New pipeline rules don't reach 'world class' standard

The federal government announced a handful of proposed changes governing pipeline spills earlier this week, but pipeline watchers, environmental groups and First Nations communities are greeting the proposed reforms with some skepticism.

New regulations seen as big improvements, but don't go far enough, critics say

The federal government's proposal for new measures comes ahead of a final decision next month on the controversial Enbridge Northern Gateway pipeline. (Darryl Dyck/Canadian Press)

The federal government announced a handful of changes to how oil and gas pipelines are run earlier this week, but pipeline watchers, environmental groups and First Nations communities are greeting the proposed reforms with some skepticism.

The measures include a $1-billion absolute liability for oil spills, more consultation with First Nations and expanded powers for the federal regulator, the National Energy Board, which oversees 73,000 kilometres of pipeline.

The Tuesday announcement by Transport Minister Lisa Raitt and Natural Resources Minister Greg Rickford came shortly after another proposed regulatory change that would put oil tankers on the hook for the cleanup costs of any spills. 

Both are seen as an effort to shore up support ahead of the federal cabinet decision due by next month on Enbridge's controversial Northern Gateway pipeline project. The 1,200-kilometre line would transport Alberta's oil sands bitumen across B.C. to Kitimat for export to Asia. 

These new rules seem "very closely timed to the upcoming cabinet decision on the Northern Gateway pipeline that everyone's waiting for," said Nathan Lemphers, former senior policy analyst with the Pembina Institute and a specialist in pipeline safety.

Lemphers says some of the proposed rules are big improvements, but still don't go far enough, particularly the $1-billion absolute liability for oil pipelines involved in a spill, regardless of whether or not they are at fault.

That absolute liability means a pipeline operator is liable for any cleanup costs and compensation from an oil spill, up to $1 billion, regardless of whether it is at fault. 

Under absolute liability there is no defence in court to being off the hook for a spill. Under what is called strict liability, if a company can show that it was not negligent, it can try to get others to pick up or help with the tab, a procedure that can often drag on for years.

In the territories, pipeline operators face a maximum $10-30 million in absolute liability, depending on location,  says Ecojustice lawyer Pierre Sadik.  Unlimited absolute liability applies to some spills that harm waters with fish present.

But there are essentially no liability rules for federally regulated pipelines, which include those that cross provincial borders.

The Canadian Energy Pipeline Association says the liability change only formalizes the polluter-pay principle that its members already adhere to.

"The only real difference is that the expectation is public and more formal," CEPA's vice-president of external relations, Philippe Reicher, wrote in an email.

'Why choose $1 billion?'

Environmental groups have advocated that the government institute an unlimited absolute liability, rather than capping the amount.

"Absolute liability means no ifs,  ands or buts. You're on the hook for it, as much as it costs, assuming you have the money," said the Ottawa-based  Sadik.

Having an unlimited absolute liability can also motivate companies to use best practices and manage their risks.

Ultimately, Sadik argues, it's best to have that deterrent because studies suggest that in most pipeline spills, only a small portion can ever be cleaned up. The rest of the spill tends to sink into the soil or dissipates.

"Why choose $1 billion over unlimited given that we've already seen that pipeline spills can exceed $1 billion?" asks Lemphers. "It certainly is in contrast to their  aspirational goals of world-class standards." 

In Tuesday's announcement, the government touted its efforts to enhance "Canada's world-class pipeline safety system."

But an Enbridge pipeline that ruptured and spilled 3.3 million litres of bitumen into Michigan's Kalamazoo River in 2010 has already cost more than $1 billion in cleanup and compensation. 

"It's likely if the same spill happened on the Northern Gateway, given the terrain, it would be much more expensive than $1 billion," said Lemphers.

Sadik notes that Norway and Greenland have instituted unlimited absolute liability on their pipelines.

'Defeats the purpose'

Another measure proposed by the federal government aims to make sure that First Nations communities are not only informed of the planning stage for pipelines, but also about the operations and any response regarding something like a fire or spill. 

Lemphers said First Nations involvement in the pipeline process at all stages should already be required. "They should already be reaching out to those communities under existing regulation."

Baptiste Metchooyeah, of the Dene Tha' First Nations in northern Alberta, knows from experience that's not always the case.

It took nearly five years for his First Nations community to hear details of a fiery pipeline explosion that happened on their hunting and trapping land and the cleanup that followed. 

"I think it's good to have information that is transparent," said Metchooyeah, consultation manager with the Dene Tha' First Nation lands office.

But he fears that putting in new regulations doesn't mean they'll be enforced, especially in remote parts of the country.

"There's always something that defeats the purpose of certain guidelines and regulations that are written when the priority is given to the economic component of the decisions," he says.

The NEB says companies are already required to notify and liaise with First Nations communities if an emergency happens, and that it also liaises with aboriginal groups during the emergency and remediation phases.

'Nothing new or revolutionary'

Other measures are aimed at giving the federal regulator increased authority, including the ability to order reimbursement of any cleanup costs incurred by government, communities and individuals.

Sadik says that proposal adds very little power to the quasi-judicial tribunal. "You can always go to court if you've cleaned up someone else's mess," he notes.

The federal government also proposed that the NEB have the ability to give pipeline operators guidance on the best available technologies regarding materials usage, construction methods and emergency response techniques.

"That's nothing new or revolutionary," said Sadik.

The NEB can and does apply conditions to proposed pipelines. As an extreme example, the regulator required that Enbridge meet more than 200 conditions on its Northern Gateway project before proceeding. 

However, Metchooyeah, at the Dene Tha' First Nation, says he'd welcome the ability to force pipeline operators, particularly those with decades-old lines in the ground, to install more innovative technologies and improve the safety of existing lines.   

The fifth measure announced by the government was to provide the NEB with the authority and resources to assume control of the responses to spills or other incidents, in exceptional circumstances.

"Authority to direct response is one thing," said Ecojustice's Sadik. "Materials and infrastructure available for response in remote areas in an entirely different question."