https://www.mlive.com/news/2020/07/state-dnr-presses-enbridge-for-written-agreement-that-it-will-cover-costs-of-spills-from-line-5-pipeline.html
[This is how you close down an old pipeline: make the operator, fully,
legally and credibly liable for the damages caused when it leaks. The
oil industry is an old hand at making vague commitments to clean up its
messes, and then failing to do so when the bill comes due. E.g., Prince
William Sound has never been properly cleaned up or remediated since the
Exxon Valdez grounding, and those injured by the spill mostly died
before seeing a cents on the dollar settlement. When you ask for a
legally binding version of that commitment, the oil industry will always
balk. Witness the emerging story on the Trans Mountain Expansion
pipeline project as insurers are backing away when they recognize the
real financial risk of having to pay for a leak in it.
links in online article]
State DNR presses Enbridge for written agreement that it will cover
costs of spills from Line 5 pipeline
2020.07.22
By Cheyna Roth | croth@xxxxxxxxx
LANSING -- Michigan wants assurance that Canadian pipeline giant
Enbridge will cover the financial cost of an oil spill in the Straits of
Mackinac—and it wants it in writing this time.
Enbridge owns the controversial Line 5 pipeline that carries crude oil
and natural gas liquids under the Straits of Mackinac. Last week the DNR
called on Enbridge to promise that it would and could cover all
financial liability if there was a spill or damage to the pipeline. The
DNR said Wednesday that it isn’t satisfied with the response letter
Enbridge sent on Monday.
“If Enbridge Inc. is really committed to providing financial assurance
to the people of Michigan, they’ll enter into a written agreement to
that effect,” said DNR Director, Dan Eichinger in a statement.
“We will continue working around the clock to get these pipelines that
transport crude oil out of the Great Lakes as soon as possible,” he
said. “While we continue this work, Enbridge Inc. must provide full
financial assurance to the people of Michigan that the company will meet
its obligations in the event there is a spill or some other disastrous
damage to the Great Lakes.”
Essentially, they want an agreement that will hold up in court.
Enbridge gave a similar statement on the matter to what it sent out last
week when asked about the agreement. Spokesman Ryan Duffy said in an
email that the company plans to take full responsibility for any
clean-up resulting from an incident in Michigan or anywhere else along
the pipeline.
“Since we already have an agreement with the State of Michigan to
provide these assurances, if the State would like to sit down and
discuss our financial assurances, we would be happy to do so and we made
that offer in our response to Director Eichinger,” Duffy said.
But the state maintains that this isn’t adequate. They’re concerned that
parent company Enbridge Inc. would not be obligated to cover spill costs
for subsidiary Enbridge Energy Company Inc. And that Enbridge Energy
wouldn’t be able to pay the bill if it comes due.
DNR spokesman, Edward Golder said in an email that the state wants what
Enbridge has never given them: “a binding, written agreement that
Enbridge Inc., the Canada-based parent company for the corporation, and
not one of its subsidiaries, takes full financial responsibility for a
potential oil release from Line 5.”
The state wants the following, in writing, from the parent company,
Enbridge Inc.:
Enbridge Inc., the parent company, agrees to assume the indemnity
obligations of Enbridge Energy Company, Inc.
Enbridge Inc. agrees to a minimum of $900 million in liability
insurance.
Enbridge Inc. names the State of Michigan as an additional insured
party on the identified policies so that Michigan’s right of recovery is
not derivative.
Enbridge Inc. will directly pledge its own assets for the remainder
of the financial assurance requirements (to meet or exceed $1.878
billion, annually adjusted for inflation).
“I’m shocked at Enbridge Inc.‘s refusal so far to sign a written
agreement promising to cover the costs of an oil spill in the Great
Lakes if this unthinkable event were to happen,” said Gov. Gretchen
Whitmer in a statement.
“When I was a kid, my parents taught me: ‘You break it, you pay for it.’
It seems that’s the bare minimum Enbridge Inc. owes every Michigander so
long as the company continues to pump crude oil through the Straits of
Mackinac,” she said.
Whether the 67-year-old line should remain in the water is the subject
of an ongoing lawsuit between the state and Enbridge.
In 2018, Enbridge made a deal with then Governor Rick Snyder to build a
$500 million utility tunnel under the bedrock of the straits that would
house a new portion of the pipeline. But current Governor Gretchen
Whitmer and Attorney General Dana Nessel have been fighting the plan in
court.
On June 25, an Ingham County Circuit Court judge granted the state
Attorney General’s Office request that the twin pipelines be shutdown.
This was after a support was damaged earlier in the month.
The pipeline, which traverses the bottomlands of the Great Lakes before
cutting through the Lower Peninsula to Canada near Port Huron, is made
up of an east and west “leg.” .
In July, Judge James Jamo allowed the line to partially reopen. The west
leg can operate, but the east leg remains shutdown until the Pipeline
and Hazardous Materials Safety Administration, a federal agency that
regulates and monitors oil pipeline operators, grants reopening.
“Enbridge’s Line 5 is a 645-mile, 30-inch diameter pipeline that travels
through Michigan’s Upper and Lower Peninsulas—originating in Superior,
Wisconsin, and terminating in Sarnia, Ontario, Canada,” the Enbridge
website says. “Line 5 supplies 65% of propane demand in Michigan’s Upper
Peninsula, and 55% of Michigan’s statewide propane needs.”
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