Canada Boosts Support for Pipelines With Spill Safeguards

The Canadian government is boosting support for Enbridge Inc. (ENB)’s proposed Northern Gateway project by announcing steps to prevent spills from pipelines and tankers carrying crude.

Federal Natural Resources Minister Greg Rickford said yesterday the government will increase the liability of pipeline operators for spills and give regulators more power to enforce safety rules. The previous day, the government said it will beef up oversight of oil-tanker traffic by drafting safety plans for four heavily used zones, including southern British Columbia.

Prime Minister Stephen Harper is trying to build public support for new pipelines as his government prepares to rule on the proposed C$6.5 billion ($6.0 billion) Northern Gateway, which would carry bitumen from the nation’s oil sands to the Pacific coast. While crude producers say the route is needed to ease bottlenecks that are depressing the price of Canadian heavy oil, environmentalists and aboriginal groups have raised concerns about the risk of spills.

Harper’s cabinet has until June 17 to decide on the route after a regulatory panel recommended approval in December, subject to 209 conditions.

British Columbia Premier Christy Clark has said her province will only back the pipeline if its satisfies five conditions, including “world-leading” spill prevention and response systems on land or water. Transport Minister Todd Stone called the federal government’s spill safeguards “very good steps in the right direction.”

Approval Conditions

“Are we all the way there?” Stone said yesterday at a news conference in Vancouver with Rickford and federal Transport Minister Lisa Raitt. “There’s always more that can be done.”

B.C. has also said its support is conditional on the federal government addressing aboriginal concerns, and on the province receiving a “fair share” of the project’s financial benefits.

Rickford said the measures announced yesterday aren’t connected to Northern Gateway. He said cabinet will release its decision on the Enbridge project in the “not-too-distant future.”

Companies that operate major pipelines will be required to have access to C$1 billion in funds for the cleanup of spills under the measures announced yesterday. The government plans to introduce legislation that will hold operators liable for that amount even if they weren’t at fault or negligent, Rickford said. When operators are at fault, their potential liability will be unlimited.

“Even in the most extreme and unlikely circumstances, the government will ensure that the environment, landowners and taxpayers are protected and the polluter pays,” Rickford said.

The National Energy Board, which regulates pipelines, will gain powers to advise operators on safety, including which materials to use and how to respond to emergencies. Regulators will also have the authority to take over cleanup operations if a company is unable or unwilling to do so. Rickford also said the government will “better integrate” input from aboriginal groups into pipeline safety.

To contact the reporter on this story: Andrew Mayeda in Ottawa at amayeda@bloomberg.net

To contact the editors responsible for this story: Paul Badertscher at pbadertscher@bloomberg.net Chris Fournier

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