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Enbridge reaches $177M settlement with US agencies over 2010 oil spills

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Essential Energy Insights - January 2021


Enbridge reaches $177M settlement with US agencies over 2010 oil spills

Enbridge Inc.and related companies agreed to pay $177 million in system upgrades, penaltiesand government costs related to two 2010 oil pipeline spills after reaching asettlement with the U.S. EPA and Department of Justice.

The company committed to spend $110 million to and make otherimprovements across almost 2,000 miles of pipelines in the , the EPA'sannouncement said.

Enbridge is expected to implement an in-line inspection planfocused on preventing pipe breaches, intensify spill-prevention measures inMichigan's Straits of Mackinac, improveleak detection and control room capabilities, and improve spill response andpreparedness, among other things.

These elements apply to the company's Lakehead System — anetwork of 14 pipelines in North Dakota, Minnesota, Wisconsin, Illinois,Indiana, Michigan andNew York — the EPA said.

EnbridgeEnergy Partners LP in 2014 replaced the entire 285-mile length ofLine 6B — the pipethat spilled an estimated 843,444 gallons of crude in Marshall, Mich., in July2010 — but the consent decree reached with the U.S. agencies also wouldprohibit the company from using the old version of the line.

The decree also directed Enbridge to replace anotherpipeline, Line 3. The company said in a July 20 news release that, pendingapprovals, a new version of the 292-mile U.S. portion of Line 3 will be inservice in early 2019. Enbridge also agreed to evaluate replacing a third pipe,Line 10.

Enbridge agreed to hire an independent party to help verifythat the company is complying with the consent decree and to submit semiannualstatus reports.

"This settlement will make the delivery of our nation'senergy resources safer and more environmentallyresponsible," said John Cruden, assistant attorney general forthe DOJ's Environment and Natural Resources Division. "It requiresEnbridge to take robust measures to improve the maintenance and monitoring ofits Lakehead pipeline system, protecting lakes, rivers, land and communitiesacross the upper Midwest, as well as pay a significant penalty."

Enbridge said it will shell out $62 million in civilpenalties under the Clean Water Act: $61 million for the Marshall spill and $1million for the September 2010269,934-gallon Romeoville, Ill.,release. The company would also be required to cover $5.4 millionin government costs associated with cleaning up the Marshall incident.

The company further agreed to enhance its coordination withthe government.

"The learnings from our experience have made us abetter company and the way we think about safety has changed," Al Monaco,Enbridge's president and CEO, said in a July 20 statement. "Over the pastsix years, we've intensified our focus on the safety and integrity of oursystems enterprise-wide and we've invested significantly in our people,processes, equipment and technology. Across Enbridge, our team is galvanized byour number one priority of safety and reliability of our systems and theprotection of the public and the environment."

There will be a 30-day public comment period on the consentdecree.