Audit: Canada unprepared for offshore oil leaks2/5/2013
OTTAWA – Canadian taxpayers could be stuck with a massive environmental cleanup bill in the event of an offshore oil leak, says a new report.
Authorities are not fully prepared to handle a major spill, while liability limits for oil companies have not been raised in over two decades, according to new audits by the federal Commissioner of the Environment and Sustainable Development.
The absolute liability limit for offshore damages and costs in Canada is just $40 million. This compares to limits of $75 million in the United States and $250 million in the United Kingdom.
Norway and Greenland both have unlimited liability, while Norway also requires insurance of up to $1 billion.
‘The absolute liability limits have not changed in more than 24 years and are low compared with the limits in other countries,” reads the report.
In rare cases, the cost of environmental cleanups can stretch into billions of dollars.
The audit also found that the oversight bodies in Atlantic Canada, the Canada-Nova Scotia Offshore Petroleum Board the Canada-Newfoundland and Labrador Offshore Peteroleum Board, need to do more to prepare for a major spill.
Both local and federal authorities have plans to deal with a spill, but auditors found the plans “were inconsistent and did not always take each other into account. As a result, it was unclear who would perform some key roles during a major spill, and how.”
Agreements between the boards and federal departments were found to be “out of date or non-existent, or do not cover some important activities.”
Auditors also found unresolved jurisdictional issues that could hinder a timely response.
Risks of a spill are higher in Newfoundland, which has both natural gas and crude oil production.
In Nova Scotia, which currently has just natural gas production, the environmental risks were found to be relatively low while there is still safety risk tied to the possibility of a rig explosion.
The audit did not look at worker safety. Provincial auditor general Jacques Lapointe was going to tackle that area, but dropped the audit after saying energy companies ExxonMobil and Encana Corp. were refusing to release documents necessary for his audit.
(The Chronicle Herald)