What happened when big corporation cut corners?

Enbridge oil leak in Kalamazoo River, July 2010

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The Enbridge oil leak in Kalamazoo River released 19,500 barrels of oil across 20 miles of land. Less than a day after Gov. Jennifer Granholm said she feared state officials had been “undersold” about the size of the spill, officials with Enbridge said during a news conference in Battle Creek on July 28 2010 and that the estimate remained at 19,500 barrels, or 819,000 gallons, of crude oil.

Other outside source at the Congressman Mark Schauer’s office said a much higher number. The Congressman said The Environmental Protection Agency had told him up to 1 million gallons of oil could have spilled in the water. Read more at www.lansingstatejournal.com, Enbridge: Michigan oil slick spans 20 miles; 19,500 barrels

The cause of the July 2010 spill is still under investigation, but unless it’s found to be totally unrelated to company procedures, it’s bound to complicate the debate about the company’s quest to open a twin pipeline from Alberta to B.C.’s mid coast.

Enbridge Controlled Oil Spill Burn

Enbridge Controlled Oil Spill Burn

This is not Enbridge first major spill, between 1999 and 2008 Enbridge recorded 610 spills that released 132,000 barrels of hydrocarbons into farms, wetlands and waterways on the continent. According to the Polaris Institute, this volume of crude “amounts to approximately half of the oil that spilled from the oil tanker the Exxon Valdez after it struck a rock in Prince William Sound, Alaska in 1988.” Source www.wikipedia.org.

Major U.S. crude oil pipelines, more than 55,000 miles of piplines in U.S.

More tan 55,000 miles of crude oil trunk lines in the U.S. connecting to regional markets.

Enbridge past oil spills

Enbridge oil spill record and other controversies

January
2001

Enbridge’s Energy Transportation North Pipeline leaked 3,800 cubic meters (23,900 barrels) of crude oil into a slough near Hardisty, Alberta. Nearly 74,000 tons of contaminated soil were collected and thermally treated at the terminal.
Enbridge’s Energy Transportation North Pipeline leaked

July
2002

A 34-inch-diameter steel pipeline owned and operated by Enbridge Pipelines, LLC ruptured in a marsh west of Cohasset, Minnesota. Approximately 6,000 barrels (252,000 gallons) of crude oil were released from the pipeline as a result of the rupture. The cost of the accident was reported to the Research and Special Programs Administration Office of Pipeline Safety to be approximately $5.6 million. No deaths or injuries resulted from the release. Enbridge apx. leaked 6,000 barrels of crude oil

June
2003

Enbridge spills around 19,000 gallons (452 barrels) in Wisconsin’s Nemadji River, and additional 715,000 liters of crude spilled from an Enbridge terminal is contained.

January
2003

A pipeline failure resulted in a spill of 4,500 barrels (715,000 liters) of oil at Enbridge’s oil terminal near Superior, Wisconsin. Approximately 500 barrels (72,00 litres) flowed into the Nemadji River, a tributary of Lake Superior. Company, authorities work to keep Enbridge oil spill out of Lake Michigan

April
2003

A gas explosion leveled an Etobicoke strip mall and killed seven people. It stands as the largest number of fatalities ever recorded in a pipeline incident in Canada. Enbridge Gas and a subcontractor, Precision Utility Ltd., were charged with failing to provide accurate information about the location of the natural gas pipelines. Enbridge Gas and Precision Utility Ltd., charged with failing to provide information about natural gas pipelines

April
2004

The Supreme Court found that the company had billed illegal late-payment penalties from 1994 to 2002, amounted to “criminal misconduct,” the Supreme Court of Canada has ruled. Seven justices of the court set a legal process in motion that could result in a large portion of $88 million in late-payment penalties being restored to customers of the utility. The fees had been approved by the Ontario Energy Board (OEB). Enbridge may refund millions late-payment charges too high

Critic says new Enbridge fee “outrageous”

VIDEO – Arthur

2005

Calgary-based Enbridge, Inc., a large North American pipeline operator, reported that it spilled 412,650 gallons (9,825 barrels) of oil in its operations during 2005.
Enbridge spilled 412,650 gallons (9,825 barrels)

2006

Enbridge has a goal of zero spills and leaks, but had 67 reportable spills in 2006 and 65 in 2007 (5,663 barrels and 13,777 barrels, respectively). Enbridge 67 reportable spills in 2006 and 65 in 2007

March
2006

An estimated 613 barrels of crude oil were released when a pump failed at Enbridge Pipelines (Saskatchewan) Inc.’s Willmar Terminal. Enbridge Inc. spills and releases

