WHO IS RESPONSIBLE FOR A LAND SPILL?

In the event of a spill from our pipeline along our right-of-way, Kinder Morgan Canada (KMC) would be considered the Responsible Party. We take responsibility for the cleanup and remediation of any land spill by responding immediately to any release from the pipeline system and taking on the cost of cleanup. The Pipeline Safety Act (the Act) requires federally regulated pipelines, such as Trans Mountain, to hold a minimum level of financial resources, set at one billion dollars for companies operating major oil pipelines, to cover liabilities related to an incident. Further, the Act requires a portion of each company’s financial resources to be readily accessible to ensure rapid response to any incident. Under the Act, the National Energy Board (NEB) has the authority to order any company that operates a pipeline from which an unintended or uncontrolled release of oil, gas or any other commodity occurs to reimburse any government institution the costs it incurred in taking any action or measure in relation to that release.

Our focus is on the safety of the public and minimizing impacts to people and the environment. KMC’s trained employees will work with pre-qualified and trained consultants and contractors to ensure any spill is cleaned up as quickly as possible. Each situation is unique; we will ensure parties affected are compensated appropriately and rather than applying a one-sized fits all approach will work directly with each affected party individually.

WHO IS RESPONSIBLE FOR THE CLEANUP AND REMEDIATION OF A MARINE SPILL?

In Canada, liability and compensation for ship-source oil spill pollution are governed by the Canada Shipping Act and the Marine Liability Act and is based on a  polluter pays principle. If oil is released from a vessel, regardless of the circumstances, the shipowner is always responsible for paying for an oil spill cleanup up to the ship's limits of liability. This includes third party losses and damage. 

Should a spill occur at the Westridge Marine Terminal, regardless of where the oil comes from, KMC would activate the required response resources and see that the response is undertaken in a diligent manner. The cost of the response would be allocated based upon the below:

  • Westridge Terminal-source spill: If oil were to be released directly from the Trans Mountain Westridge Marine Terminal, Kinder Morgan Canada (KMC) would be the Responsible Party. The potential volume and dispersal of a spill originating at the terminal is low because tanker loading is planned and handled carefully under close supervision of KMC operators, the KMC Loading Master and the vessel officers and staff. There is a relatively small amount of oil in the terminal piping at any given time and whenever a vessel is at the terminal the terminal and vessel are fully surrounded by a marine oil spill containment boom on the water side. KMC would cover the financial costs of cleaning up such a spill. 
  • Ship-source spill: If oil were released from a vessel, the vessel owner would be the Responsible Party and three different sources of compensation are available to cover damages from oil spills. Combined, these funding sources could provide up to $1.36 billion for a single oil spill. This includes the shipowners' liability, International Oil Pollution Compensation Funds, and Canada's Ship-Source Oil Pollution Fund

KMC has established Acceptance Standards for vessels calling at its Westridge Marine Terminal. Every vessel must undergo a vessel acceptance process that includes a pre-screening followed by a physical inspection by the KMC Loading Master before being allowed to undertake operations at the Westridge Terminal. KMC has the right to deny vessels that do not pass the acceptance process.

WHO PAYS FOR A SHIP-SOURCE OIL SPILL WHEN CLEANUP COSTS EXCEED THE SHIPPER’S LIABILITY COVERAGE?

In Canada, liability and compensation for ship-source oil spill pollution are governed by the Canada Shipping Act and the Marine Liability Act. Both Acts reflect Canada’s commitment to international conventions administered by the International Maritime Organization (IMO), such as those regarding the International Oil Pollution Compensation (IOPC) Funds.

The conventions limit the liability of the Responsible Party (ship owner) and establish sources of funding for clean up and compensation for damages. Approximately $1.3 billion is available for an individual spill. To learn more about liability and compensation for ship-source oil spills visit Transport Canada’s website here.

HOW ARE THE IOPC FUNDS FINANCED?

Each year, a levy is charged to each entity that has received more than 150,000 tonnes of contributing oil from IOPC member countries. The levy is calculated each year in order to cover approved claims (International Tanker Owners Pollution Federation Ltd, 2010).

Visit www.iopcfunds.org to learn more about the IOPC Funds.

WHAT IS CANADA’S SHIP-SOURCE OIL POLLUTION FUND?

The Canadian regime of liability and compensation for ship-source oil pollution consists of both national and international rules. The international rules originate in international conventions to which Canada has acceded. A key feature of the Canadian regime is the Ship-source Oil Pollution Fund (SOPF), which by far deals with claims that are purely domestic in origin and are consequently dealt with in accordance with the national rules.  Although most of those claims fall outside the scope of the international rules the SOPF covers the risk of non-payment by the responsible ship owner, as well situations where the responsible ship is unknown. 

Visit www.ssopfund.ca to learn more about Canada’s SOPF.