Pipeline Safety Act Moving Through Canadian Parliament

March 21, 2015 § Leave a comment

Coined the Polluter-Pays enactment, Bill C-46 would amend the statutory liability regime for federally regulated pipelines in Canada. The bill imposes unlimited liability of pipeline operators if an unintended or uncontrolled release of oil, gas or any other commodity from a pipeline that they operate arising from their fault or negligence, and requires financial assurance for the life of assets including post abandonment. The bill:

establishes the limit of strict liability (without proof of fault or negligence) at no less than one billion dollars for companies that operate pipelines that have the capacity to transport at least 250,000 barrels of oil per day and at an amount prescribed by regulation for companies that operate any other pipelines;
requires that companies that operate pipelines maintain the financial resources necessary to pay the amount of the limit of liability that applies to them;
authorizes the National Energy Board (NEB) to order any operator of a pipeline with an unintended or uncontrolled release of oil, gas or any other commodity occurs to reimburse any government institution the costs it incurred in taking any action or measure in relation to that release;
requires that operators remain responsible for their abandoned pipelines;
authorizes the NEB to order operators to maintain funds to pay for the abandonment of their pipelines or for their abandoned pipelines;
allows the Governor in Council to authorize the NEB to take, in certain circumstances, any action or measure that the NEB considers necessary in relation to an unintended or uncontrolled release of oil, gas or any other commodity from a pipeline;
allows the Governor in Council to establish, in certain circumstances, a pipeline claims tribunal whose purpose is to examine and adjudicate the claims for compensation for compensable damage caused by an unintended or uncontrolled release of oil, gas or any other commodity from a pipeline;
authorizes, in certain circumstances, that funds may be paid out of the Consolidated Revenue Fund to pay the costs of taking the actions or measures that the NEB considers necessary in relation to an unintended or uncontrolled release of oil, gas or any other commodity from a pipeline, to pay the costs related to establishing a pipeline claims tribunal and to pay any amount of compensation that such a tribunal awards; and
authorizes the NEB to recover those funds from the company that operates the pipeline from which the release occurred and from companies that operate pipelines that transport a commodity of the same class as the one that was released.

As of March 9, 2015, Bill C-46 was referred to the Standing Committee on Natural Resources. For more details, read the full bill text.

Tagged: Canada, Legislation

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