January
2007

A pipeline break near Stanley, North Dakota spilled 9,030 gallons of oil. Regulators fined Enbridge for exceeding pressure standards for the pipeline. Enbridge Dirty Dozen

January
2007

A spill on an Enbridge line that transports Canadian crude to Chicago, Illinois leaks around 50,000 gallons (1,190 barrels) of crude in rural Wisconsin. About a month later, and further north, the pipeline again spills around 125,000 gallons (2,976 barrels) after a construction crew breaks the line. Enbridge has history of US pipeline spills

February
2007

An oil pipeline spill on Feb. 2 2007, in Rusk County – one of the largest such accidents of its kind in state history – has been found to have contaminated the local water table. The spills took place during construction of a 320-mile pipeline by Enbridge Inc. of Calgary, Canada, alongside its existing pipeline from Superior to near Whitewater. Enbridge oil spill tainted water table

April
2007

Approximately 6,227 barrels of crude oil spilled in a field downstream of Liquids Pipelines’ pumping station at Glenavon, Saskatchewan. The line is a 34-inch, 490,000 barrel-per-day line transporting heavy and medium crude oil from Edmonton, Alberta, to Superior, Wisconsin. The oil was contained in a low area at the site, and initial clean up was completed within a few days in compliance with all government regulations. Enbridge Gas 2007 Corporate Social Responsibility Report

November
2007

A 34-inch pipeline carrying bitumen to U.S. Midwest markets exploded, killing two workers near Clearbrook, Minnesota. Among its findings, the regulatory agency found Enbridge failed to follow written procedures for couplings on the pipeline, didn’t make the repairs in a safe manner and didn’t make sure workers had adequate training for that job.

Jeff Share, editor of the Pipeline & Gas Journal, said violations like those Enbridge was cited for aren’t uncommon for pipeline companies.

“It is purely a pipeline company. If they’re not operated safely, they don’t make any money,” Share said. “It pays for them from a business and social perspective that their pipelines operate as efficiently and safely as possible.” Past problems for Enbridge at heart of oil spill

May
2008

Alberta’s energy regulator delivered a “high risk enforcement action” against Enbridge for using “The valves, flanges, fittings are not suitable for the applied for maximum operating pressure as defined in Canadian Standards Association.” High risk enforcement action against Enbridge

January
2009

Enbridge Energy, Limited Partnership has agreed to pay $1,100,000 to settle state claims under Wisconsin’s waterway and wetland protection and storm water control laws for 545 environmental violations. Enbridge Energy Settles State Lawsuit Over Environmental Violations For $1,100,000

2009

Enbridge cites that it had 93 reportable spills, six characterized as “significant” According to the Battle Creek Enquirer the government has cited Enbridge 31 times since 2002, including two “corrective action orders” which are the most serious regulatory actions. Enbridge has a history of spills and safety issues

January
2009

A valve blew on a pipe at the Enbridge Cheecham Terminal tank farm, spilling 4,000 barrels of oil near Anzac, Alberta. Enbridge spilling 4,000 barrels of oil near Anzac, Alberta

January
2010

A pipeline built in 1956 leaked 3,000 barrels (126,000 gallons) near Neche, North Dakoka. The PHMSA warned Enbridge twice that older pipelines were susceptible to failure. Enbridge pipeline built in 1956 leaked 3,000 barrels (126,000 gallons)

April
2010

A leak in an Enbridge Oil pipeline has spilled more than 1,500 liters of crude oil into a creek near the town of Virden. The leak was discovered after local residents noticed pools of oil on the surface of Boghill Creek.

July 16
2010

Richard Adam, the vice president of Enbridge, told a congressional hearing on pipeline safety that “Safety and protection of the public and environment are our highest priorities, indeed I think it is a fair reading of our publications and actions that we hold this as a core value — not just a priority.” At the same hearings experts testified that “pipeline corrosion regulations are inadequate.”

July 26
2010

Federal officials now estimate that more than 1 million gallons of oil may have spilled into a major river in southern Michigan, and the governor is sharply criticizing clean-up efforts as “wholly inadequate.” More Than 1 Million Gallons Flowing Down Kalamazoo River, Officials Say

Major causes of oil pipeline leaks

Major causes of pipeline breakdowns. Source: Pipeline and Hazardous Materials Safety Administration

Enbridge does not have the worst record in the oil spill. That distinction belongs to BP, polluter of the Gulf of Mexico. However, The PHMSA has cited Enbridge 58 times for shoddy performance.

