Enbridge to spend $172M in fines and safety upgrades

Enbridge Inc. will spend $172 million paying fines and boosting safety across its pipeline operations in a deal with the Justice Department resolving Clean Water Act violations connected to its 2010 oil spill near Marshall, Michigan.

The settlement agreement announced Wednesday resolves the biggest lingering legal question over the failure of Enbridge’s Line 6B, which sent more than 20,000 barrels of oil gushing into a Kalamazoo River tributary when it ruptured six years ago.

The incident became one of the largest inland spills in U.S. history and stoked concerns about the safety of pipelines moving heavy Canadian crude across the border.

Under the settlement, Enbridge agreed to pay $62 million for violating the Clean Water Act, the largest fine for a pipeline spill ever under that law.

The company also will spend at least $110 million taking steps to improve operations and prevent spills across its Lakehead pipeline system spanning 3,2000 kilometres near the Great Lakes.

Enbridge is required under the deal to replace nearly 480 kilometres of one of the pipelines.

“This settlement will make the delivery of our nation’s energy resources safer and more environmentally responsible,” assistant attorney general John C. Cruden said in a news release.

“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.”

It is the biggest Clean Water Act fine in a settlement except for the penalties levied in connection with the 2010 Deepwater Horizon disaster in the Gulf, according to the Justice Department.

Previously, the biggest Clean Water Act fine tied to a pipeline spill was a $34 million penalty levied against Colonial Pipeline Co. in 2003, according to the Environmental Protection Agency.

The penalties for Enbridge come on top of other spill-related costs, including $4 million in natural resource damages the company agreed to pay last year. The company has already paid $57.8 million to reimburse the government for cleanup costs tied to its Marshall spill, previously said it would pay $75 million to settle claims pursued by the state of Michigan and spent more than $800 million cleaning up the accident.

Enbridge’s 30-inch Line 6B runs through Michigan as it ferries oil between Sarnia, Ontario and Griffith, Indiana. At the time of the spill, it was carrying diluted bitumen from Canada.

According to a U.S. government complaint, the pipeline rupture — which it blamed on corrosion — triggered alarms in Enbridge’s control room, but the company failed to notice until at least 17 hours later.

Flooding pushed the discharged oil into flood plains and ultimately helped push it more than 55 kilometres downstream, with some of that heavy crude coating birds, muskrats and turtles.

The Kalamazoo River reopened for recreational activities after 22 months of cleanup work that Acting EPA Regional Administrator Robert Kaplan described as “arduous.”

Cleanup efforts were complicated because some of the heavy crude sunk.