Policy: Environment & Energy

Canada: Pipeline firms will pick up spill costs

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News,Business,Canada,Energy and Environment,Oil,Pipelines

TORONTO (AP) — Pipeline companies will be liable for all costs and damages from a spill, regardless of fault or negligence under a new law, the Canadian government announced Wednesday, as it appears set to approve a controversial pipeline.

Natural Resources Minister Greg Rickford made the announcement in British Columbia, where there is fierce opposition to two proposed pipelines that would deliver oil from the Alberta oil sands to the Pacific coast. Tankers would then take the oil to Asia, mainly energy-hungry China.

Enbridge's Northern Gateway project would transport 525,000 barrels a day from Alberta to Kitimat, British Columbia. Kinder Morgan's Trans Mountain expansion would almost triple the current capacity of a pipeline to Vancouver's port to 900,000.

The federal cabinet is widely expected to approve the Northern Gateway project next month. Prime Minister Stephen Harper's Conservative government has staunchly supported Northern Gateway after the United States delayed a final decision on TransCanada's Keystone XL pipeline that would take oil from Alberta to the U.S. Gulf Coast.

But there is fierce environmental and aboriginal opposition. Opponents fear pipeline leaks and a potential Exxon Valdez-like disaster on the pristine Pacific coast. About 220 large oil tankers a year would visit the Pacific coast town of Kitimat. There is no guarantee Northern Gateway will be built. Court challenges are expected.

New pipelines are important for Canada, which needs infrastructure in place to export its growing oil sands production. The northern Alberta region has the world's third largest oil reserves, with 170 billion barrels of proven reserves.

Oil companies have increasingly turned to rail to transport oil but there are safety concerns. A runaway oil train exploded in Lac Megantic, Quebec last July, killing 47 people. Some safety measures to deal with the oil train boom have since been announced.

Rickford said pipeline operators will also have to have a minimum amount of cash available to pay cleanup costs and Canada's energy regulator will be given the power to order reimbursement for those affected by a spill.

"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," Rickford said.

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