Enbridge Energy is talking about offering concessions to Dane County officials who want the oil pipeline giant to buy extra insurance in case of a spill like the one in Michigan that took four years and $1.2 billion to clean up.
Lawyers for Enbridge told a county representative Thursday about two possible options, said Patrick Miles, a County Board member who is chairman of the zoning committee that has been holding up the company’s plans to triple the flow of tar sands crude through a Wisconsin line.
Publicly, the Calgary-based pipeline giant has insisted the county can’t demand extra spill insurance even though Enbridge-owned pipelines in Washington state supply such coverage for at least three municipalities.
But with a zoning committee vote looming on Tuesday, company lawyers met with county assistant corporation counsel David Gault and “floated” two ideas, Miles said. He declined to disclose specifics.
“They posed some ideas and raised some more answers to questions that they thought we might have, and they have to go back and talk to their insurer and attorneys and managers to see what kind of flexibility they have,” Miles said. “Obviously it’s not soup yet.”
Miles said he expected a specific proposal at the committee meeting.
“I’m keeping an open mind,” Miles said. “I still have a number of questions that I want to ask. I am intrigued at maybe the idea of additional insurance for Dane County in the event of some kind of accident.”
Enbridge officials couldn’t be reached for comment.
Enbridge is the largest importer of heavy crude from western Canada. Adding pumping stations to its Line 61 through Wisconsin would increase the flow of the tar sands petroleum to 1.2 million barrels per day on average, far more than the much-higher profile proposal for the Keystone XL pipeline route hundreds of miles west.
The Enbridge plan has garnered less attention because it simply increases the flow on an existing route. By adding pump stations last year, the company in August boosted the flow through Line 61 from 400,000 barrels to 560,000.
Opponents say spills of tar sands are more hazardous than lighter oils because they can sink in water, making them much more difficult to clean up. Also, spills release volatile toxic gases from a diluting agent that is added to make the thick material flow.
Line 61 opponents want additional cleanup insurance as a condition of a county permit Enbridge is seeking for one of the 13 pumping stations it needs to build to increase the flow from Superior to the Illinois border.
Enbridge has said that its $700 million in system-wide insurance is sufficient, along with state and federal cleanup funds, even though the 2010 spill near Marshall, Michigan, cost more.
“We just don’t see a lot of value in insuring for another Marshall,” Enbridge president Mark Maki said in a Nov. 3 earnings call.
Miles said he didn’t know how much was enough.
“How do we determine what our exposure is?” Miles said. “What expertise do we need to have in risk management or consulting with somebody in the insurance industry?”
Vote delayed many times
The committee has postponed voting on the Enbridge permit several times. If the committee approves a permit with an insurance requirement Tuesday, it could determine the coverage amount after further study, Miles said.
Like other committee members, Jerry Bollig declined to say whether he leaned toward approval but said he would be shocked to see a permit without required spill insurance because pipelines continue to rupture — it’s just a matter or when and where.
“What I’m waiting for is how much is being recommended by the experts,” Bollig said. “If it sounds too low, there’s going to be an increase.”
The $1.2 billion cleanup of Michigan’s Kalamazoo River — a record for an inland spill — is on everyone’s minds, said committee member Mary Kolar.
“I have told the Enbridge representatives ‘There’s one word you have to address, and it’s Kalamazoo,’ ” Kolar said. “’You as a corporation have to ensure us that you won’t have a Kalamazoo in our county.’”
Miles said the permit had a better chance of passing the five-member committee if the company wasn’t threatening a costly court fight over an insurance requirement. The meeting agenda says the panel expects to go into closed session Tuesday to discuss potential litigation.
Committee members have been under intense pressure from the company, county residents and others who have appeared at public meetings and sent emails. The email traffic picked up last week after an online opinion piece appeared in The New York Times.
“We are getting bombarded from all over the country,” committee member Bob Salov said.
Money and safety
Miles emphasized that Gault listened to Enbridge attorneys Thursday but didn’t negotiate.
Enbridge has maintained that the federal law forbids local pipeline safety regulation. Miles and others have expressed concerns about a costly court battle. But attorneys from the Environmental Law & Policy Center provided the county with a Jan. 9 opinion indicating it was unlikely a court would block a cleanup requirement.
“Financial requirements are not safety requirements,” the center said. “Such (cleanup) requirements are economic requirements, and well-justified ones in light of Enbridge’s track record of costly spills in the Midwest.”
Miles said he shares environmentalists’ concerns about high energy consumption and impact on climate change associated with extraction of tar sands crude, but the county doesn’t have authority to deny the permit based on those considerations — or based on worries that the pipeline can’t handle an increase in flow. But he said the county can act to protect residents’ welfare after a spill.
“That is an area where we do have some latitude in terms of what we can do in the interest of the public,” Miles said.
Kirkland, Washington, enacted an ordinance in 2011 requiring the Enbridge-owned Olympic line to purchase $100 million in general liability insurance and $50 million for pollution liability. The law is modeled on one enacted in Bellingham in 2001, two years after a 16-inch gasoline pipeline broke, spilling 237,000 gallons, which ignited, killing three teenagers and causing $45 million in property damage.