Toronto city staff want the federal Natural Resources Minister to immediately implement his own department’s proposed pipeline regulations, which would include requiring companies like Enbridge to have at least $1 billion in financial capacity to cover disaster costs.
It’s another approach the city is undertaking after the National Energy Board failed earlier this month to include Toronto’s request for the $1 billion insurance plan in the 30 conditions it outlined after allowing Enbridge to boost capacity on its Line 9 pipeline.
The pipeline, which passes through north Toronto and other GTA communities on its route from Sarnia to Montreal, will be allowed to carry 300,000 barrels of oil a day, up from 240,000, and reverse its flow from westbound to eastward, should it meet the NEB conditions.
A report from Toronto’s city manager and city solicitor headed to council next week seeks council’s approval to write to newly appointed Natural Resources Minister Greg Rickford requesting immediate implementation of the federal rules proposed last year, which have yet to be enshrined in legislation.
Rickford did not comment directly on whether he would approve Toronto’s request, saying, “our government already announced that it will require companies operating major pipelines to have a minimum financial capacity of $1 billion.”
One report submitted as evidence at the NEB hearings on Line 9 suggested that a bad spill could cost $1 billion, but a “worst-case scenario” price could be as high as $10 billion.
The majority of the NEB’s three-member panel found that Enbridge, currently insured up to $685 million, has the financial capability to deal with such incidents. The company has repeatedly said that it could access other resources in case of a disaster.
In an email to the Star, spokesman Graham White highlighted that Enbridge paid the full $1.1 billion cost of cleaning up the 2010 Kalamazoo River spill in Michigan. In that incident, 3.3 million litres of oil poured into the river, making it the costliest onshore spill in U.S. history.
“So it has already been demonstrated that the company is able to financially respond to and resource even the extraordinarily rare incidents of this size,” wrote White.
He said Enbridge would withhold comment on the city manager’s report because it has not reviewed it, and does not normally provide statements on proposed legislation.
“Certainly we would comply with any federal regulation as a responsible operator whose first priority is the safety of the vital service we provide.”
Line 9 passes straight through Councillor Anthony Perruzza’s York West ward. He said he fully supports staff’s recommendation.
“It should be a requirement, because (the oil companies) also need to understand that this is serious business and, should something happen, we need to make sure that we’re able to deal with it,” he said.
Concerns over oil spill cleanup costs gained national attention following the Lac-Mégantic disaster last July, when a train carrying crude oil derailed in the tiny Quebec town, killing 47 people. The train’s owner, Montreal, Maine & Atlantic Railway, was unable to cover cleanup costs, estimated at $200 million, and filed for bankruptcy protection.
Adam Scott, climate and energy program manager at advocacy group Environmental Defence, said it is “unsettling” that Toronto’s $1-billion demand was denied by the NEB, and that the city must now appeal directly to the minister. He said he was not very optimistic that Rickford would grant the request.
“(The oil companies) are profiting from the pipeline,” he said. “They should be paying the full cost of liability, and the public should have assurances that they’re capable of handling that.”