This bulk carrier anchored off Vancouver carries just one third the weight of the Exxon Valdez

Oil spill clean up could cost Canadians

SOINTULA — If Enbridge’s Northern Gateway pipeline is approved, Canadian taxpayers could be on the hook for billions of dollars in cleanup costs in the event of a major oil tanker spill, says a report commissioned by Living Oceans Society (LOS).

  • Jan. 20, 2011 9:00 a.m.

SOINTULA — If Enbridge’s Northern Gateway pipeline is approved, Canadian taxpayers could be on the hook for billions of dollars in cleanup costs in the event of a major oil tanker spill, says a report commissioned by Living Oceans Society (LOS).

A report written by the Environmental Law Clinic at the University of Victoria concludes that according to Canada’s oil spill regulations, Enbridge is not responsible for any of the costs associated with a spill once the oil is loaded onto tankers. The report is titled Financial Vulnerability Assessment: Who Would Pay for Oil Tanker Spills Associated with the Northern Gateway Pipeline.

If the Northern Gateway project passes an environmental review, its twin pipelines running from Alberta’s tar sands to a marine terminal in Kitimat, B.C. would be serviced by an average of 225 oil tankers per year, each carrying between 700,000 and two million barrels of crude oil, said LOS in a press release. (The Exxon Valdez was capable of carrying 1.48 million barrels of oil.) Currently, there are no tankers carrying crude oil through the waters of British Columbia’s North Coast, said LOS.

“Enbridge won’t have to pay one dime to clean up a spill caused by an oil tanker loaded with crude from their pipeline,” said Jennifer Lash, executive director of LOS. “Liability for oil pollution from a tanker lies strictly with the ship’s owner and their limit of liability ends at $140 million.”

In an email to the Gazette, Enbridge spokesperson Gina Jordan said there are provisions in place for oil spills.

“For spills originating from a ship, the ship owner would be responsible. Under Canadian law and international conventions, ship owners are required to carry insurance to cover spill damages. In addition, shippers of oil pay into international and Canadian pollution funds to cover the costs of spills over and above insured losses,” wrote Jordan. “The international standards and procedures for spill compensation provide up to $1.33 Billion  in coverage, an amount determined by nations around the world to be appropriate and sufficient to cover the costs of most, if not all types of oil spill events.

“In the event of a spill from a ship, Northern Gateway would liaise with the community and the pollution fund administrators to make sure that those losses are also fairly reviewed and covered,” continued Jordan. “Together with our Community Advisory Board, we would take the lead in making sure that people are fairly dealt with and have access to the funds that have been set up to deal with ship-sourced pollution events.  In either event, Northern Gateway accepts our responsibility to the community to make sure that people do not suffer losses from our project and from ships calling on the Northern Gateway Kitimat Terminal.”

Lash added more information.  

“Canada is a member of international oil spill funds that cover costs once the tanker owner reaches that limit. Those funds, along with Canada’s own domestic fund of $155 million and the money paid by the tanker owner, provide a total of $1.33 billion for clean up and compensation,” said Lash. “Less than half the $3.5 billion US to clean up after the Exxon Valdez spilled 257,000 of the 1.3 million barrels of oil it was carrying. This does not include losses from passive-use industries such as sport fishing and tourism.”

Estimates for the BP oil spill in the Gulf of Mexico last year are as high as $100 billion US.

“Our commercial fishing, shellfish aquaculture, and tourism industries that employ thousands people on the coast could be severely damaged, and Canadian taxpayers would be left to clean up the mess while Enbridge watches from the shoreline,” said Lash “A better economic plan for this part of Canada is a ban on oil tankers which would allow our coastal economy to thrive and reduce the financial risk to taxpayers.”

Enbridge says that Northern Gateway will contribute $2.6 billion in tax revenue over its 30-year lifespan.

An audit released on December 7, 2010 by the Commissioner of the Environment and Sustainable Development found that the Canadian government and Coast Guard are unprepared to deal effectively with a catastrophic oil spill.

“The main weather impacts on shipping include sea states caused by strong winds and sea fog,” said Jordan. “To mitigate these climatic states, vessel movements within the channel will only take place in conditions that are safe and within navigational limits.”

Living Oceans Society believe that even if adequate containment measures were in place, a spill equivalent to the Exxon Valdez, that does not make the top fifty on the list of the world’s largest oil spills, could saddle Canadian taxpayers with upwards of 67 per cent of the clean up and compensation costs.

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