by Bruce Walker
The head of Michigan’s Department of Natural Resources has asked Enbridge to sign an agreement to cover all losses that might ensue should the company’s dual Line 5 pipeline fail in the Straits of Mackinac.
DNR Director Dan Eichinger sent a letter Friday to Enbridge Executive Vice President and President, Liquid Pipelines Veron Yu seeking a written agreement “to provide sufficient financial assurances to cover any loss, including a catastrophic release from the dual pipelines.”
Eichinger wrote: “As recent events have reminded us, we must get these pipelines that transport crude oil out of the Great Lakes as soon as possible,” said Eichinger. “In the meantime, Enbridge 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.”
According to a DNR press release, an Oct. 29, 2019, report by the American Risk Management Resources Network determined Enbridge currently is not indemnified under the original 1953 easement for the Line 5 pipelines.
Therefore, the DNR is seeking Enbridge agree to:
- Assume the indemnity obligations of Enbridge Energy Company, Inc.;
- Agree to a minimum of $900 million in liability insurance;
- Agree to name the state of Michigan as an additional insured party on the identified policies so that Michigan’s right of recovery is not derivative; and
- Agree to directly pledge its own assets for the remainder of the financial assurance requirements (to meet or exceed $1.878 billion, annually adjusted for inflation).
In a statement, Bryan Newland, board member of the Chippewa Ottawa Resource Authority and chair of the Bay Mills Indian Community, stated: “The Chippewa Ottawa Resource Authority … applauds the Michigan Department of Natural Resources’ request for a new agreement that will hold Enbridge liable for all damages and losses due to a potential oil spill.
“This is a step toward exposing the company’s inability to protect Michiganders in the event of an oil spill from its Line 5 under the Straits of Mackinac,” Newland added. “CORA continues to urge Enbridge to end use of Line 5 and reroute the oil going to Canadian refineries through other pipelines that do not endanger the Great Lakes.”
Michael Barnes, Enbridge spokesperson, shared his company’s official statement with The Center Square.
“Enbridge pledges to take full responsibility for the clean-up of any incident in Michigan or anywhere along our pipeline system,” according to the Enbridge statement. “The company’s strong financial position and follow through on our commitment to Marshall, Michigan support this pledge,” the statement reads, referring to a 2010 incident wherein an Enbridge pipeline leaked nearly 1 million gallons of oil into a tributary of the Kalamazoo River in Calhoun County.
The company spent five years and $1.21 billion, according to the Grand Rapids Press, to clean up the spill. It also paid an estimated $180 million in fines.
“As part of our existing agreements with the State of Michigan, Enbridge provided the State with detailed financial assurances that we have the ability to cover all costs in the unlikely event of an incident in the Straits,” the statement continues. “Enbridge provided an update on our financial assurances to the State in October 2019 per the second agreement.”
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Bruce Walker is a regional editor at The Center Square. He previously worked as editor at the Mackinac Center for Public Policy’s MichiganScience magazine and The Heartland Institute’s InfoTech & Telecom News.
Photo “Enbridge Pipeline” by Lawrence Welsh.