Natural Resources Canada cuts "cash on hand" pipeline spill fund in half
Natural Resources Canada (NRCan) has reduced the funds required in case of a pipeline spill from 10% of the company's liability to 5%.
The Pipeline Safety Act originally had no minimum "cash on hand" requirement for spills. However, the federal government amended the act earlier this year, requiring a 10% emergency fund. After a series of consultations, the government announced that number will be cut in half to 5%.
Large companies have a clean-up liability limit of $1 billion, which translates into a $50 million emergency fund. Although the cash requirements are not a big deal for large companies such as TransCanada or Enbridge, smaller operators are now required to keep an estimated $200-$300 million of cash on hand, which might be a challenge.
Anti-pipeline groups have already denounced the new plan, calling 5% insufficient. NRCan maintains the 5% clean-up fund is in addition to a number of other new safeguards and regulations recently put in place.