Many warning signs before latest Enbridge oil spill on July 2010

The Obama administration said Saturday July 31, 2010, that it repeatedly warned Enbridge Energy Partners about safety issues along its Lakehead oil pipeline system that runs through Michigan, even calling company officials to Washington earlier this year for a meeting on what it deemed “a series of major failures.”

Some of those concerns specifically involved Line 6B running from Griffith, Ind., to Sarnia, Ontario, a section of which apparently ruptured on July 26, sending hundreds of thousands of gallons of crude oil into a tributary of the Kalamazoo River. Read more at Obama Administration: Company knew of issues with Mich. oil pipeline

Prior to the spill, the Detroit Free Press reported on letters sent to Enbridge questioning the discontinuation of corrosion monitoring systems along Line 6B and the results of tests done along the line that found “metal loss anomalies” serious enough that the Canadian company planned to replace section of pipe. A senior Transportation Department official said the administration “repeatedly warned Enbridge in no uncertain terms that it needed to get its act together with regard to the safety of its Lakehead pipeline system.” The official said PHMSA officials met with Enbridge senior leadership in February 2010 to tell them to “overhaul their entire approach to safety.” Read more at www.thestar.com, Enbridge warns by administration about gas and oil pipeline safety

Lawsuits After the recent oil spill

Michigan-based Great Lakes Environmental Law Center plans to sue Enbridge Inc. for leaking oil into clean water. The public interest environmental firm has sent the Calgary company a 60-day notice of intent to file a citizen suit for violating the U.S. federal Clean Water Act, claiming about 3.8-million liters of oil discharged from its ruptured pipeline into the Kalamazoo River near Ballte Creek, Mich., last week (Monday July 28, 2010)

More regulations and new rules

As with the Deepwater Horizon oil spill in the Gulf of Mexico, July 2010 Enbridge oil spill that sent more than 800,000 gallons of oil into the Kalamazoo River has public advocates and policy-makers questioning whether the agency that oversees the industry is too easy on the pipeline owners it regulates.

There are other concerns: The Pipeline and Hazardous Materials Safety Administration, or PHMSA’s head (Cynthia Quarterman, PHMSA administrator) used to work for Enbridge, for instance. (She has been recused from the case.) And many of the standards required under its technical regulations are written by an industry association.

“It appears that it is a very close relationship,” said U.S. Rep. Mark Schauer, D-Battle Creek, who sits on the House committee with authority over PHMSA. “The regulatory agency has given the industry too much authority in overseeing itself.”

The question for the gas and electric industry, on the other hand, is how much regulation is too much?

Read more about more regulations and new rules here: Michigan oil spill has some asking: Are regulations too lax?

Bruce Bullock, director of Maguire Energy Institute at Southern Methodist University’s Cox School of Business, said Enbridge is similar to many other pipeline companies. Noting the age of Michigan’s pipeline, Bullock said that like the rest of the industry, Calgary, Alberta-based Enbridge is dealing with aging infrastructure.

Lewis Reynolds, an economist whose new book “America The Prisoner” details how the U.S. grew so dependent on foreign oil, said oil spills are getting more attention now in the aftermath of the disaster in the Gulf of Mexico.
“They’re clearly frequent, and we know that now,” he said in an interview Tuesday from North Carolina.
“This spill has brought the issue to the forefront once again _ we need cleaner energy supplies because oil is simply not a friendly substance to have in your rivers, streams and oceans.”

Recent Enbridge oil spill clean up

Enbridge has removed 7,000 to 8,000 barrels of oil from the estimated 19,500 barrels that spilled, Steve Wuori, executive vice-president, Enbridge Liquids Pipelines, said today on a conference call with reporters.

Enbridge does not yet have an estimate for the cost of the cleanup but will “make good” on legitimate claims of damage from the spill, Enbridge Chief Executive Officer Patrick Daniel said. “Our objective is to return the river to the same state as it was prior to the incident,” he said. Source www.bloomberg.com Enbridge Says More Than One-Third of Crude in Michigan Spill Is Recovered

Enbridge posts profit despite of oil spill

“They don’t have a reputation of being particularly a star player in terms of their profile or anything like that, but they certainly have a good reputation in terms of delivering for their shareholders,” Bullock said. “They certainly don’t have a bad reputation.”

July 29, 2010 Enbridge Inc. reported a $232-million adjusted second-quarter profit, meeting analysts expectations on new pipeline projects coming online and strong results from its U.S. subsidiary, Enbridge Energy Partners. Read more: Enbridge posts $232M profit

The company announced a cash distribution of $1.0275 per unit, which was an increase of 2.5 percent over previous quarters distribution per unit. Yield: 7.10%. Source www.gurufocus.com, Guru Stocks Raising Dividends: Enbridge Energy Partners

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