Pipelines May Be Exposed To Extended Liability

The Canadian Minister of Natural Resources recently announced that Canadian federally-regulated pipelines may soon be subject to strict liability for spills in an amount up to $1 billion (Canadian), and in cases of negligence there would be no statutory maximum to damages. The newly announced measures have not yet been formally introduced to the Canadian Parliament, but if they are adopted, the law is expected to go into effect by 2017.

The Minister's announced changes regarding the liability guidelines closely track another bill recently considered by the Canadian House of Commons. That bill, known as the Energy Safety and Security Act, concerns offshore oil and gas operations and would require that companies responsible for federally regulated offshore operations have access to at least C$1billion (approximately $922 million USD) for the cleanup of spills.