Liability For Drilling And Production Source Oil Pollution In The Canadian Offshore

Reviews and examines Canada's Oil and Gas Production and Conservation Act, Arctic Waters Pollution Prevention Act and the Fisheries Act which have been exacted to regulate the rights of claimants and defendents involved in oil spills. Analysis reveals potential loop holes in Acts for self-serving arguments from both parties in liability assessments, in the event of an oil spill.

The 2010 Deepwater Horizon (DH) incident produced the largest oil spill that has occurred in U.S. waters, releasing more than 200 million gallons into the Gulf of Mexico. BP has estimated the combined oil spill costs will be approx. $41 billion. The DH oil spill raised many issues for policymakers, incl. the ability of the existing oil spill liability and compensation framework to respond to a catastrophic spill. Contents of this report: (1) Intro.; (2) Existing Liability and Compensation Framework: Responsible Party; Liability Limits; Financial Responsibility; The Oil Spill Liability Trust Fund; Compensation or Claims Process; (3) Issues for Policymakers: Liability Limits; Per-Incident Cap; Level of Funding; Claims Process. This is a print on demand report.

This book deals with Canada's oceans management policies since the conclusion of the 1982 Convention of the Law of the Sea. That Convention set out a jurisdictional framework for the management of the world's oceans, but it did not provide states with precise guidance on all the issues that can arise. As a state with one of the world's longest coastlines, Canada was one of the principal beneficiaries under the 1982 Convention regime. A study of Canadian policy is particularly significant, as Canadian oceans management places in relief many of the difficult questions yet to be resolved.

A recent series of major oil pollution incidents has generated serious concern about the adequacy of Canada's oil pollution liability regimes. In Canada, distinct liability regimes govern different aspects of hydrocarbon resource development. This article assesses the statutory civil liability regime governing the exploration and production of offshore oil and gas resources. The existence of an adequate offshore liability regime is an issue of importance to all Canadians. Appropriate allocation of risks will ensure that taxpayers are protected from the financial consequences of a spill, which may amount to tens of billions of dollars in the offshore context. Appropriate allocation will also promote improved industry safety practices, thus reducing the likelihood of pollution incidents. This article assesses the strengths and weaknesses of the various legislative components that combine to form the overarching “patchwork” civil liability regime for oil and gas activities in the Canadian offshore. It concludes that the existing liability regime fails to adequately implement the polluter-pays principle and provides a wholly inadequate measure of protection to Canadians and the Crown against offshore-related environmental liabilities. At the same time, the existing regime fails to promote an appropriate industry safety culture, creating a moral hazard that increases the risk of a worst-case scenario oil pollution incident.The article proposes legislative reforms to correct these flaws, including, among others, the elimination of or a substantial increase to the existing cap on an operator's absolute liability, and the explicit recognition of the availability of compensation for natural resource damages. These reforms are necessary to establish a modern liability regime that provides Canadians and the environment with an appropriate level of protection in the event of an offshore pollution incident.

Proceedings of a seminar held in Boston, Massachusetts, May 1-3, 1985, organized by the Section on Energy and Natural Resources Law, International Bar Association.