Limited Liability Laws Mean BC Taxpayers Will Pay for Fracking's Environmental Contamination

As the Pembina Study titled 'How Albertans Could End Up Paying for Oil Sands Mine Reclamation' shows, "Limits on liability protect potential polluters at the expense of the environment and taxpayers. They are bad for the environment because they reduce incentives to improve safety practices, making accidents more likely. They are bad for taxpayers because, should an accident occur, they provide inadequate compensation for damages, leaving taxpayers (or uncompensated victims) holding the bag."

Corporations, and their government stooges, argue that without protection from the liability created by unpredictable catastrophic black swan type effects , no one will develop, participate in, or invest in risky projects or industries. These concerns, however, fail to fully account for the harmful consequences of limits, including that they encourage risky behaviour, and that they subsidize harmful activities at the expense of taxpayers and victims of pollution, contradicting the polluter pays principle and rights-based approaches to these problems. Environmental lawyer Dianne Saxe has written that “One of the biggest ways that our legal system contributes to enormous, high-risk accidents is to allow those responsible to limit their financial liability. Liability limits remove a massive financial incentive to take precautionary measures and avoid risk-taking, decreasing the level of care."

As Pembina's report shows Albertan's could end up being on the hook for between $100-$150 billion dollars just in reclamation costs that the Environmental Protection Security Fund can't cover let alone the unknown significant environmental impacts,including emissions of greenhouse gases another pollutants, surface water withdrawals, contamination and disruption of groundwater, toxic seepage from tailings lakes into groundwater, habitat fragmentation and impacts on wildlife that 50 years of operations will create.

This isn't a new issue, governments have long been warned about this as well as having direst experiences. For instance there's Sydney’s Tar Ponds on the eastern coast of Cape Breton Island, Nova Scotia where one hundred years of steel and coke production left more than a million tonnes of contaminated soil and sediment which has cost Canadian taxpayers over $4billion so far. And the Faro Mine in the Yukon Territory where 25 years worth of zinc and lead extraction has led to over $450 million in environmental liabilities. Then there's the Giant Mine outside Yellowknife where 50 years of gold mining has created an estimated $400 million in environmental liabilities. In each of these cases the corporations didn't even pay the first $40million they just, after first paying themselves and their shareholders profits and bonuses, just declared bankruptcy and walked away which is why Alberta setup the Environmental Protection Security Fund, as underfunded as it is, to begin with.

Before the corporations invested in Alberta's Tar Sands or BC's LNG nightmare, they had their accountants do the math. They invested their capital based on the fact that limited liability meant limited costs for buying insurance and thereby increased profits. So if governments try to change the rules now those corporation's lawyers would just sue. If they tried to change the rules for new operations or expanded existing operations the newcomers would sue because of the uneven playing field created.

Consider the case of Jessica Ernst who's lawsuit asks for $33 million Canadian in damages to her land along Rosebud River in Alberta. Her suit claims gas drillers ruined groundwater, violating her rights. Her water well, originally drilled in 1986, showed no methane at the time. New test results showed high levels of methane, a hydrocarbon called F2 and two other chemicals. As a result, Ernst has sued Encana, Alberta Environment and Water, and the Alberta Energy Resources Conservation Board.

Enbridge and the governments have tried to 'delay and exhaust' Ernst but have failed. Ernst owns one ranch, how many others in fracking country are waiting to see the results? Many would be a good guess. How many others will experience contamination of their water as time goes on and the toxic chemicals being blasted under the sub-surface water they have legal rights to percolate upwards and laterally through the smashed shale? Many more would be a good bet. With a limited liability cap of $40million it's easy to see that BC's taxpayers are in jeopardy.

Imagine now how much jeopardy Alberta and BC taxpayers could face if a huge unpredictable catastrophe struck like the BP disaster in the Gulf a couple of years ago who's cleanup is now expected to eventually cost $50billion. Imagine how much it would cost to cleanup the MacKenzie River or delta where half the year 2 lbs mosquitoes patrol, the other half it's covered in ice and 2000lb polar bears reign.

As Donald Rumsfeld once famously said, "There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know." Those guys, the unknown unknowns, are the reason for liability insurance, yet Canada and most other countries refuse to acknowledge them and instead of requiring real insurance put their citizens in jeopardy.