Canada panel urges better response plan for oil spills

VANCOUVER Tue Dec 3, 2013 5:22pm EST

VANCOUVER Dec 3 (Reuters) - Canada must be better prepared to respond to major oil spills if more crude starts to flow in pipelines to the country's Pacific Coast, a government panel said on Tuesday, as fears of a major marine disaster grow.

The report by the federal transport department makes 45 recommendations, including ensuring companies are prepared for a worst-case scenario and new guarantees that taxpayers will not be liable for costs related to spills in Canadian waters.

Regulators are currently weighing separate proposals from Enbridge and Kinder Morgan to build new pipelines to carry oil from Alberta to the British Columbia coast, which could bring an additional 600 tankers to the region each year.

Under current rules, the polluter is required to pay for the entire cost of a clean-up and there are funds set aside to compensate those affected by pollution damage from a maritime accident, though there is a cap on damages per incident.

The report recommended that the cap be abolished and also said that an emergency account, funded by industry, should be created to pay when Canada's Coast Guard is called in to lead a clean-up mission.

"Canadian taxpayers should not bear any liability for spills in Canadian waters," said the report, the first major review of Canada's spill response plan in nearly 20 years.

It also urged more flexibility in response techniques and recommended that spill response be managed on a regional basis, ensuring that procedures are tailor-made for various different geographies and environments.

Canada is the world's sixth-largest producer of crude oil, the vast majority of which is exported to the United States.

But congestion on existing pipelines means that crude is getting bottlenecked in landlocked Alberta, spurring the Alberta and federal governments to push for a new pipeline to the West Coast to open up export markets in Asia.

Those efforts have been fiercely opposed by First Nations aboriginal peoples and environmentalists, who say a spill near water or in the ocean would be devastating.

"The government will take all necessary actions to prevent oil spills, clean them up should they happen, and ensure polluters pay," Transport Minister Lisa Raitt in statement.

The report, the first major review of Canada's spill response plan in nearly 20 years, was critical of existing response time standards, suggesting that timely response is the key to mitigating the risks of a spill.

"In our view, the current response-time planning standards will not ensure the best possible outcomes in some spill scenarios," the report said.

The current rules were put in place after the Exxon Valdez disaster in 1989, when an oil tanker struck a reef in Alaska, releasing 44,000 tonnes of oil into Prince William Sound. They have not been fully reviewed in nearly 20 years.

A second phase of the review will look at requirements for hazardous and noxious substances, including liquefied natural gas, as well as response to Arctic spills.