Ecojustice Blog – Climate change Posted on September 16, 2011 (updated: September 16, 2011)

Oil companies should pay full cost of Arctic oil spill

When a 2010 blowout on an offshore drilling rig killed 11 men and spilled 4.9 million barrels of crude oil into the Gulf of Mexico, Canada’s National Energy Board took note.

The NEB established the Arctic offshore drilling review (Sept. 10-16) in Inuvik, NWT, to learn how to prevent and lessen the impact of future oil spills from offshore drilling in the Arctic. Ecojustice lawyer Will Amos, representing WWF-Canada, is participating in the review and hopes it will result in increased protections for the Arctic environment.

“Given how limited any spill response would be, these results must be factored into NEB decision making processes, regarding where and when drilling may occur in Canada’s Arctic,” Amos said.

The issue of who pays for an oil spill was a topic Tuesday at the National Energy Board’s Arctic offshore drilling review in Inuvik, Northwest Territories.

After Tuesday’s session, the Globe and Mail reported that several companies clamouring to drill in the Arctic said they’ll pay the full costs of an oil spill.

A representative for Imperial Oil pointed to an existing agreement that sets out the requirements for a company responsible for a spill and said “if we can afford to drill in this environment, then we should have the financial strength to fund any cleanup.”

Unfortunately, the agreement that outlines who would pay for an Arctic offshore spill has an escape hatch. An oil company could find itself liable for a mere $40-million and, in some cases, even less. After the Deepwater Horizon Rig spill, British Petroleum estimated its costs at $40-billion.

Guess who pays for costs that exceed the $40-million cap? The government, which means taxpayers. That means you and me. Current rules about offshore oil spills leave governments, taxpayers, communities and the environment vulnerable. There needs to be clarity about what is and is not covered by current agreements.

Ecojustice is arguing that the existing $40-million liability cap is not enough. All environmental damages must be paid by the company responsible for the spill.

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