Methods to enhance the predictability of petroleum offshore liability

• Major energy accidents show that the post-accident operators' payments far exceed the prescribed regulatory limits.
• Generic liability regime fails to provide guidance following a major energy accident.
• The paper proposes three principles to improve the predictability of post-accident regulatory response.
• The application of principles reinforces the negligence liability part, which is the primary source of unpredictability.
• Recommendations increase chances that energy firms undertake projects with positive value on a full cost basis.

Two major accidents in the energy sector – the Macondo well blowout in the U.S. coastal waters in 2010 and a series of equipment failures at the Fukushima I Nuclear Power Plant in Japan in 2011 – proved that the existing liability regimes are incapable to assign systematically the responsibility for accidental pollution damage and third parties' losses. The paper reviews the offshore spill data, petroleum liability regime that has developed in Canada over time and proposes three methods aimed at enhancing the post-accident regulatory predictability in petroleum offshore.