Taxpayers Still on the Hook for Oil Spill on B.C. Coast, Despite Federal Claims of "Polluter Pays" Regime

oil tanker in the burrard inlet in vancouver british columbia

A new report reviewing Canada’s tanker spill prevention and response regime released by a government-appointed expert panel has reignited concerns over the impact increased tanker traffic and a potential oil spill could have on the British Columbia coast. 

The 66-page review of Canada’s oil-spill response system makes a total of 45 recommendations to government and industry, including annual spill training exercises, geographically based risk assessments, improved emergency response times and increased funding for Environment Canada, Transport Canada and the coast guard.

The panel also recommends the removal of a current $161 million liability cap — a change the federal government is describing as a move to a ‘polluter pay’ scenario.

Yet Karen Wristen, executive director of the Living Oceans Society, said the report’s recommendations do not hold industry accountable in the event of an oil spill:

“Under current regulations, the ship-source oil pollution fund, which is a fund presently containing about $400 million, only has to pay out $161 million per spill. What they’re saying is make the whole $400 million available for any one spill. It’s a lot of money but it’s nothing compared to the estimated loss from a spill along the Enbridge tanker route, which has been estimated to be about $10 billion. So to say this is unlimited liability and polluter pays is a bit rich,” she told DeSmog Canada. 

What is worse, Wristen said, is in the event the pollution fund is depleted, the recommendation is to borrow additional funds from Canadian taxpayers.

If we already know that the losses are going to be an order of magnitude higher, why not put a levy on industry now while they are going to be profitable, and get that money built up in the fund? This is the sort of made-for-industry approach that these recommendations take: we won’t bother about it unless it happens,” Wristen said.

Federal Natural Resources Minister Joe Oliver and Minister of Transport Lisa Raitt were in Vancouver to release the report.

“Marine shipping contributes importantly to Canadian economic growth, jobs and long-term prosperity,” Oliver stated in a government press release. “The tanker safety report commissioned by our government provides independent, objective recommendations that will support our goal of world-class maritime safety.”

But Wristen, who attended the announcement, challenges the claim this spill response regime puts the long-term interests of British Columbians first.

Canada’s plans for the West Coast don’t “deal with the fishermen and tour operators who might lose their livelihood,” Wristen said. “There’s nothing about loss of livelihood, loss of personal property, damages, that sort of thing…the costs of oil clean up alone in the last few major spills we’ve had to look at would have more than exhausted what’s available…There’d be nothing left over for the losses of ordinary Canadians.”

The federal government is hoping to establish what it called a “world-class tanker safety system” in an announcement in 2013. The national review is already being seen as an attempt to curry favour with British Columbians wary of increased oil tanker traffic on the coast.

Oil Spills a Concern for B.C. Government

In August, briefing notes from B.C. environment ministry bureaucrats revealed they were worried even a moderate oil spill would overwhelm the province’s ability to respond. Cuts in the 2012 federal budget led to the closure of Environment Canada’s regional spill response offices in Vancouver and other cities, further hindering efforts to contain an oil spill on the West Coast.

A study commissioned by the provincial government and released in October found only three to four per cent of a relatively small oil spill on B.C.’s north coast would be recovered within the first five days.

This finding was in line with B.C.’s final submission to the panel reviewing Enbridge’s Northern Gateway oil pipeline and tanker proposal, which cites an Enbridge witness as saying: “With respect to…most open ocean spills, no oil from a spill is recovered; the oil remains in the environment … there are significant periods of time [68.5% of the time during Fall/Winter in the “Open Water Area”] during which spill response will be impossible or severely constrained.”

In that final submission, the province says, “The goal is effective response [to oil spills].” What’s notable is the use of the phrase “effective response” versus “world class response.” In many cases, recovering 10 per cent of spilled oil is considered “successful” and thus could be coined “world class,” but not necessarily  “effective.”

Use of Dispersant Recommended by Panel

Given the unique risks posed by bitumen, the thick substance mined from the oilsands and destined for the Northern Gateway pipeline if approved, the terminology is especially important. In B.C.’s final submission to the panel, the province writes: “[Enbridge] acknowledges that it knows of no techniques to effectively remove dissolved oil from the water column. [Enbridge] acknowledges that the fraction of the total oil volume that sinks can exceed 50%,” and “recovery and mitigation options for sunken oils [e.g. weathered bitumen] are limited.”

The tanker safety panel also recommended dispersants and in situ oil burning are used in the event of an oil spill — recommendations Wristen finds more favourable to industry than spill-response workers and British Columbians living or working on the coast.

That’s another one that was a made-for-industry recommendation and it’s got really grave consequences for the environment and for people responding to the spill or anywhere near the spill. There are huge concerns with the human health impacts from the use of dispersants.”

Wristen points to an ongoing class action lawsuit against BP for its use of chemical oil dispersants in the Gulf of Mexico as evidence of the method’s drawbacks, including dangers to human and environmental health.

The dispersant, Wristen said, makes its way into the food chain and is acutely toxic to some organisms.

So we think this is a very, very poor idea. It’s popular with industry, though, because it’s actually cheaper to spray this stuff and say ‘all gone’ rather than actually work at cleaning it up. It prevents the oil from collecting on the beaches in a way that you can see it. So it’s there but you can’t see it.”

Taxpayers on the Hook

The panel’s report cost taxpayers $40 million and is one of three reports expected to cost a total of $120 million.

According to Wristen it will take hundreds of millions of dollars and “probably decades” to make these recommendations work. Effective spill response plans, integrated with local resources, could take years to set up, she said.

She added: “Both ministers Raitt and Oliver were at pains to say they were not committing to implementing anything that was in [the report]. They would take these recommendations back to their respective departments and presumably industry — they said ‘stakeholders’ — to see what would work. They’ll certainly be getting a very strong message from a number of quarters, I would think, that industry really does have to pay for this.”

There’s no indication, however, that the government plans on enforcing that, Wristen said.

The tanker safety panel is due to begin work on a second report in early 2014, reviewing national standards for ship-sourced spills of bitumen and liquefied natural gas — both proposed to be shipped from the British Columbian coast. This forthcoming report will also examine requirements for oil development including spill response in the Arctic.

In 2010, there were 71 oil tanker transits through Vancouver. Pipeline proposals by Enbridge and Kinder Morgan could bring 600 oil tankers to the B.C. coast each year.