Oil
Pipeline operators required to have $1bn to cover potential spills
TORONTO – Canada’s Conservative federal government will, in future, require existing and new pipeline companies to have at least $1-billion financial capability on hand to cover any spills on Canadian soil.
Natural Resources Minister Joe Oliver made the announcement in Vancouver on Wednesday, a week after he announced government would raise the absolute liability for energy companies operating offshore Atlantic Canada and Arctic Canada to C$1-billion to align accountability with international standards.
He also announced new safety rules for pipelines and new financial penalties which would soon come into force for individuals and companies that violate environmental laws.
Oliver added that government planned to enshrine the currently implicit “polluter pays” principle, in law.
“The measures announced today strengthen Canada’s already strong pipeline system even further. Our vast resource wealth is being developed responsibly, supporting Canada’s growth and generating revenue for critical social programmes,” he said.
Other measures announced by the Minister included requiring companies to appoint an accountable senior officer, whose duty would be to ensure that management systems and programmes were compliant, and to ensure companies’ emergency and environmental plans were transparent and easily available to the public.
The penalties to companies and individuals for a range of infractions would range from $25 000 to a maximum of $100 000.
Canada is desperately seeking alternative oil transport networks to its inadequate rail infrastructure, as the country aimed to more than double crude production to about 5.2-million barrels a day by 2030, much of which would come from the bountiful oil sands deposits in Alberta.
The recently elected Liberal government of British Columbia (BC), under the leadership of Premier Christy Clark, recently rejected the $5.5-billion Northern Gateway pipeline project on environmental concerns.
Energy giant Enbridge’s pipeline project, which entailed the construction of two pipelines stretching 1 177 km from the Alberta oil sands to a tanker port on the North Coast of BC, with the capacity to move 525 000 bbl/d of oil, was deemed to hold too great an oil-spillage risk, and its proponents presented too little evidence that risk factors would be mitigated, provincial Environment Minister Terry Lake said.
Environmentalists agreed. Canadian lobby group Environmental Defence climate and energy programme manager Adam Scott told Mining Weekly Online that the environmental risks of oil pipelines “by far” outweighed the potential economic benefits gained from developing a fossil fuel driven economy.
“Of all the recent high-profile oil spills, none are ever fully cleaned up, leaving the environment and the people living there worse off.
“By increasing contingencies or safety standards, government misses the point. The country is wasting the opportunity to invest in a green economy that would create even more jobs and would be sustainable for future generations,” he said.
“BC’s government is conducting its own review of pipeline safety and we are working with them. These federal measures being announced today are a major contribution to the combined efforts of both [provincial and federal] levels of government on this issue,” Oliver said.
Further, he also said he welcomed a report, entitled ‘Effects of Diluted Bitumen on Crude Oil Transmission Pipelines’, which had found that oil-sands-diluted bitumen was no more corrosive than other heavy crudes in transmission pipelines.
“We welcome the findings of the latest scientific report. This independent study by the internationally recognized National Academy of Sciences and sponsored by the US Transportation Department builds on extensive research conducted by Natural Resources Canada and others.
“The science is settled. The myth that oil sands crude is more corrosive has been consistently proven false by objective research. We hope all groups will base their comments on the facts. Pipelines are a safe and efficient method of transporting large volumes of crude oil and petroleum products,” Oliver noted.
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.
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