In a series of announcements, Natural Resources Minister Joe Oliver has announced that his government will introduce legislation in the fall to revise and revame the allocation of liability in three key sectors:  federally regulated pipelines, nuclear energy, and offshore oil and gas.

1.  Federally Regulated Pipelines

The changes will include the following:

  • pipeline operators will be expected to have a minimum financial capability to deal with spills of at least $1 billion
  • fines will be increased
  • pipeline operators will be required to appoint a senior officer to ensure that management systems and procedures are in compliance with laws
  • ensuring that pipeline operators remain responsible for abandoned pipelines
  • clarifying the right of the National Energy Board to conduct compliance audits

2.  Nuclear Energy

Under the existing (1976) Nuclear Liability Act, the liability of the operator of a nuclear plant is limited to $75 million.  Over a three year period, that cap on liability will be increased to $1 billion.  Operators will be be required to provide financial security for their potential liability and will be permitted to do so with insurance or other appropriate financial security.

3.  Offshore Oil and Gas

Offshore oil and gas operators liability is currently capped at $30 million for operations in the Atlantic Ocean and $40 million for operations in the Arctic Ocean.

Under the revised regime, offshore oil and gas operators would be subject to absolute liability (i.e. without proof of fault) of up to $1 billion.  Where the operator is at fault or negligent, the operator would be subject to unlimited liability.

Operators would be required to provide proof of financial capability to deal with potential liability of up to $1 billion.