http://www.canadianenergylawblog.com/2014/05/28/federal-government-announces-new-measures-to-strengthen-regulations-for-pipeline-safety/
Federal Government Announces New Measures to Strengthen Regulations for
Pipeline Safety
By Beverly Ma on May 28th, 2014
On May 14, 2014, the federal Minister of Natural Resources, Minister of
Transport, and Minister for the Federal Economic Development Initiative
for Northern Ontario announced new measures designed to strengthen
Canada’s pipeline safety system. These new measures reinforce the
polluter pays principle and give the National Energy Board (“NEB”)
greater regulatory control over Canada’s pipeline system, and include
the following:
Introducing absolute liability for all NEB-regulated pipelines,
meaning that companies will be liable for costs and damages irrespective
of fault, and companies continue to have unlimited liability when at
fault or negligence;
Developing a strategy with industry and Aboriginal communities to
increase Aboriginal peoples’ participation in pipeline safety
operations, including planning, monitoring, incident response, and
related employment and business opportunities;
Providing the NEB with authority to order reimbursement of any
cleanup costs incurred by governments, communities, or individuals;
Giving the NEB the ability to provide guidance on the use of the
best available technologies used in federally-regulated pipeline
projects, including materials, construction methods, and emergency
response techniques; and
Providing the NEB with authority and resources to assume control of
incident response if a company is unable or unwilling to do so.
In July 2013, the federal government had also instituted administrative
monetary penalties for individuals and companies that violate the
National Energy Board Act. The penalties are up to $25,000 for
individuals and $100,000 for corporations for each day of non-compliance
with federal safety requirements.
Interestingly, these federal pipeline measures appear to be aimed at
satisfying some of the five requirements set by British Columbia (“BC”)
in 2012 for approving oil pipeline projects. One of BC’s requirements is
that new pipelines must meet “world-leading” standards for both marine
and land oil-spill response and prevention. One of the implications of
the federal initiatives is that, once implemented, companies would be
required to use the best available technology for project construction
and spill cleanup.
Pursuant to the federal plan for Responsible Resource Development, the
NEB has increased annual inspections of oil and gas pipelines by 50
percent, and doubled the number of comprehensive audits to improve
pipeline safety across Canada. The federal government reports that
between 2008 and 2011, 99. 999 percent of oil and petroleum products
transported on federally regulated pipelines were carried out safely. On
these pipelines, the rate of spillage in Canada was 57 percent lower
than in Europe and 60 percent lower than in the United States over the
past decade.
Together with the recently announced new rail safety and tanker safety
regulations, these regulatory changes represent efforts by the
Government of Canada to strengthen the overall regime for safely
transporting oil, petroleum, and natural gas products, as well as
enhancing Aboriginal engagement. We will continue to monitor this sector
and will continue to update our blog as further events unfold.
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