Mr. Speaker, I am pleased speak to Bill C-46, an act to amend the National Energy Board Act and the Canada Oil and Gas Operations Act, a much-needed and long-overdue first step toward a true polluter pays regime for pipelines in Canada. The NDP takes this very seriously. We view the phrase “polluter pays” as being one of the fundamental aspects of our approach to environmental legislation when we are government later on this year. I believe November would be when we would take over.
I am pleased to see there has been co-operation and some degree of collegiality on the natural resources committee on this subject. That is an encouraging sign in a Parliament that has not had much collegiality over the five years of the Conservative majority mandate. It is good to see.
Bill C-46 would open up a liability regime, which is sorely needed. There is none for existing pipelines and that is amazing when we think of the volume, number and lengths of pipelines throughout Canada, many of them crossing provincial boundaries, which would be regulated by the federal government. That is certainly the case for the pipelines that exit my riding, the Northwest Territories.
The bill includes absolute liability for all National Energy Board regulated pipelines, which are those that cross provincial boundaries. I assume that includes all connections to those pipelines. There are web-like networks of pipeline throughout any pipeline system. Oil is collected from different locations in order to fill up a pipeline that might have a capacity of many hundreds of thousands of barrels a day.
Companies would be liable for costs and damages irrespective of fault. This liability could go up to $1 billion for major oil pipelines, pipelines that have the capacity to transport at least 250,000 barrels of oil per day, and up to an amount prescribed by regulation for smaller companies. That is an important proviso because many of the pipelines are not the size of 250,000 barrels a day. They come from smaller fields in isolated locations. I will speak to that in a bit.
Companies would continue to have unlimited liability when they were at fault or negligent. Accidental leakages, I guess, would mean that pipeline companies are not at fault or negligent, but what does “negligence” mean toward the maintenance and repair of existing pipelines? What does it mean with regard to engineering? If the engineering is inappropriate for the laying of a pipeline, is that considered fault or negligence upon the pipeline company? Some real decision will have to be made by government about what negligence or fault is part of the system, especially for smaller pipelines where perhaps there is less intensity in the environmental process when it comes to putting the pipelines in place.
Bill C-46 leaves considerable leeway for politically motivated decisions and backroom arrangements between operators and the National Energy Board. That is what we are talking about: how do we determine the responsibilities under this act? This also applies to many of the amendments to numerous environmental acts in recent budget implementation bills. We have changed the system considerably over the time of the Conservatives, mostly to weaken legislation that deals with environmental issues.
We have had several pipeline spills in recent history in my riding in the Northwest Territories. Those have come from an industry, mostly located in the Norman Wells area, that has been in place for a considerable length of time. That industry has been in the Northwest Territories since the early 1930s. We have seen that develop over time. We have a pipeline that has a capacity for 45,000 barrels a day that exits the Zama Lake in northern Alberta.
In early May of 2011, a hunter discovered oil leaking from the Enbridge Normal Wells pipeline near the Willowlake River about 50 kilometres south of the community of Wrigley. Enbridge estimated as much as 1,500 barrels of oil leaked from the pipeline. Of course the people in Wrigley were concerned about the impacts of that on the environment and on human health, as well as on the health of the animals and wildlife, which they sincerely use to a great extent for food. This was not a simple matter. It ended up resulting in many thousands of truckloads of material being hauled to the Swan Hills disposal site at a great cost. When we we talk about pipelines and 1,500 barrels people wonder what that is. However, when we have to deal with the dirt, the conditions and perform a complete cleanup, it gets very expensive. A lot of money was put into the cleanup that 1,500 barrels.
That is not the only incidence of spills we have had. The community of Norman Wells, where Imperial Oil has a refinery, ranks as the community with the most reported incidents of federally regulated pipelines in the country. Between 2006 and 2012, the National Energy Board recorded more than 70 incidents, including anything from spills and leaks to worker injuries and fires.
We are talking about pipelines that are not new and perhaps not built to the changing conditions of the northern climate. In that area near Norman Wells, scientists have reported losses of up to 40% of the permafrost over the period of a decade. Therefore, we have serious issues with changing conditions. With respect to the pipelines that were built before, the engineering was based on different circumstances. Those types of things lead to problems.
In 2012, the National Energy Board ordered Imperial Oil to come up with a comprehensive plan to deal with 77 buried pipelines at risk of failing.
Therefore, we do have some issues with pipelines in northern conditions. I cannot speak to all of the pipeline issues across the country. There is no question that many aging pipelines are used for the product around Canada. How many of them are provincially controlled and how many are federally controlled I am sure is of concern to everyone.
These 77 buried pipelines, some of which stretch for several kilometres, were installed during a boom in the oilfield expansion in the 1980s. A particular defect in engineering and construction allowed water to get between the pipe insulation and the bare steel leading to corrosion. Therefore, we have pipelines that are suspect and will likely cause problems in the future. As the corrosion gets worse the pipelines, under stress from changing soil conditions, may actually rupture. Corrosion can also cause pinhole leaks that without proper monitoring equipment on these pipelines can release a lot of oil before anybody even realizes what is going on.
Imperial Oil first identified the problem in 2011, after discovering oil seeping to the surface on Bear Island from one of its well sites in the middle of the Mackenzie River. We had leakage in one of our major pristine rivers in the north. Of course there is concern about that. Over the next year and a half, the company found a total of six leaks. Cleanup involved the excavation of thousands of cubic metres of contaminated soil. That soil had to be moved a very long distance in order to deal with it.
