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‘Polluter pays’ bill puts energy firms on the hook for cleanup

Joe Oliver says his Tory government is ‘committed to world-class safety standards’ in the offshore and nuclear sectors.

Deborah Baic/The Globe and Mail

Natural Resources Minister Joe Oliver introduced legislation Thursday to increase company liability for offshore oil spills and nuclear accidents to $1-billion, an act that will enshrine into law a "polluter pays" principle.

Under the bill, companies exploring for oil off Canada's East Coast or offshore in the Arctic would also have to show financial capacity by depositing with regulators $100-million individually, or up to $250-million in a pooled fund that would be available to begin cleanup in the event of a major accident.

Nuclear companies would also face an increased liability limit of $1-billion for accidents that were not faults of the operators. In both cases, there would continue to be no limits of liability when companies were at fault.

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"I want Canadians to understand that this government takes safety extremely seriously, and in fact, we're committed to world-class safety standards in the offshore and in the nuclear sector," Mr. Oliver told reporters.

For East Coast operators, the federal government is working with Nova Scotia and Newfoundland and Labrador, which need to pass similar legislation to cover the joint federal-provincial offshore petroleum boards. In the Arctic, the National Energy Board will apply the new rules as it considers an application by Imperial Oil Ltd., Exxon Mobil Corp. and BP PLC to commence a drilling program in the deep water of the Beaufort Sea.

However, critics say the limits are far too low given the high cost of responding to major offshore oil spills. BP PLC spent at least $30-billion in dealing with the blowout of the Macondo well in the Gulf of Mexico in 2011.

New Democratic Party MP Peter Julian said the government merely pays lip service to safety.

"I don't believe the Conservatives are actually in the game of providing world-class standards," Mr. Julian said. "Nothing that they've done to date shows that they're actually interested in world-class standards."

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About the Author
Global Energy Reporter

Shawn McCarthy is an Ottawa-based, national business correspondent for The Globe and Mail, covering a global energy beat. He writes on various aspects of the international energy industry, from oil and gas production and refining, to the development of new technologies, to the business implications of climate-change regulations. More


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