‘NO MEANINGFUL COVERAGE’
Minnesota officials: Enbridge lacks insurance for pipeline spills
Minnesota officials have concluded Enbridge Inc. lacks sufficient insurance to cover oil spills for a pipeline proposed in northern Minnesota and 14 miles of northwestern Wisconsin — a development that once again raises questions about the company’s insurance coverage in the event of an accident.
The Minnesota Department of Commerce determined twice last month, including on Friday, that the Canadian company lacked adequate liability insurance to cover potential spills from the planned pipeline.
Enbridge spokeswoman Jennifer Smith said in a statement that regardless
of coverage, the company “is responsible for clean-up in the unlikely event of a release anywhere along our pipeline system.
“It is the substantial financial strength of this company, combined with our duty to respond and remedy any incident that may occur, that
will ensure communities along our system have the protection they need.”
Enbridge is proposing to build a pipeline — known as Line 3 — to carry oil from the tar sands region of
Canada to the western edge of Lake Superior, where the line would end in Superior.
The pipeline project has come under fire from environmental groups and Indian tribes in Minnesota and Wisconsin because of its potential to harm public waterways and other areas along the route.
In Wisconsin, a separate concern is that added capacity from Line 3 could lay the groundwork for Enbridge to build a new pipeline on existing right-of-way running from Superior to the Illinois state line.
Enbridge says it raised the possibility of an expansion in Wisconsin from Superior to Pontiac, Ill., in 2014. But, according to the company’s website, “we have consistently communicated to our landowners, stakeholders and the media since then that the company does not have a project.”
Insurance coverage for spills has also been an issue in Wisconsin.
In 2015, Dane County required Enbridge to buy $25 million in environmental insurance to cover potential pipeline accidents when the company was increasing capacity of its system, which passes through Dane County.
In July of 2015, the lawmakers on the Republican-controlled state budget committee, with little debate, voted to eliminate Dane County’s requirement. The matter is now under legal challenge.
Insurance issues have been amplified by Enbridge’s massive 2010 spill that polluted areas including the Kalamazoo River in Michigan. Enbridge spent $1.2 billion on clean-up costs. In July 2016, the company agreed to a $177 million settlement for spills in Michigan and Illinois.
Enbridge also operates a pipeline in the Straits of Mackinac, where Michigan officials have raised worries that fast-moving currents could damage the pipeline and cause a catastrophic spill.
To build Line 3, Enbridge needs approval from Minnesota and must meet certain conditions, including insurance coverage. (Wisconsin’s segment has been approved by state regulators.)
After reviewing confidential insurance coverage of the company, Kathleen C. Finnegan, general counsel of the Minnesota Department of Commerce, said in documents dated Friday that she “found no meaningful coverage for damages caused by oil spills” by Enbridge, and that the policies “appear designed not to cover most crude oil pipeline spills.”
Peter Anderson of 350 Madison, a group opposed to the pipeline, said the Kalamazoo River spill underscores the need for adequate insurance coverage from Enbridge. “It is unconscionable that Enbridge is pumping more than 37 million gallons of hazardous tar sands oil across Wisconsin each day, including part of Dane County, with imminent plans to add another 15 million gallons, without any cleanup insurance,” he said in a statement.
Enbridge’s Smith said that the company’s general liability insurance, which applies to all of its pipelines, has a limit of $940 million and should not be considered the primary way the company would pay for a clean-up.
“This commitment and the financial ability to respond has been demonstrated in the past, including with the clean-up and remediation of the spill in Marshall, Michigan,” she said, referring to the Kalamazoo spill.