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Nova Scotia Wants Offshore Drilling Liability Raised to C$1B

One week after introducing legislation to continue a moratorium on high-volume hydraulic fracturing (HVHF), Nova Scotia’s provincial leaders announced plans to amend rules for offshore drilling, including raising the liability for operators to C$1 billion from C$30 million.

On Tuesday, Energy Minister Andrew Younger introduced amendments to the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act. The ministry said the amendments were designed to "strengthen offshore environmental liability protections and improve transparency and clarity of operations."

Nova Scotia's amendments are identical to proposed changes in federal law. The Canadian government in Ottawa has been working with Nova Scotia and the province of Newfoundland and Labrador to regulate offshore development along the Atlantic coast.

"We are very optimistic about our offshore opportunities," Younger said. "As Nova Scotia's offshore industry continues to grow, we must have the best laws and regulations in place to protect our environment while we develop our resources. We already have one of the strongest offshore safety and environmental protection regimes in the world, and we're working with our federal partners to enhance our world-class standards."

Under the proposed amendments, liability for fault from an accident or spill would remain unlimited. However, absolute liability, which would apply in all situations, even if the operator was not at fault, would increase from C$30 million to C$1 billion per operator.

The amendments also call for raising the financial capacity requirements for drilling, production and development to at least C$1 billion; empowering the Canada-Nova Scotia Offshore Petroleum Board to conduct environmental assessments under the Canadian Environmental Assessment Act, and levying penalties against operators; and making emergency response and environmental plans available to the public.

Nova Scotia enacted the current moratorium on fracking in April 2012. Last month, the province's Liberal government followed through on a campaign promise to continue the moratorium indefinitely (see Shale DailySept. 30Sept. 4April 23, 2012). HVHF would still be allowed for testing and research purposes.

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