Enbridge to pay $61M penalty for 2010 Michigan oil spill

Enbridge (ENB -1.4%) and Enbridge Energy Partners (EEP -1.7%) reach a $177M settlement with the U.S. Department of Justice and the EPA over 2010 oil spills in MI and IL, resolving the biggest legal question over the failure of ENB’s Line 6B, which spilled more than 20K barrels of oil into a Kalamazoo River tributary when it ruptured six years ago.

The company reached a $75 million settlement with MI in May 2015 that required Enbridge to restore wetlands, compensate the state for money spent on the cleanup and other measures.

It also resolves a second spill that same year in IL and commits the company to spend at least $110 million to prevent future spills and improve operations on its pipeline system that extends through seven USA states in the Great Lakes region. Enbridge is also being required to replace close to 300 miles of pipelines, after obtaining necessary approvals.

The agreement covers the Kalamazoo catastrophe, the worst inland oil spill in US history, and a smaller spill near Romeoville, IL, that took place two months, according to media reports, including The Detroit News and the Detroit Free Press.

“This settlement will make the delivery of our nation’s energy resources safer and more environmentally responsible”, said Assistant Attorney General John C. Cruden for the justice departments’ environment and natural resources division.

Enbridge has estimated cleanup costs of the spill to be about $1.2 billion, including more than $551 million on response personnel and equipment and $227 million on environmental consultants.

Enbridge has replaced the ruptured line, known as 6B, which begins in Griffith, Indiana, crosses southern MI and ends in Sarnia, Ontario. Even though the rupture triggered numerous alarms in Enbridge’s control room, the government claims Enbridge failed to recognize a pipeline had ruptured until at least 17 hours later. Company vice president Brad Shamla says Enbridge has been humbled and will meet the terms.

It comes almost six years to the day – July 25, 2010 – after a ruptured underground oil line near Marshall sent more than 800,000 gallons of crude oil into a creek connected to the Kalamazoo River.

Enbridge will also pay civil penalties totaling $62 million for Clean Water Act violations – $61 million for discharging at least 20,082 barrels of oil in Marshall and $1 million for discharging at least 6,427 barrels of oil in Romeoville.

The line rupture in Romeoville occurred in September 2010 and released 250,000 gallons of crude oil.

Directives for Line 5 include installation of pipeline supports, a pipeline movement study, quarterly inspections utilizing acoustic leak detection. The company has added control center staff and conducted almost 1,600 in-house exercises, drills and deployment simulations.

The settlement is subject to a 30-day public comment period, after which a judge will decide whether to accept it. The spill affected water quality, fish and wildlife.