The main reason why any B.C. provincial government should use all its powers to prevent any oil pipeline crossing the province and oil being exported by tanker, lies in a simple fact: the Canadian taxpayers are on the hook to clean up catastrophic oil spills if a tanker hits a rock in Canadian waters.
Canada is party to an international treaty, which caps the liability of tanker owners for oil spills at a level far below that which a major oil spill would reach:
If Enbridge’s Northern Gateway pipeline is approved, Canadian taxpayers could be on the hook for billions of dollars to cover the clean up and compensation costs in the event of a catastrophic oil tanker spill, claims Living Oceans Society in a report titled Financial Vulnerability Assessment: Who Would Pay for Oil Tanker Spills Associated with the Northern Gateway Pipeline written by the Environmental Law Clinic at the University of Victoria.
This report also 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.
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 through some of the most dangerous waters in the world. ..
Canada is a member of international oil spill funds that cover costs once the tanker owner reaches that $140 million limit. These 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.
While this may sound like a lot of money, it cost at least $3.5 billion USD to clean up after the Exxon Valdez spilled 257,000 barrels of oil. This is almost triple the funds available from the ship owner’s insurance and the international and domestic oil spill funds; it 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 are as high as $100 billion USD.
What has happened with the international treaty is that the oil companies have successfully persuaded governments to limit their downside (through the cap) while not allowing the taxpayers of those countries (who will pay the excess over the cap) any meaningful stake in the upside (the profits to be made from the oil).
This asymmetrical risk-reward equation is typical of the results which happen when international companies exert pressure on governments.
Let us hope that a B.C. government prevents any oil being shipped by tanker from B.C. until such time as adequate insurance (exceeding the miserly $1.3 billion cap that now applies) is provided to the provincial government.
If the federal government of Canada will not protect Canadian taxpayers, let a provincial government step up and do so.