a hesitant public.
Hard on the heels of new measures to fortify its oil-spill response and tanker safety regime, the administration of Prime Minister Stephen Harper announced tougher regulations for pipelines, hoping to take a “big step” towards meeting the demands of the British Columbia government and First Nations.
The changes will give the National Energy Board greater control over 46,000 miles of federally regulated pipelines that carry more than C$100 billion a year of oil, natural gas and petroleum products within Canada. In total Canada has more than 500,000 miles of pipelines, the bulk under the control of provinces.
Natural Resources Minister Greg Rickford and Transport Minister Lisa Raitt said the NEB will be required to increase the number of pipeline inspections by 50 percent annually and to double the number of safety audits.
Responsibility for cleanups In addition, the government will impose absolute liability on pipeline companies by making them responsible for cleanups, without needing to be proven negligent or at fault.
Rickford said the pipeliners would need to establish a C$1 billion fund to deal with spills and give the NEB authority to ensure the proper management of cleanups, while the government will cover any accident-related costs that a company is unable to pay, leaving the NEB to recoup that money from the industry.
He also said First Nations will be involved in safety planning and spill response, insisting those communities must play a “key, integral, absolutely critical role” in resource development, estimating that over the next decade 400,000 aboriginal young people will be entering the workforce, creating an unprecedented opportunity to address the need for new workers in the petroleum industry, noting that in 2012 13,500 aboriginal people were employed in the industry.
Not project specific Rickford denied that the new rules are linked to any specific project, such as Enbridge’s Northern Gateway, which faces a critical decision in June by the federal cabinet, insisting they are designed to establish an unmatched regime for pipeline safety.
“Even in the most extreme, rare or unlikely circumstances, the government will ensure that the environment, landowners and taxpayers are protected and the polluter pays,” he said, adding “there is no country in the world that transports oil and gas as safely as Canada.”
Despite that boast, he said Canada needed to “do more, particularly in the area of liability and compensation to ensure that pipeline operators are fully accountable for their operations in all potential circumstances.”
Speaking about the delicate efforts to gain buy-in from First Nations, Rickford also said a strategy will be developed to increase participation by aboriginal communities, along with provincial and territorial governments and the industry to make Canada “a supplier of energy to the world.”
Rickford noted that 99.999 percent of oil and petroleum products are safely transported on federally regulated pipelines and the latest measures “aim to improve Canada’s record even further.”
He said the rate of spills on federally-controlled pipeline in Canada was 57 percent lower than in Europe and 60 percent lower than in the United States over the past decade.
Some BC support British Columbia Transport Minister Todd Stone would not say whether the proposals, which must still be introduced in the House of Commons, meet the province’s criteria for endorsing pipelines, but said they are a “step in the right direction.
“Are we all the way there? I think there’s always more than can be done, but what I think is demonstrated by the federal government is a very strong commitment towards ensuring that the standards here in Canada will be world-leading,” he said, in by far the most positive indication that the two governments are on track to reach an agreement on oil and LNG export projects.
British Columbia Premier Christy Clark said the announcement shows that the rest of Canada is coming to grips with British Columbia’s concerns about heavy oil pipeline development.
“I think having world-leading national standards is a big step,” she said, while putting pressure on the Canadian government to ensure it follows through with regulatory details.
“It has been a process of education,” Clark said. “British Columbia is a long way from Ottawa (Canada’s capital) and it has taken a little bit of time to make sure everybody in the country understands why in British Columbia we are so concerned about protecting our coastline and our land base.”
Clark’s province is deeply divided over the 525,000 barrels per day Northern Gateway project and Kinder Morgan’s application to triple capacity on its Trans Mountain system to 890,000 bpd.
Alberta Premier Dave Hancock said the new rules “strengthen the responsible development of energy resources.”
“Every Canadian, no matter what province or territory they call home, expects that energy development is done with a high degree of environmental safeguards,” he said in a statement.
There has never been a case in Canada of a pipeline company failing to deal with a spill or rupture and none has exceeded C$1 billion in cleanup costs.
Ziad Saad, vice president of safety for the Canadian Energy Pipeline Association, said the government is taking welcome steps to handle extreme events.
“We are clarifying and strengthening those provisions to ensure the public that they won’t be on the hook in case of a pipeline incident,” he said.
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