Healthy Oceans. Healthy Communities.

Canadian taxpayers on the hook for catastrophic oil spills from Enbridge Northern Gateway

January 13, 2011

SOINTULA, B.C.— 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. Currently, there are no tankers carrying crude oil through the waters of British Columbia’s North Coast

“Enbridge won’t have to pay one dime to clean up a spill caused by an oil tanker loaded with crude from their pipeline,” says Jennifer Lash of Living Oceans Society. “Liability for oil pollution from a tanker lies strictly with the ship’s owner and their limit of liability ends at $140 million.”

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.

“Our commercial fishing, shellfish aquaculture, and tourism industries that employ thousands people on the coast could be severely damaged, and Canadian taxpayers would be left to clean up the mess while Enbridge watches from the shoreline,” says Lash “A better economic plan for this part of Canada is a ban on oil tankers which would allow our coastal economy to thrive and reduce the financial risk to taxpayers.

Enbridge says that Northern Gateway will contribute $2.6 billion in tax revenue over its 30 year lifespan – a figure unlikely to cover the cost of even one major oil spill. An audit released on December 7, 2010 by the Commissioner of the Environment and Sustainable Development found that the Canadian government and Coast Guard are unprepared to deal effectively with a catastrophic oil spill. Living Oceans Society’s analysis suggests that even if adequate measures were in place, in a spill equivalent to the Exxon Valdez, Canadian taxpayers could have to cover upwards of 67 percent of the clean up and compensation costs.

(summary of the report Who pays for oil spills in Canadian waters?)

(map of proposed oil tanker prohibition zone)


Contact Information

Jennifer Lash, Living Oceans Society 250-741-4006