An oil pipeline company insists it won’t buy spill cleanup insurance for a Dane County pump station, but it owns a pipeline in Washington state that has purchased hundreds of millions of dollars of such insurance required by local governments.
The chairman of the county zoning committee said the precedent in Washington state gives him only a little more hope that Enbridge Energy will relent and agree to insure against a spill here.
Attorneys from the Calgary-based company told county officials in a private meeting Tuesday that its existing insurance coverage and the cleanup authority of federal and state governments makes local insurance unnecessary, said Patrick Miles, committee chairman.
They also maintain that federal law prevents any local regulation of their pipeline, including any requirement for insurance.
“Their point is that if they agreed to one, the chain effect of many more wanting the same thing would be too much to manage,” Miles said.
To provide protection in the event the company became insolvent or cleanup costs exceeded its resources, county officials are considering making insurance a condition of a permit Enbridge Energy needs for part of a project aimed at tripling the amount of tar sands petroleum running through Wisconsin.
Enbridge wants to increase capacity of its Line 61 to 1.2 million barrels a day by adding horsepower to 12 pumping stations, including one in the town of Medina near Marshall in the northeast part of the county. The line runs from Superior to the Illinois border.
The county Zoning and Land Regulation Committee has twice postponed voting on the permit — and conditions that could be placed on it — as critics have raised questions about the company’s safety record, complaints that the state failed to properly scrutinize the project and concerns about potential environmental damage. The committee will consider the company request again on Dec. 9.
Nation’s largest spill
Enbridge has drawn criticism over a 2010 rupture that fouled 35 miles of the Kalamazoo River in Michigan, the largest pipeline spill in U.S. history with an estimated price tag of $1.21 billion. Last month, the state reopened the final segments of the river to fishing, but dredging was continuing.
But Miles is concerned that any requirement for insurance or environmental study would result in taxpayers dragged into a costly court battle.
“I’m supposed to be looking out for the public, but it’s very frustrating because it seems like my hands are tied,” Miles said.
Miles said the existence of pipeline ordinances in the Washington cities of Bellingham, Redmond and Kirkland may not help the county’s case.
Enbridge told county officials that the ordinances were in place before it bought the Olympic Pipeline company, said county attorney David Gault.
Owned, not operated
An Enbridge spokeswoman earlier this month said the company has never agreed to a local insurance or bonding requirement.
Asked about the Washington municipal ordinances on Wednesday, another spokeswoman said the company owns 85 percent of Olympic Pipeline, but Enbridge is not designated as the operator of the line.
“You’ll need to contact BP (Pipelines) or Olympic Pipeline directly regarding ordinances relating to that pipeline,” said Terri Larson, Enbridge’s U.S. spokeswoman. “We cannot discuss Olympic or any strategies undertaken on that pipeline because we do not operate it.”
The Kirkland ordinance, enacted in 2011, requires the company to purchase $100 million in general liability insurance and $50 million in pollution liability coverage. It is modeled on a Bellingham ordinance that was enacted in 2001, two years after Olympic’s 16-inch gasoline pipeline broke, spilling 237,000 gallons, which ignited, killing three teenagers and causing $45 million in property damage.
Federal pipeline safety law prevents local governments from writing their own safety ordinances, and Enbridge insists that the law also forbids cleanup insurance.
Gault researched the question and said insurance would be permissible, but the county couldn’t be assured of an easy court victory if the company sued.
Enbridge points to federal and state cleanup authority and the company’s own $700 million insurance policy, increased by $50 million after the Kalamazoo River spill.
The burden local regulations would place on interstate commerce outweighs any benefit from local regulation, the company said in a memo provided to county officials.