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Oil Spills Reach $177M Resolution

Monday, July 25, 2016

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Nearly six years after what is described as the costliest inland oil spill to occur in the United States, the energy company responsible for the affected pipeline has agreed to pay $177 million to settle claims related to that and one other spill, and take steps to prevent future spills.

The U.S. Environmental Protection Agency (EPA) and the Department of Justice jointly announced the settlement with Enbridge Energy Limited Partnership and several related Enbridge companies to resolve claims stemming from the 2010 oil spills in Michigan and Illinois.

The rupture in Michigan was attributed to stress corrosion cracking that went untreated, as well as a series of control room errors.

NTSB pipeline photo
NTSB

National Transportation Safety Board photos show the six-foot, five-inch rupture of the Enbridge Energy pipeline segment. Although alarms sounded within seconds of the rupture, the company allegedly did not respond for about 17 hours, regulators said.

Enbridge has agreed to spend at least $110 million on measures to prevent spills and improve operations across nearly 2,000 miles of its pipeline system in the Great Lakes region, the federal agencies reported.

The Calgary-based company will also pay civil penalties totaling $62 million for Clean Water Act violations: $61 million for the discharge in Marshall, MI, and $1 million for the discharge in Romeoville, IL.

“This settlement will make the delivery of our nation’s energy resources safer and more environmentally responsible,” said John C. Cruden, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.

“It requires Enbridge to take robust measures to improve the maintenance and monitoring of its Lakehead pipeline system, protecting lakes, rivers, land and communities across the upper Midwest, as well as pay a significant penalty."

"From the beginning, we've taken responsibility for the Line 6B release. We accept the civil penalties and enhanced safety measures in the decree,” Enbridge Energy Partners President Mark Maki said in the company’s statement.

“The enhanced safety measures included in the decree are consistent with our approach to safety and integrity and our current practices and have largely been implemented over the past six years.

"In fulfilling the terms of the agreement, we will cooperate with the U.S. Department of Justice and the U.S. Environmental Protection Agency," he added.

Spill History

On July 25, 2010, the Marshall pipeline rupture discharged at least 843,444 gallons of oil from Enbridge’s Line 6B pipeline, sending oil into the Kalamazoo River as well as a nearby creek and shorelines, according to the EPA.

As reported earlier by PaintSquare News, the pipeline failed despite a series of In-Line Inspections (ILl) that Enbridge performed on the 30-inch-diameter segment as part of its Integrity Management Program (IMP), according to a Notice of Probable Violation (NOPV) issued by the Pipeline and Hazardous Materials Safety Administration in July 2012.

“Multiple corrosion and crack-like anomalies on the pipe joint that failed on July 25, 2010, had been reported from the previous ILl runs, but Enbridge did not conduct any field examination of the reported anomalies prior to [the] Accident,” the NOPV said.

Crack detection ILl was even being performed on the line on the day that it ruptured, and the tool actually remained in place until the line was restarted two months later, PHMSA said.

Nevertheless, according to the notice, “Enbridge could not demonstrate that the company attempted or scheduled any remediation of the corrosion or crack anomalies that were identified by the assessments.”

In addition to the stress corrosion cracking, pump station personnel were blamed for misinterpreting leak alarms and restarting the pipeline without confirming whether there was a failure. Staff was accused of extending the length of time the spill continued—as much as 17 hours, reports said—and as a result, the amount of oil discharged.

The PHMSA levied a $3.7 million fine against Enbridge for the violations cited in its notice.

A later National Transportation Safety Board investigation further determined that Enbridge knew of and allegedly ignored multiple corrosion-fatigue cracks in the pipeline five years before the line ruptured. (PaintSquare News reported on the findings at the time; however, the document is no longer available on the NTSB site.)

“[For] five years, they did nothing to address the corrosion or cracking at the rupture site—and the problem festered,” Deborah A.P. Hersman, chairwoman of the NTSB, said at the time.

Ultimately, the spill was caused largely by Enbridge’s lack of maintenance and inadequate response and by ineffective federal oversight—all avoidable factors, she added.

Fewer than three months later, the second pipeline included in the settlement experienced a failure, the EPA said.

Marshall cleanup
Enbridge

Prior to the $177 million settlement, Enbridge reported that it had already spent $57.8 million on cleanup costs from the Marshall spill.

On September 9, 2010, at least 269,934 gallons of oil discharged from Enbridge’s Line 6A pipeline near Romeoville, dispersing oil into an unnamed tributary to the Des Plaines River and flowing through a drainage ditch into a retention pond.

Enbridge alleged that the spill occurred after a third-party water pipe in the right of way failed, damaging the Enbridge pipeline.

Prevention and Improvement Measures

In addition to payments required under the proposed settlement, the federal agencies indicated Enbridge has already reimbursed the government for $57.8 million in cleanup costs from the Marshall spill and $650,000 for cleanup costs from the Romeoville spill.

Moreover, the company reportedly incurred costs in excess of $1 billion for required cleanup activities relating to the Marshall and Romeoville spills.

Under the settlement, Enbridge is committing to a number of preventive and improvement measures.

“This agreement puts in place advanced leak detection and monitoring requirements to make sure a disaster like this one doesn’t happen again," explained Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance.

"This comprehensive program—including an independent third party to audit compliance—will protect our waterways and the people who depend on them."

Enbridge estimates the following commitments will cost at least $110 million:

  • Implement an enhanced pipeline inspection and spill prevention program;
  • Implement enhanced measures to improve leak detection and control room operations;
  • Commit to additional leak detection and spill prevention requirements for a portion of Enbridge’s Line 5 that crosses the Straits of Mackinac in Michigan;
  • Create and maintain an integrated database for its Lakehead Pipeline System;
  • Enhance its emergency spill response preparedness programs by conducting four emergency spill response exercises to test and practice Enbridge’s response to a major inland oil spill;
  • Improve training and coordination with state and local emergency responders by requiring incident command system training for employees, provide training to local responders, participate in area response planning and organize response exercises; and
  • Hire an independent third party to assist with review of implementation of the requirements in the settlement agreement.

There will be a 30-day public comment period open on the settlement posted July 20. Information on how to comment on the consent decree will be available in the Federal Register and on the Department of Justice’s website. The agreement will take effect following the comment period and upon approval by the U.S. District Court for the Western District of Michigan.

   

Tagged categories: Accidents; Asia Pacific; Clean Water Act; Corrosion; EMEA (Europe, Middle East and Africa); Environmental Protection Agency (EPA); Government; Health and safety; Latin America; North America; PHMSA; Pipeline; Quality Control; Violations

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