In 2004, a curious black bear caused an oil spill near Fort Simpson. About 12,000 litres of oil leaked out after the animal accidentally opened a valve at an Enbridge pipeline site. Is there culpability in that type of leak? Is somebody responsible for ensuring that pipeline valves are protected from the ability of black bears to manipulate them? Of course. The pipeline company's responsibility is to build pipelines that are safe and can live up to any kind of expectation. If a black bear could release a valve, so could people. We had a problem with the type of thing.
These NWT leaks are small in comparison to the roughly 28,000 barrels of crude oil spilled from a plains midstream Canada pipeline near Little Buffalo, Alberta in May 2011, or the massive 9.5 million litre leak near Zama, Alberta in June 2013 from Apache Canada's pipeline. That leak contaminated 42 hectares of boreal forest in northern Alberta.
We need stronger legislation and a stronger approach to pipeline issues in Canada. We cannot simply say that we have the very best, because the very best might have been that way 30 or 40 years ago when the pipeline was first put in place, but these things do not last forever. We can see that in the oil industry throughout the world. Pipeline degradation leads to leaks.
Whether the amount of oil is big or small, the damage to the environment is considerable, and we have to recognize that. Costs will be encountered. This legislation has loopholes within it that do not define precisely what polluters must pay. That it where our concerns are. We are still happy that we are getting something in place, but it is not the full thing I think we would look for from important legislation like this because of the nature and age of the industry in Canada, the need to fully monitor pipelines in an effective fashion so when leaks occur, they are caught as soon as they possibly can be. We are all concerned about those things.
In February 2013, an Enbridge excavation crew encountered contaminated soil in the immediate vicinity of Enbridge Line 21, which is the main Norman Wells pipeline, in two locations. The location in the first dig was kilometre post 457 on a line approximately 60 kilometres west of Fort Simpson. The second was at kilometre post 391. These two small leaks contaminated 100 cubic metres of soil.
As pipelines age, these sorts of issues start to become more and more, so it is very important that industry, dealing with aging equipment, provides the best possible care and attention to that equipment to ensure these leaks are found early and dealt with.
How does fault and negligence apply to existing operating systems for the pipelines that were approved many years ago by the National Energy Board? How do we ensure that the operating systems for these pipelines are brought up to a level that matches to the extent that the pipelines could have these problems?
While Bill C-46 makes some important improvements to Canada's pipeline liability regime, it does not unequivocally require polluters to pay. This undermines improvements and leaves uncertainty whether taxpayers will still be on the hook, in many cases for cleanup costs greater than the $1 billion where negligence or fault cannot be proved.
Basically, what we are saying here is that the very small problems are going to be covered. Larger problems, with this whole question of fault and negligence, are going to be at the discretion, I would assume, of the National Energy Board to come up with decisions. Just imagine the pressure and the lobbying efforts that could be made by various senators and other people for pipeline companies in this regime. As well as the National Energy Board being involved in these decisions, I understand the cabinet is or can be involved as well.
Ensuring that those who are responsible for making a mess clean it up is an important principle. We just went through an exercise with the nuclear industry, where we have limited their liability even after we have seen the complete disaster that took place at Fukushima, which cost exponentially more than what our limits are for the nuclear industry in Canada.
Why do we do this? It is because these industries simply cannot make the types of insurance arrangements for the kind of liability that they might incur. That is one of the problems we have in this industrial age, understanding how we can ensure that companies can carry the proper liability insurance or have the proper bond in place so that when things do go bad, the government is not left on the hook.
One of the greater examples of this is the Yellowknife Giant Mine where 237,000 tons of arsenic is going to be stored underground by the government in perpetuity at costs well in excess of $1 billion.
Things happen in many industries that we need to be very careful about, on prevention, ensuring that regulation and oversight is robust, and that the environmental assessment process leading to projects is also robust, so that we can be assured that when we are planning for the development of new pipelines, care and attention is put to every detail. I think of the Mackenzie gas pipeline and its environmental assessment process that everyone complained took so long, so many years. There were still no answers about what was going on with the pipeline, for the changing and the nature of the permafrost in northern Canada. It still did not get to that, and all the questions were not answered.
Environmental assessment is very important. Unfortunately, the record of the government is weakening environment protections. What this means is that by failing to do a rigorous environmental assessment before a project starts, there is a greater likelihood of problems later on. That is the result.
In the Northwest Territories, first nations are in court fighting against the Conservatives' gutting of the environmental regulatory system contrary to their constitutionally protected land claims and self-government agreements. The first nations are not happy that in the Sahtu region, where the pipelines are in the Northwest Territories, they are losing their regional boards, which could give them significant input into decisions that are made about pipelines to ensure that they understand the process is working best for them. Yukon first nations are preparing for a similar court fight if Bill S-6 ever becomes law.
Progressive companies, on the other hand, have found that high environmental standards actually work to their benefit, if they are selling product in the world. We heard the premier-elect of Alberta talking about that last night, talking about the need to raise the standards of Alberta so that its products can be better accepted around the world. That job is important, to ensure that what we are doing in Canada meets every rigorous requirement. Through that process, we can achieve better results.