A Diluted Bitumen Spill in British Columbia
Scenario:
A tanker carrying barrels of diluted bitumen from the Kinder Morgan Trans-Mountain Pipeline spills in the Burrard Inlet, leading to an on water oil spill.
Where the Burrard Inlet is
MAIN ACTORS
Kinder Morgan
Kinder Morgan Canada currently operates several pipeline systems and terminals, such as the Cochin Pipeline, the Puget Sound Pipeline and the Trans Mountain Pipeline. In the event of a land spill or a spill from one of the terminals, Kinder Morgan would be held liable.
BC Tankers
Tankers such as the Eser K, located off of Kinder Morgan Westridge Marine Terminal in Burnaby BC, would be liable up to $1.36 billion if their tanker spills in the Burrard Inlet. [6]
Governments
Canadian Federal Government -
Specifically in the event of an oil spill, the Federal Government would be in charge of regulating the clean up. This is stated under the Canada Oil and Gas Operations Act(COGOGA). The National Energy Board has been given broad powers to interpret the terms of the COGOGA, and deal with insurance, and liability costs.
Indigenous Groups
Indigenous groups are concerned about the possibility of a pipeline burst and/or oil spill from a tanker. Currently, the Tsleil-Waututh are the most active and vocal with regards to the pipeline. Specifically, they are worried about a diluted bitumen spill in the Abbotsford Aquifer, the Coldwater Valley Watershed and the Coldwater Aquifer, as the pipeline is designed to go directly above these water sources. While they recognize that Kinder Morgan is required to provide them with bottled water in the case of a spill, they insist that this is a band aid solution.
Current Policy & Issues
Currently, Kinder Morgan Canada has three emergency response plans in case of a tanker or pipeline spill: one for Terminals and Tanks Farms, one for the Westridge Marine Terminal, and one for the Trans Mountain Pipeline. These plans are detailed and include sections on spill/site assessment, spill containment and recovery, protection of sensitive areas.
Thus far, the Canadian government and Kinder Morgan Canada have ignored issues of liability in the case of a spill. While Kinder Morgan Canada does have an emergency response plan ready, Kinder Morgan has pledged to do no more than comply with Canadian federal laws. This stipulates that the operators of a major oil pipeline in Canada must have a minimum of $1 billion in financial resources. But in Canada persons who cause oil spills are generally only liable to damages caused to third parties without proof of fault or negligence, subject to limits established by applicable regulations. This is because of the principle of limited strict liability. These limits are relatively low at $30 million. [7] The issue with the Burrard Inlet is that if a tanker spills in water, the vessel owners are the responsible party. With the help of the International Oil Pollution Compensation Funds and Canada’s Ship-Source oil Pollution Fund, the vessel owner would be expected to muster a maximum of $1.36 billion for a single spill, according to Kinder Morgan. [8] Even if liability were split between the two parties, it would be nowhere near the cleanup cost. For the sake of comparison, the Exxon Valdez oil disaster surpassed $10 billion in cleanup costs. [9]
Policy Proposals
If an oil spill occurs in the Burrard Inlet, Kinder Morgan should not be able to claim no liability. Currently all of the liability would be on the vessel owner, who would not be able to pay for the entire cleanup. In the absence of blatant negligence from the vessel owner, Kinder Morgan should also be required to contribute substantially to the cleanup costs. Under Canadian federal law, operators of a major oil pipeline must have at least $1 billion in assets. Kinder Morgan is currently valued at $72.44 billion so they have the resources to contribute substantially in the event of a disaster. [10] Under the Canada Oil and Gas Operations Act, the Chief Conservation Officer in the National Energy Board can step in during times of crisis to take necessary action. This can involve bringing in other parties to do work that is not being done by the polluter, with the costs borne by the polluter. [11] Thus, we propose that the Chief Conservation Officer assess how the spill occurred or determine liability/responsibility for the spill, and if it is deemed that there was not blatant negligence from the vessel operator, they take $1.36 billion from the vessel operator, and force Kinder Morgan to pay the balance of clean up costs either through their own operations or by way of a third party.
Since the pipeline and tankers will be carrying diluted bitumen, oil spill response plans should be strengthened in order to minimize damage in the case of an accident. We propose a two step approach to ensure this.
1.Preparedness -
The transported crude oils should be identified using industry-standard names so there is no uncertainty of what type of oil is spilled. Additionally, areas that are most sensitive to the effects of a diluted bitumen spill should be identified, including bodies of water.
2. Research -
A scientific panel should be created to conduct research towards developing new technology to better combat a diluted bitumen spill. Kinder Morgan should be required to help fund this, as well as the Canadian federal government. This research will ideally lead to findings on the toxicity of diluted bitumen, as well as how to clean up the substance once it has been spilt. This step is crucial to minimizing damages after an oil spill. Without further research we cannot hope to be able to clean-up a diluted bitumen spill effectively.
The provincial government should work with nearby communities to ensure that steps are in place to minimize damages and ensure the continuation of everyday services. This is of great concern specifically in areas in British Columbia where 127,000 jobs rely on the tourism industry, which is five times the number of jobs in the oil and gas sector, and 54,500 jobs rely on the agrifood and seafood industry. [12] Consequently, in the case of an oil spill, during the clean-up cities and towns that are tourist hot spots should be given priority and cleaned up first in order to minimize the economic hardships the province as well as the individual person would face.
Kinder Morgan’s current emergency response plans contain no proposals to aid Indigenous groups affected by an oil spill. At the moment, in the case of an oil spill that contaminates drinking water, Kinder Morgan is only responsible to “provide one or more alternate source(s) of drinking water for all persons who use water for human or animal consumption from the contaminated water source for the period of time during which contamination exists.” This puts Indigenous groups in serious danger in the case of an oil spill.Aside from being given clean drinking water, there are no plans to aid them in finding new food sources or housing that might have also been affected by the spill.
In the past, Indigenous communities have been ignored in the case of an oil spill. For example, in 2016 a pipeline in Saskatchewan released approximately 250,000 litres of crude oil and other toxins into the North Saskatchewan River. [13] A report concluded that not only were there no efforts by Husky Energy Inc. to test the water near the James Smith Cree Nation, but in fact Husky Energy Inc. did not even know if the spill had reached the First Nations community.
This incident shows that the Canadian government cannot hope to rely on independent companies to respond to the spill adequately and that the Canadian government itself needs to be more actively involved in this process. Specifically, the Canadian government needs to ensure that it tests Indigenous drinking and/or fishing waters for toxins, and that it has plans in place to provide Indigenous communities with clean drinking water and food if necessary, and maybe provide long term recovery support. Additionally, the Canadian government should have plans in place to help clean affected areas in order to return the environment back to normal, if possible.