Enbridge reaches $177mn settlement on 2010 spills

OREANDA-NEWS. July 21, 2016. Enbridge reached a \\$177mn settlement with the US government to resolve claims related to 2010 crude pipeline spills in Michigan and Illinois.

Enbridge will spend at least \\$110mn on measures to prevent spills and improve operations on its system in the Great Lakes region which includes nearly 2,000 miles (3,219km) of pipe.

Enbridge will also pay \\$62mn in civil penalties for Clean Water Act violations -- \\$61mn for releasing at least 20,082 bl of crude in Marshall, Michigan, and \\$1mn for the spill of at least 6,427 bl of oil in Romeoville, Illinois, according to the Environmental Protection Agency and the Department of Justice who jointly announced the settlement.

Enbridge will also pay more than \\$5.4mn in unreimbursed costs incurred by the government in connection with cleanup of the Marshall spill.

In addition, Enbridge is required to replace about 300 miles of one of its pipelines. This replacement project is already underway and will cost an estimated \\$2.6bn, the company said. The new 292-mile segment between Neche, North Dakota, and Superior, Wisconsin, should be in service in early 2019.

The agreement "puts in place advanced leak detection and monitoring requirements to make sure a disaster like this one doesn't happen again," said assistant administrator for EPA's Office of Enforcement and Compliance Assurance Cynthia Giles.

The Marshall incident involved Enbridge's Line 6B which spilled crude into the Kalamazoo river in July 2010. The Romeoville leak was on Line 6A and occurred in September 2010.

Both lines 6B and 6A are part of Enbridge's Lakehead pipeline system.

The settlement includes specific requirements to prevent spills and enhance leak detection capabilities throughout the Lakehead system, which includes 14 pipelines in seven states.

Enbridge said many of the enhanced safety measures have already been implemented over the past six years, including a maintenance and inspection program with a total investment of nearly \\$5bn.

Following the Marshall spill, Enbridge has "significantly enhanced efforts to better understand the condition of its pipelines and mitigate risks, while increasing staffing dedicated to preventative measures, maintaining system fitness and leak detection and pipeline control," the company said.

Enbridge "made a commitment to the people of Michigan that we would clean up and restore the Kalamazoo river and surrounding areas, and cover the costs. We've done that. We've worked extremely hard to fulfil our commitments and make good on our promises. That accountability continues with today's announcement," said chief executive Al Monaco.

Federal regulators allege that the rupture and discharge on Line 6B were caused by stress corrosion cracking on the pipeline, control room misinterpretations and other problems, as well as pervasive organization failures at Enbridge.

Enbridge has previously reimbursed the government for \\$57.8mn in cleanup costs from the Marshall spill and \\$650,000 for cleanup costs from the Romeoville spill, and Enbridge reportedly incurred costs in excess of \\$1bn for required cleanup activities relating to the Marshall and Romeoville spills, federal regulators said.

There will be a 30-day public comment period on the settlement agreement.